Alternative investments such as real estate or private equity sometimes require a lot of work from the investor, including paperwork, signatures and bank loans. Cryptocurrencies by contrast offer a direct access without the need for an intermediary like a bank. It doesn’t hurt to tell clients that this is a cheap investment form that doesn’t involve the payment of fees.
It makes sense to concentrate on ICOs, where a token is linked to a real value, the mechanism is transparent and offers enough liquidity.
4. Are Cryptocurrencies Liquid?
One of the most important questions – primarily in alternative investments, where investor asset sometime remain blocked for years. In fact, crypto offerings can create liquidity in investments, which previously didn’t have, for instance in real estate.
The documentation has to accurately describe the mechanism of the token and give the issue of liquidity plenty of room. Is there a so-called lock-up period, during which a certain amount of tokens can’t be traded? Does the trading and emission platform provide enough capacity?
Private bankers and wealth managers would be well advised not to treat cryptocurrencies as a mere trend. It is well worth treating it as any other asset class requiring due attention. That way advisers can give their clients proper support and help them become early investors.
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