2024 US Election: Wealth Managers, Don't Miss the Crypto Boat

The 2024 US Election has brought crypto to the forefront, with Donald Trump's victory signaling a potential shift in policy. Post-election, we can expect changes in crypto-related legislation, such as limiting the reach of the Securities and Exchange Commission (SEC), creating a 'strategic bitcoin reserve,' and protecting self-custody rights. Wealth managers must adapt their crypto asset offerings to capitalize on these changes.

Crypto has surged following Trump's win, with many believing his win will have a significant impact on the industry. The crypto market surged, with Polymarket, the leader in prediction markets, securing 80% of the volume from wagers on the presidential election. Decentralized finance (DeFi) also has the potential to enter the mainstream financial market due to favorable changes in the external environment.

To attract tech-savvy investors, wealth managers should integrate DeFi platforms into their crypto offerings. DeFi platforms offer innovative financial services like lending, borrowing, and trading, which can be appealing to tech-savvy investors seeking exposure to the crypto market. By partnering with DeFi platforms, wealth managers can provide clients with access to these services while mitigating risks through due diligence and proper vetting.

Wealth managers must navigate the volatile crypto landscape by balancing risk and reward between smaller-cap, high-growth crypto assets and established, blue-chip cryptocurrencies. Smaller-cap assets offer potentially higher returns but come with increased risk, while blue-chips provide stability but may have lower growth potential. To manage this, wealth managers can diversify their crypto portfolios, allocating a portion to smaller-cap assets for higher expected returns and the remainder to blue-chips for stability. Additionally, they can employ hedging strategies, such as purchasing put options on smaller-cap assets to mitigate downside risk. Regularly reviewing and rebalancing the portfolio is crucial to maintain the desired risk-reward balance.

As crypto becomes more mainstream, wealth managers should expand their offerings to include crypto-focused funds, digital asset management services, and educational resources for clients. Additionally, they should consider partnering with crypto-native firms to leverage their expertise and gain a competitive edge in the rapidly evolving crypto landscape.

In conclusion, the 2024 US Election has brought crypto to the forefront, with potential regulatory changes likely to impact wealth managers' offerings. To capitalize on these changes, wealth managers must adapt their crypto asset offerings, integrating DeFi platforms, balancing risk and reward, and expanding their services. By doing so, wealth managers can attract tech-savvy investors and generate additional revenue streams in the rapidly evolving crypto landscape.