Altcoins Are Coming To Wall Street

To investors,

Franklin Templeton is considering a big push into the altcoin market. This is the latest development for large financial institutions based on reporting from Yueqi Yang at The Information.

This fund would be targeted at institutional capital with a focus on crypto exposure outside of bitcoin and ether. While that may sound like a high-risk strategy, it actually is a natural progression for an asset manager.

Investors are looking for returns. They want to risk capital and watch their money grow into more money. This is the essence of investing.

Capital allocators have a lot of options of where to put their money. Stocks. Bonds. Currencies. Real estate. Commodities. Crypto. The list goes on and on.

But crypto appears to provide more risk than most asset classes, which in turn means that a higher potential return is present. You get paid for the risk you take. At least that is the way a market should work.

Now here is the part that may seem counterintuitive — Wall Street loves risk.

Many people believe the suits are risk-adverse. They aren’t smart. Wall Street doesn’t know what is going on. But that is wrong.

Wall Street has created the greatest casino in history. Every day trillions of dollars are wagered in the market based on risk-reward. The more risk that is present, the more someone on Wall Street will seek out the opportunity.

Just look at zero-day options. They now make up more than 50% of all option trading.

Bet what you think will happen to the market by the end of the day. This is akin to gambling.

This brings me to the altcoin market.

Some of the assets will have long-term value. Many of them won’t. It doesn’t really matter though. Investors on Wall Street are no different than the crypto degens.

They all want to find risk and volatility. The long-term value of an asset is much less important compared to the short-term opportunity.

This approach violates everything you have learned about traditional investing principles. Yet this is the current state of financial markets. Wall Street investors are going to flock to the altcoin market the same way they have flocked to zero-day options.

If an asset moves, Wall Street will be there. If an asset moves a lot, Wall Street will be there with size.

Franklin Templeton understands this. They wouldn’t be contemplating this fund unless they felt there was significant demand for the strategy.

Right now the fund would be a private fund. Eventually we will see public funds that give altcoin exposure inside the United States. You may not like it. You may disagree with the investment case for buying these assets. But the market is the referee and it is telling you that altcoins are coming to Wall Street.

Hope you have a great end to your week. I’ll talk to everyone on Monday.

-Anthony Pompliano

Matthew Sigel is the Head of Digital Assets Research and Portfolio Manager at VanEck.

In this conversation, we talk about bitcoin, ethereum, miners, global adoption, regulation, conversations VanEck is having with their clients, where opportunities exist, and how crypto and politics are intersecting with each other.

Listen on iTunes: Click here

Listen on Spotify: Click here

VanEck’s Matthew Sigel Explains What The $100 Billion Asset Manager Is Doing In Crypto

Podcast Sponsors

* Meanwhile is the world’s first licensed and regulated life insurance company built for the Bitcoin economy. 

* iTrustCapital allows you to buy and sell cryptocurrency in a tax-advantaged crypto IRA. Open and fund an account today to receive a $100 USD funding bonus.

* Supra - Join Supra’s early integration program for zero-cost access to the fastest oracles and dVRF across 50+ blockchains.

* BetOnline -  Use crypto to bet on sports, casino games, horse racing, poker and more with promo code POMP100.

* Espresso Displays - The world's thinnest touchscreen portable monitor. Expand your workspace and work from anywhere.

* CrossFi is the Apple Pay for Crypto. For the first time in history, anyone with a web 3 wallet can spend crypto through a physical or virtual Visa card where Visa is accepted.

* ResiClub - Your data-driven gateway to the US housing market.

* Opening Bell Daily - Get the 5-minute newsletter that Wall Street reads.

You are receiving The Pomp Letter because you either signed up or you attended one of the events that I spoke at. Feel free to unsubscribe if you aren’t finding this valuable. Nothing in this email is intended to serve as financial advice. Do your own research.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit pomp.substack.com/subscribe