Wednesday, September 28

Volatility pays off: our basket of cryptocurrencies accumulates a 168% annual return

– What is the value of having cryptocurrencies in our portfolio?

The value is clearly its uncorrelation on traditional assets and profitability. Having a conservative or even aggressive portfolio in traditional assets and having a share in crypto assets de-correlates us from the results of those traditional assets. Because of the profitability they have, it is worth being inside with a part of your assets, it adds value like a house, investment funds or stocks do. Crypto assets are here to stay and we believe they have to have all investors.

– Without having great knowledge … what is the best approach to cryptocurrencies?

According to our vision, the most convenient in the first stages, as we are also, would be passive management. Keep in mind that there are more than 4,200 crypto assets and we cannot know about all of them or be pending. At Pecunia 256 we replicate the profitability of the assets with the highest capitalization, which have greater market strength, because if you buy the 68th cryptocurrency with the highest capitalization you can be right or wrong, but instead if you are positioned in the ten most capitalized cryptocurrencies you are sure to be right. It is very difficult to always hit the cryptocurrencies that are profitable the most through active management, while with passive management and a positioning in these large cryptocurrencies we are sure to be right. It is even more difficult to invest with active management in cryptocurrencies than in traditional assets. Passive management allows the investor to relax, it allows not to be on top of the investment continuously and to be carried away by a market that is giving us great joys and great scares, but also great joys.

– Volatility is very important, are they suitable for all investment profiles?

Cryptocurrencies or crypto assets are not suitable for all investment profiles, they have a higher volatility than traditional riskier assets, around 25% per month in the cryptocurrencies that we have in our baskets, which would be the normal volatility of a traditional asset in a year. Volatility has its rewards, we have been in the top 3 this year, which would be the quietest and the one with the least volatility, with 168%. That is, if you had invested 10,000 euros, you would end the year with 27,000 euros. These are figures that make you rethink whether or not you want volatility, and because of this volatility we never advise our users to invest all their assets in crypto assets. It depends on the aversion to risk that you have, you have to invest more or less and in fact in Pecuna 256 you can invest from 1,000 euros, but you have to know that there is volatility and you cannot leave immediately that there are falls because you would be losing the opportunity of the rises that occur as fast as falls. We always tell our users to be prepared for strong emotions in both performance variability and profitability. You have to know that you are getting into something with high volatility but that is worth it in the long term.

– What percentage of cryptocurrencies do you advise to have in your portfolio?

This is a bit in line with what we have said with volatility and it already depends a bit on your stomach. What percentage of your portfolio is advised to have in high-risk Chinese or Indian funds? That depends on the stomach of each investor, we recommend having a small percentage to all investors because it compensates the long-term profitability. The percentage on the equity has to be decided by each user and volatility must be taken into account, because a large percentage implies a great variability of the equity and knowing that you are getting into an aggressive asset.

– How do you see the cryptocurrency environment for 2022?

Looking ahead to 2022 and 2023 and in the long term, we are positive. In December we have had some bad days and it seems that the trend is of change, although there are bad days that are attributable to the volatility of the asset itself. In 2022 we believe that there will be greater news of acceptance of assets than those that have occurred in 2021, something that would give strength to the market and the type of asset. We recently learned that Germany in its savings banks was going to allow wallets, so that its clients operate in cryptocurrencies and this in the end is very good news. Savings banks manage close to a trillion euros and the number of clients is exorbitant, it is not only that Germany is producing it but that it is one of the most important economies in the world and in this sense it is where they are going to go all economies. More and more we see that there are many mutual funds that invest in or are denominated in cryptocurrencies. This provides us all with greater solidity and gives us a sample of the importance of this type of asset and as these news are given throughout 2022, which will occur we are convinced, prices will tend to rise and active will be more important. We must be after the prices that the last fall has left us and wait for this to become more and more solid than it will be. We will hear more and more about crypto assets.

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