Friday, Jul 30th 2021

Let's debunk some crypto myths


*MYTH: There will only be one winner in crypto: Bitcoin.*

DEBUNKED: Until fairly recently, crypto was largely a store of value--akin to digital gold. It’s true that Bitcoin was the first store of value crypto; based on our research, we consider it to still be one of the best. But today there are also cryptos offering true utility. Smart contract platforms like Ethereum offer an extraordinary number of applications and real-world use cases, and have brought on an unprecedented level of software development and innovation into the space. As a result, Bitcoin’s dominance in the crypto market, in terms of market capitalization, has gradually declined to today’s ~48%, nearly the lowest it has ever been.

*MYTH: Investing in crypto isn’t “true” stock-picking: it’s always a gamble, like playing at a casino.*

DEBUNKED: Gambling implies that the only driver to a successful crypto investment outcome is chance. As with any other asset class, active investment managers can generate alpha for their clients. At Titan, we believe this is especially true for actively-managed crypto investments. There are thousands of cryptos that exist today, many of which have no real values or are outright scams. The average investor only knows the biggest coin names or memes. At Titan, we apply a research-intensive, fundamental framework to identify mispriced and idiosyncratic opportunities across the crypto ecosystem. Our proprietary diligence framework helps us identify what we consider to be gems, with long-term fundamental value, at attractive valuations.

*MYTH: With cryptos up +1000% in the last three years, it’s already too late to win. Anyone not yet invested in crypto has missed the boat.*

DEBUNKED: There are many signs suggesting that those who invest in crypto today are still “getting in” near the beginning. Crypto and its underlying blockchain technology still face a great deal of skepticism and disillusionment from the public at large: typical of any technology that is very early in its life cycle. It’s not a question of whether or not the underlying technology works: it absolutely does.

But for a huge portion of the public, the existing infrastructure (and information share) around crypto investing is still too complicated and confusing to get started. Regulators are still debating how to regulate the space, and major financial institutions are only entering the space today, in 2021, as they finally begin to accept crypto’s legitimacy. Crypto products and services to support institutional clients are still not yet mature. Bitcoin and Ethereum ETFs are not even available in the U.S. yet. In other words: it’s still early innings, and it’s certainly not too late to get invested with an eye towards significant long-term growth in crypto.

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