Published in: Stock-World
Luxembourg, 25 July 2023 – The crypto winter is coming to an end, and digital asset investments are becoming increasingly popular. “We are experiencing a significant pickup in business”, says Daniel Knoblach, Board Member at Fair Alpha. “Institutional investors are looking for diversification in the crypto space, which can be very well represented, for example, with securitisations of unlisted tokens.” The investment then bears similarities to a private equity or venture capital investment, albeit with a focus on blockchain assets.
Unlisted tokens represent assets that are not publicly traded, akin to investments in start-ups or seed funding. “Investors are leveraging these tools to allocate their funds towards promising blockchain projects that are currently in their early stages of development”, Knoblach points out. “These particular assets are not readily available on conventional cryptocurrency platforms.” In this particular scenario, it is important to note that both the potential returns and risks are significant. “Just like with young companies, there is uncertainty surrounding the development of projects and how a potential exit strategy will be executed”, Knoblach says. “It is imperative for investors to thoroughly evaluate the quality of asset managers in this context.”
Allocating investments towards unlisted tokens also allows for the strategic diversification of a cryptocurrency portfolio, thereby potentially mitigating overall risks. “Combining unlisted tokens with listed tokens and with conventional investments has the potential to significantly enhance the risk profile,” Knoblach explains.
From a financial perspective, it is important to note that there are various investment opportunities available. These opportunities span across different themes such as DeFi, DAOs, NFTs, gaming, social platforms, and eSports. Additionally, traditional cryptocurrencies, undervalued tokens, and staking also present potential avenues for investment. “Decentralised Finance (DeFi) is a rapidly growing sector within the financial industry that is transforming conventional financial services by leveraging the power of blockchain technology and smart contracts”, Knoblach says. Decentralised Autonomous Organisations, commonly known as DAOs, are innovative entities that operate through the utilisation of smart contracts and blockchain technology. “NFTs, Non-Fungible Tokens, present an enticing opportunity to engage in investment ventures pertaining to digital artwork, music, virtual real estate, and various other domains”, Knoblach adds. “Despite the recent market downturn, it is worth noting that there is a notable influx of promising new projects currently emerging in this domain.”
The gaming and eSports ecosystem is also experiencing a steady growth trajectory, presenting potential investment opportunities. “The realm of new game development and e-sports teams, along with the potential of in-game assets and virtual currencies, presents a plethora of promising prospects”, says Knoblach.
When engaging in crypto investing, it is imperative to exercise prudence in selecting an asset manager who possesses the expertise to identify favourable trends. Furthermore, one must not overlook the paramount importance of prioritising security measures to safeguard their investments. “Fundamentally, it is important to understand that unlisted tokens are an integral component of the blockchain economy and possess a certain level of inherent security owing to their decentralised nature”, Knoblach highlights. Utilising blockchain technology further facilitates the establishment of a robust and transparent system for safeguarding and managing tokens in a secure manner. It is highly recommended to securely store the unlisted tokens in a digital safe equipped with a multi-signature function. “It is crucial to prioritise high security standards and leverage modern encryption technologies in order to effectively safeguard your digital assets”, says Knoblach. Optimal implementation of strategies can be achieved through the use of Luxembourg securitisations. These securitisations offer the advantage of swift market action, which is especially crucial when dealing with digital assets.