The Weekly (1/12)

Titan launched the first actively-managed Crypto strategy for individual investors in US history back in 2021, which we then evolved to a passive Crypto strategy, owning Bitcoin & Ethereum. 

The major news this week was the SEC's historic approval of spot Bitcoin ETFs. What does that mean exactly? Simply put, the SEC voted to allow mainstream investors the opportunity to buy and sell bitcoin as easily as stocks and mutual funds.

Given the SEC is nearly 90 years old and has the explicitly stated mission of “protecting investors,” this approval could be read as a vote of confidence for the asset class’ development.

We were taken aback by the degree of introspection & honesty from the SEC. Check this out:

"[W]e have alienated a generation of product innovators within our space. Our unreasonable approach to these applications has signaled that regulatory prejudice against new products and services can lead us to sidestep the law and unreasonably delay product launches" annotated Hester Pierce, Commissioner of the SEC (full press release).

Crypto is a hotly debated subject, especially in wealth management. 

Quick Googling, and you'll find significant US leaders who are either passionate advocates or passionate skeptics. The way you can summarize the Titan house view is the following: 

The right question to be asking with Crypto is not the binary one: will Crypto exist or not? Given all investing is inherently risk and reward, the more precise question is, what percentage of long-term portfolios should be dedicated towards crypto? 

If you don’t believe in the technology and see it as a commodity with no intrinsic value, the answer is 0%. If you believe in the vision of Chris Dixon’s Read, Write, Own and web3, the answer should be greater than 0%, but still sized commensurate with the high risk and high volatility of the nascent asset class compared to, say stocks.

So while Crypto isn't in our recommendation engine, as we believe this is a personal decision for our clients, we launched Titan Crypto to support our clients in having a simple means to add Crypto exposure to their portfolios if they so choose. 

“Although this is a time for reflection, it is also a time for celebration…I am celebrating the perseverance of market participants in trying to bring to market a product they think investors want.” We agree, Ms. Pierce. 

You can learn more about Titan Crypto here if it's of interest or find it in the app on the Transfer tab. 

Have a great weekend,

— Your Titan Team

As of writing, BTC and ETH are holdings in Titan Crypto.

Disclosure: The views expressed by Commissioner Hester Pierce are her own and do not necessarily represent the official position of the U.S. Securities and Exchange Commission as a whole. Nothing in this content should be construed as investment advice, or a recommendation to buy or sell cryptocurrency.  

Cryptocurrency advisory services are provided by Titan. Cryptocurrency trading is provided by Bakkt Crypto Solutions, LLC ("Bakkt Crypto"). Bakkt Crypto is not a registered broker-dealer or a member of SIPC or FINRA. Cryptocurrencies are not securities and are not FDIC or SIPC insured. Bakkt Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. Cryptocurrency execution services are provided by Bakkt Crypto (NMLS ID 1828849) through a software licensing agreement between Bakkt Crypto and Titan. Please ensure that you fully understand the risks involved before trading: https://bakkt.com/disclosures.

Cryptocurrency exchanges, as well as other intermediaries, custodians and vendors used to facilitate cryptocurrency transactions, are relatively new and largely unregulated in both the United States and many foreign jurisdictions. In addition to a higher level of operational risk than regulated futures or securities exchanges, cryptocurrency exchanges can experience volatile market movements, flash crashes, fraud, various forms of market manipulation, theft, transaction processing delays and other cybersecurity risks. Trading in cryptocurrencies may be halted by the various trading venues due to unusual trading activity, outages or other problems with a cryptocurrency platform. If Bakkt Crypto experiences such technical difficulties, those difficulties could prevent you from accessing the cryptocurrency in your Bakkt Crypto account. Bakkt Crypto and Titan may not have sufficient financial coverage through bonds, insurance or other products to repay your losses. Bakkt Crypto does not offer staking, so by using Bakkt Crypto for execution services, Titan Clients may be foregoing the ability to earn additional cryptocurrency.

PLEASE NOTE: INVESTMENTS IN CRYPTO ASSETS ARE ONLY SUITABLE FOR INVESTORS WHO ARE WILLING TO BEAR THE RISK OF LOSS AND EXPERIENCE SHARP DRAWDOWNS. INVESTMENTS IN CRYPTO ASSETS ARE NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (“FDIC”) OR ANY OTHER GOVERNMENTAL AGENCY. YOU ARE SOLELY RESPONSIBLE FOR EVALUATING THE MERITS AND RISKS ASSOCIATED WITH THE USE OF ANY INFORMATION, MATERIALS, CONTENT, USER CONTENT, OR THIRD PARTY CONTENT PROVIDED BEFORE MAKING ANY DECISIONS BASED ON SUCH CONTENT.