A bright future for digital assets
Copper.co: Best Digital Assets Service Provider — The past year has seen digital assets join the mainstream investment world, as investors began to view crypto assets not merely as a short-term fad, but instead as a long-term, sustainable asset class.
Major institutional asset managers including BlackRock, Ruffer, Tudor Investment Corporation, and One River have entered the bitcoin market over the past twelve months.
Asen Kostadinov (pictured), head of strategy at Copper.co, says that navigating this young and fast-developing asset class can still throw up challenges for investors.
“It is going to take time for crypto to truly solidify its status as an alternative asset class given the prevalence of complexities and risks beyond ‘volatile prices’. And investors require unique support in order to navigate this nascent but significant ecosystem,” comments Kostadinov.
Copper.co is bridging the gap for hesitant sophisticated traders that wish to leap into the digital asset space securely. Kostadinov is encouraged by higher levels of awareness shown by today’s investors around technological developments in digital assets:
“Institutional investors today are considerably more familiar and better educated about the opportunities, risks, and different security practices surrounding digital assets. And, as cryptocurrency awareness has grown, so have security and operations standards – with crypto firms relentlessly pursuing trustworthiness.”
Rising institutional interest has driven Copper.co to advance its private key management. Last year, the firm adopted a new, more robust cryptographic key management technology called multi-party computation (MPC) which consists of encrypted key shards that are never reconstructed.
“Some particularly tech-savvy managers we’ve been speaking to recognise that boasts of MPC tech by a handful of custodians out there are hugely misleading,” says Kostadinov. “Importantly, and differentiated from our competitors, Copper’s MPC offering uses sharding in such a way as to never keep a record of the shards belonging to the client and the trusted third party.”
Another trend in the past year has been greater institutional demand for a wider spectrum of digital assets. While bitcoin remains the premier crypto-asset of choice, investors are increasingly embracing broader set of assets, including the emerging ecosystem of DeFi.
“Though the dollars tied up in DeFi are modest compared to the trillions of dollars in traditional finance, institutional investors have identified the emerging sector as a top opportunity for growth,” says Kostadinov.
In light of demand, Copper.co launched CopperConnect, the first ever dedicated DeFi tool for crypto institutions.
Copper.co expects to keep developing its technology platform in second half of the year, thanks to a recent USD50 million Series B fund-raise. The firm is looking to cement its position as the “most secure and effective gateway” for institutions entering the digital assets market.
A crucial challenge and opportunity for the digital assets market in the coming year will be the developing regulatory outlook. “The crypto market is still in the first inning of institutional adoption, and I think that a mature level of demand will only be achieved once regulatory clarity on things like tax and investor protection have been properly addressed,” says Kostadinov.
“In today’s increasingly digital world – and with the core supporting infrastructure of digital assets now in place – now is certainly the time for global policy makers to bring cryptoassets inside of the regulatory perimeter.”
Adoption could be boosted in the coming year by EU Commission’s proposed regulation of crypto assets.
Furthermore, banks including Goldman Sachs, Morgan Stanley, and DBS Bank are starting to provide crypto investment options as part of their wealth management offerings.
“As they say, ‘Where banks go, regulation follows’. With this in mind, it does seem that the stage is set for a bright future,” says Kostadinov.
Asen Kostadinov, Head of Strategy, Copper.co
Prior to joining Copper as Heady of Strategy, Asen Kostadinov headed the Research for London based Venture firm, MMC, along with their Blockchain and Crypto focused initiatives. He is still an advisor and venture partner at MMC. Asen began his financial career at Barclays Investment Bank, where he spent four years as an equity research analyst focused on European media, internet and video gaming companies. Asen is a Chartered Financial Analyst (CFA) charter-holder, and also holds a First Class Honours degree in BEng Aeronautics and Astronautics Engineering. After graduating university he worked as an aerospace engineer at Airbus’ Flight Physics division.