“Blockchain and digital assets are new asset classes with the potential to transform commerce on a global scale,” Ric Edelman, founder of the RIA Digital Assets Council, said upon release of the council’s predictions for 2021.
RIADAC is an education source for financial advisors. It produces live and online events, webinars and content to boost their knowledge of blockchain and digital assets.
During the first quarter, RIADAC will offer a program that allows advisors to earn continuing education credits by attaining RIADAC’s Certification in Blockchain and Digital Assets.
Here are some of the group’s predictions for digital assets for 2021.
- Prices for digital assets will end the year higher than they began — notwithstanding possibly extreme volatility — fueled by increased institutional adoption and the snowball effect of individual investors.
- Bitcoin’s share of market will rise, as lots of Layer 1 coins will disappear. Even so, Bitcoin will not be the best-performing digital asset.
- For the financial advisors and their firms and asset managers, reputational risk will shift from “why did you invest in that?” to “why didn’t you invest in that?”
- Bitcoin is here to stay. Federal acquiescence to (if not outright approval of) digital assets will continue; the more regulation, the more legitimate digital assets become, fostering greater adoption. And as the number of investors and the amount of capital invested increase, the harder it will be for the federal government to outlaw it.
- At least one centralized company will roll out a decentralized, user-owned/operated crypto-network that will have legitimate checks and balances over the company’s actions.
- Top talent from law, engineering and financial services will leave their positions for the blockchain and digital asset space.
- The Securities and Exchange Commission will approve a Bitcoin ETF, causing the GBTC, ETHE and BITW premiums to evaporate. The first Bitcoin ETF deposits will exceed $5 billion within two weeks of debut. Dozens more filings will follow, spurring a new exponential growth curve for the price of Bitcoin and other digital assets, likely followed by another crash.
- Frauds and scams will increase commensurate with the price of Bitcoin.
- Tokenization will skyrocket. Assets of all types — from tangibles (real estate and collectibles) to intangibles (recording artist royalties and athletic and artistic performance contracts) — will gain huge traction.
- Global regulators will slow, probably stall, deployment of Diem (the digital currency project spearheaded by facebook, formerly called Libra) and Novi (the digital wallet for that currency) and possibly stop it altogether.
- The Biden administration will be very friendly to digital assets and blockchain, ushering in a new wave of investment in this space — not merely purchases of Bitcoin itself.
- As more investment funds come onto the market, prices will fall. Before long, though probably not in 2021, prices will be comparable to today’s ETFs. Investors, meanwhile, will continue to tolerate higher fees as the price of admission to the digital asset world.
Check out the council’s website for the full list of predictions.
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