Exclusive: Cryptoassets Already Being Used As 'Hedging Tool', eToro's Senior Analyst Says

Exclusive: Cryptoassets Already Being Used As 'Hedging Tool', eToro's Senior Analyst Says
Omar Faridi

Mati Greenspan, the senior market analyst at giant social trading platform, eToro, recently shared with CryptoGlobe some of his views and insights regarding cryptocurrencies and how he thinks they will contribute to the global economy.

Investment In Cryptoassets Is "Very Much A Factor Of A Broad Generational Trend"

Greenspan, a portfolio manager at eToro for VIP clients “with a minimum equity of $1 million”, first explained how he expects each age group from teenagers, millennials, middle-aged professionals, and senior citizens will interact with digital assets and other types of (traditional) assets. He noted:

As with many earlier markets, investment in cryptoassets is very much a factor of a broad generational trend. The Baby Boomer generation, for example, had a high level of trust in the government and so they preferred to invest in treasury bonds. Generation X believed in capitalism and corporations, so they invested primarily in stocks. The millennial generation very much believes in technology and the power of social networks, which is what makes digital assets an excellent fit for this generation.

When questioned about whether he thinks it is absolutely necessary that a cryptocurrency platform be decentralized, and if centralized digital currencies offer some of the same benefits (such as Central Bank Digital Currencies), Greenspan said: 

The innovation of the blockchain is simply a way to transfer value from one person to another across the internet without the need of a middleman. The original use case of this of course is bitcoin and many new and exciting projects are now being built which will take the concept of decentralization to new levels that we can't even imagine yet.

eToro To Explore Use Cases For DApps

In response to a question about bitcoin’s (BTC) potential to evolve into a legitimate asset class, Greenspan remarked:

[Bitcoin (BTC) is] already [a legitimate asset class]. The cryptoasset class is already in play and being utilized by investors around the world. Going forward, I believe the industry will grow in popularity and adoption. In the eToro platform, we're already seeing users who are diversifying their accounts by adding cryptoassets as a hedging tool in an already balanced portfolio.

Going on to comment on a question about the future role or use cases for decentralized applications (DApps) and if his company, eToro, is planning to offer some product(s) related to them, Greenspan said: 

Yes, of course. eToro has always been a leader in developing blockchain technology. At the moment we're doing a gradual rollout of our new crypto wallet app and very soon we'll be opening the doors to the all-new crypto exchange eToro X. Down the line we're looking at turning all the markets that are currently traded at eToro onto the blockchain and converting them into tokenized assets. We believe that this is the future of finance and the future of trading.

Litecoin (LTC) Is "Holding Up Extremely Well Against Almost All Of Its Peers"

Sharing an update regarding a research paper eToro’s team published earlier this year - which concluded that Litecoin (LTC) was “massively undervalued”, Greenspan revealed LTC may now be reasonably priced:

Actually not. At the time we wrote that paper, we compared Litecoin to some of the other cryptocurrencies and showed how it was undervalued in comparison, especially given that it had a larger portion of active users. However, during the recent market volatility, Litecoin is one of the best performing cryptoassets holding up extremely well against almost all of its peers.

When asked if other cryptos may be undervalued or overvalued, the senior market analyst at eToro remarked:

Personally, I never thought we'd see Cardano under 5 cents a coin again, so was a bit surprised to see it trading this low. EOS under $3 was also pretty shocking. The entire crypto market is really cheap right now compared to the highs we saw at the beginning of the year, as are some of the tech stocks but of course past performance is not an indication of future results and this isn't investment advice.