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For Maurice Mureau, CEO of crypto investment fund operator Hodl, there's “not a lot left” to invest in anymore. With soaring inflation, bonds are no go, real estate is getting more difficult, but there is one asset class that's (unsurprisingly) catching the fund manager's attention – cryptocurrencies. During the European Blockchain Convention in Barcelona this week, Cointelegraph Editor Aaron Wood sat down with Mureau, who gave his insight on the outlook of the digital assets investment landscape.
“It's just like the end of the 90s with the internet bubble, so you're still early in the space,” said Mureau. “A very solid use case for crypto is becoming apparent in the gaming industry, where people invest time that you can earn from it, and that's all arranged by the blockchain.” He reiterated that there would be only 21 million Bitcoin in existence with no more printing. Therefore, alluding to hyperinflation in Turkey and Argentina, Mureau said that central banks can't print more of the digital currency. “So that, for me, makes for a very safe hedge. 30% Volatility in asset prices can be bad, but not if you lose 70% on your local currency's purchasing power each year.”
When asked about his advice to new crypto investors, Mureau explained for institutional investors, who are typically risk-averse about protecting their capital, that anywhere between 1% to 5% would be an ideal exposure target. However, he suggested that retail investors, especially those who are young, can easily go beyond that target as there will be ample future income to supplement the portfolio. Currently, digital assets represent as little as 0.12% of all financial assets outstanding. “So if it goes from 2% to 4%, which is more than 10x from now, that means you've got a bit of a mature model. If you times the original number by 12, you're at the level of gold.”
Of course, institutional investors typically have access to much more in-depth sources of information. But when asked about what retail investors can do to hone in their research, Mureau said:
“First, on-chain analysis is very important, because you can see who actually owns the coins. Suppose you see that 90% of the coins are owned by three individuals who are tied to the project, then you know it's a bit scammy.”
He went on: “There are also loads of companies like ours, where they just write reports and put them on the website. Other elements Mureau recommended investors research are use cases, such as staking opportunity, social media presence, and inquiring about its community. “This might be a challenge, but it's similar to the internet's early days. Ultimately, the market will shake out those without meaningful traction and are just using crypto as a bandwagon.”