Cryptoassets as investment engines 2024 may be a promising year for digital assets.
As the world continues to embrace multipolarity, moving from a model largely dominated by the United States to the prominence of China and countries such as India, Saudi Arabia, South Africa and Singapore, which are challenging this dynamic and heading towards a new world order; Geopolitical changes, the severity of the recession and inflation are elements that feed back into the macroeconomic future.
In recent years we have been seeing “the rise of private market assets.” Globally, private capital presents a record of 3.7 trillion dollars of dry powder , that is, the amount of capital committed, but not assigned, and ready to invest. After a decade of growth in private capital fundraising – with almost twelve billion dollars raised since 2012 – fundraising has been a challenge in 2023.
At the national level, according to SpainCap, fundraising among private national investors reached €1,343M, 22% more than in the first six months of 2022, which was the best first semester in history. Some common examples of private market assets include Venture Capital, Private Equity, Private Real Estate Funds, investments in Private Debt, Startups and Technology Companies, etc. It must be taken into account that investments in private markets are often less liquid than in public markets and require specialized knowledge and a deep understanding of the market and the companies in which they invest.
According to Rafael Suárez, Director of Investments at Wealth Solutions, “it is important that investors not only focus on profitability expectations, but also value the costs that these products bear, which are usually high, and the long holding time of the assets.” these investments, which practically captive investors for ten or more years while they pay annual commissions.” Likewise, he explains that it is advisable to analyze the risks (claims, complexity, operational, illiquidity, concentration, etc.).
In this environment, cryptoassets can generate a greater boost to Venture Capital and Venture Builder and/or transform the way in which startups and investments in emerging companies are financed and managed with advantages such as more accessible and global financing, facilitating liquidity, the tokenization of assets and greater flexibility in investment.
Luis Pastor, co-founder and CEO of Tritemius, explains that “transforming industries by taking advantage of trends such as the growing institutional adoption of blockchain technology , the development of digital identity, the growing prominence of digital assets, the advantages of Smart Contracts and finance decentralized, beyond investment trends, they are drawing a new world economic scenario.”
Without a doubt, the regulatory framework will generate new entrepreneurship formulas around digital assets. The approval of MiCA marks the protection of consumers and investors of Bitcoin and crypto assets, and overlays the focus on avoiding stablecoin disasters. “In the future, they could play a more prominent role in global trade and financial inclusion,” predicts Alberto Fernández, CEO of Sistek Solutions.
Technology and the WealthTech ecosystem are drivers that play a key role in the investment of the winners of the future and will mark the reconfiguration of the financial landscape.
