Welcome to this week’s edition of Crypto for Advisors! We’re diving into the world of digital assets to clear up some confusion and offer expert insights. First up, Christopher Jensen from Franklin Templeton is here to help us make sense of crypto investing, debunking common myths in his article.

Then, in our “Ask an Expert” segment, Pablo Larguia of SenseiNode is tackling your questions about staking rewards.

Myth Busting: 3 Crypto Misconceptions Investors Still Have

Even though cryptocurrencies have been around for over ten years, they’re still a bit of a mystery to many in the investment world. So, let’s clear the air! In this article, we’re tackling some of the biggest crypto myths to help you better understand both the potential opportunities and the risks involved.

Myth #1: “Crypto investing is just too complicated.”

Let’s face it, the idea of digital wallets, private keys, and navigating crypto exchanges can seem daunting, leading many traditional investors to think crypto is beyond their reach. But things are changing! The arrival of crypto exchange-traded products (ETPs) in 2024 has opened up a simpler way for investors to get into digital assets using familiar investment tools.

Thanks to crypto ETPs, investing in digital assets like bitcoin is now as straightforward as buying stock shares. You can purchase bitcoin and ether ETPs through your regular brokerage accounts, just like any other security. This means you can skip the hassle of setting up and managing crypto wallets on an exchange, making crypto accessible to a much wider audience. Plus, these ETPs are regulated financial products, adding an extra layer of security. While the old crypto saying, “Not your keys, not your crypto,” still rings true for some, the popularity of crypto ETPs shows that holding your own keys isn’t the only path to crypto exposure.

Myth #2: “Bitcoin’s had its run – I’ve missed the boat.”

Bitcoin has definitely seen some impressive price jumps, but thinking it’s “too late” to invest is a misunderstanding of where we are in the bigger picture. Bitcoin is actually still in the early stages of becoming a mainstream and institutional asset, with a lot of growth potential ahead.

Currently, bitcoin’s market cap is around $1.7 trillion, which is less than 9% of gold’s massive ~$19.4 trillion market, and even smaller compared to the stock, bond, and real estate markets. If bitcoin continues to gain traction as a store of value, a way to pay, or a reserve asset, its market cap could expand significantly.

Bitcoin also has a built-in scarcity – its supply is capped at 21 million coins. A whopping 94% of all BTC has already been mined, and it’s estimated that as much as 20% might be lost forever. At the same time, the rate at which new bitcoins are created – known as “block rewards” – gets cut in half roughly every four years. This means the new supply is constantly shrinking while demand, especially from big institutional investors, is on the rise.

The launch of bitcoin ETPs just over a year ago has been a game-changer, breaking records with over $35 billion flowing in – the fastest ETP launch ever. These products give both institutions and everyday investors a regulated and easy way to access bitcoin, really speeding up mainstream adoption.

Another big factor is the recent shift in presidential administrations in the U.S., bringing a much more positive outlook on digital assets. Policies that used to slow things down are being reconsidered, paving the way for more institutions to get involved. Just recently, on March 2nd, the administration announced plans to create a crypto strategic reserve including five major coins: bitcoin (BTC), ether (ETH), Ripple (XRP), Solana (SOL), and Cardano (ADA). And it’s not just federal – 18 U.S. states are actively looking into adopting Bitcoin reserves, with a total of 33 states considering legislation to establish their own. This really highlights bitcoin’s growing acceptance as a legitimate financial asset.

Adding to this momentum, the recent repeal of SAB 121 is removing a key regulatory barrier to crypto adoption. This makes it easier for banks to hold bitcoin and other digital assets, potentially unleashing significant institutional demand and further integrating bitcoin into the traditional financial system.

Bitcoin is still in the early innings. Its relatively small market compared to traditional assets, limited supply, growing institutional interest, and evolving regulations all suggest that the investment opportunity is far from over. While past gains don’t guarantee future results, saying bitcoin’s best days are behind it ignores the powerful macroeconomic and institutional trends currently at play.

Want to dive deeper? You can read the full article on Franklin Templeton’s website here.

Remember, all investments come with risks, and you could lose money.

Investing in blockchain and cryptocurrencies involves specific risks. These include the challenges of developing and profiting from digital asset applications, the dangers of theft or loss of crypto keys, the uncertainty of digital asset technologies fully taking off, cybersecurity threats, intellectual property disputes, and constantly changing regulations. Trading cryptocurrencies like bitcoin can be highly speculative and volatile, meaning you could lose your entire investment. Blockchain is still a relatively new technology and might not develop to the point where it provides significant benefits. If a cryptocurrency is classified as a security, it could be in violation of federal securities laws. Also, the market for buying and selling cryptocurrencies might be limited or even non-existent.