Cryptocurrencies will undergo a major correction in the future, but not before experiencing another boom, according to MC Vermögensmanagement (MCVM) managing director Manuel Bolkart.
The Liechtenstein-based firm recently launched a crypto-focused fund, which Bolkart claimed is the first such fund in Europe with daily pricing, allowing for increased liquidity.
While many investors are not yet diving into crypto, Bolkart said that now is the time to act on the controversial asset.
‘Many people know about cryptocurrency and many people read about it, but very few people actually invest in it. The value of cryptoassets have increased significantly thanks to the development of underlying protocols over the past few months, but prices have been going down.
'We think the market will follow the value increases, and that we'll see a big boom in the coming months.'
Bolkart said his team tries to maintain ‘conservative access to a speculative market’, mitigating cryptocurrencies’ risks by investing in longer-standing companies and ensuring the fund is only geared towards professional investors.
‘We invest in the main five to 10 cryptocurrencies that have been on the market for a longer time and that have shown they have a clear use case and can run a stable network.
'We think this is a good side investment, making up maybe between 1% and 5% of the entire investment strategy, but of course it's very speculative.’
The firm has been located in Liechtenstein since 2015 and has a geographical advantage when it comes to cryptocurrencies. Strict regulations make it a challenge for other wealth managers in Europe and Switzerland to follow suit, Bolkart explained.
However, he also noted that increasing EU regulation has been a challenge for his four-person team to keep up with.
‘It takes a lot of manpower to invest in regulation, which could be spent acquiring new marketing campaigns. Compliance is very expensive, and we have seen costs go up quite high in 2017 and 2018.’
Bolkart also said that market volatility initially caused MCVM’s largest multi-asset fund to take a hit in March, but that it has since recovered.