2021 was a big year for cryptocurrencies. In mid-November, the asset class reached a monumental $3Tr. The hype was palpable worldwide as crypto once again stole the headlines with a fresh digital gold rush. Everyone brave enough to navigate the complicated world of crypto exchanges placed their bets on the financial innovation taking the world by storm. Unfortunately, most weren’t prepared for the price volatility (large increases and decreases) that are the norm of new markets. The months ahead saw severe price drawdowns as the markets reacted to the continuing pandemic, global conflict in Russia, and record-high inflation. Many bought high and sold low, exiting the crypto market at a loss.

A little education goes a long way in all things with inherent risk. The most studied of investors will tell you to “zoom out”. Crypto is growing fast. Even as the global markets slowed down, the rush of investors pouring billions of Dollars into blockchain innovations has only increased. In March this year, $225Bn in venture capital was raised by crypto startups. As Raoul Pal, the influential macro investor, says, “The crypto space is growing at 113% per year in terms of users. Even if it slows down to the 63% growth rate of network adoption the internet saw at the same stage, it’s going to lead to 4bn users by 2030 or earlier.”

We’ve reached an important stage in adoption where the world’s biggest private banks (JP Morgan and Goldman Sachs) offer crypto to their clients. Star athletes and mayors in the US are taking part of their salaries in crypto. Countries are adopting crypto as legal tender, led by El Salvidor last year, and Honduras and Portuguese Madeira recently. It’s hard not to feel FOMO as the momentum builds to the next big crypto market push.

Is it too late to invest?

Most people considering a crypto investment fear that they’ve missed the boat — that crypto is a pyramid scheme, and they’re filling the early adopter’s retirement funds. This is an excellent time to step back and “zoom out”. Bitcoin, the leading cryptocurrency holding 40% of the total crypto market’s value, has a market capitalisation of $750Bn at writing. To put that into perspective, Gold (the asset that Bitcoin is projected to usurp over the next decade) has a market capitalisation of around $12Tr.

The most significant shift will come from the global bond market (corporate and government debt), which has entered a period of negative growth and currently has a market capitalisation of $123Tr. The global stock market, which Bank of America recently said should be outperformed by crypto in the year ahead, has a market capitalisation of $105Tr. The entire crypto market is currently valued at around $2Tr. At the current rate of growth, cryptocurrencies will displace a considerable portion of these markets by the time it reaches 4 Billion users.

Learning from dot-com

Luckily, the crypto boom is not without precedent. The dot-com era of the late 1990s saw the innovation of the internet explode onto the global stage. During the five years leading up to the peak in March 2000, many businesses were started with the focus of staking their plot of digital property.

The theory behind the boom was that out of the rapidly growing pool of internet companies — one was bound to make it. The businesses and investors behind the boom threw everything they had at the task, not unlike the space race of the cold war — winner takes all. In reality, many more than one company established themselves as global powerhouses for the age ahead. We saw the rise of Amazon.com and eBay, setting the foundations for the future of Silicon Valley and the social media era.

The dot-com bubble is a cautionary tale we can learn from. The two market leaders were Amazon.com and Pets.com. While Amazon is a household name, few remember Pets.com today. After raising $82.5m in February 2000, the company failed to convert its potential to earnings, and by November, Pets.com declared bankruptcy and closed its doors. The lesson is never backing one horse in an innovation race. The safest play is to diversify. Easier said than done in a volatile market filled with thousands of competitors!

Crypto index investing

One of the latest and potentially most lucrative ways to invest in crypto comes from Altify, a Cape Town-based investment platform backed by JSE listed Sabvest. Having studied the dot-com era, Altify offer ready-made, indexed crypto portfolios called Bundles, that give users direct exposure to crypto-assets. Curated by the Altify financial analysts, the Bundles rebalance every month, selling a portion of the assets that increased in price and buying those that decreased to maintain a preset balance. The effect of rebalancing on the Bundle value is steady, long-term growth that outperforms the assets alone. The same service that a personal wealth manager would offer their clients is built into each Bundle.

A dedicated “blue chip” Bundle holds the Top 10 digital assets in crypto. A DeFi or Decentralized Finance Bundle goes a step further and invests in companies that aim to recreate financial services without the middlemen, using blockchain and other technologies. A Payments Bundle offers the leading cryptocurrencies changing the way cross-border and day to day payments happen. A Smart Contract Bundle holds the cryptocurrency platforms that allow developers to build a new ecosystem of secure internet apps.

Each Bundle is designed according to its digital asset subset to deliver consistent profit and outsized returns. They are developed with a deep understanding that not all cryptocurrencies are equal, and they shouldn’t be treated the same way.

The Altify Smart Contract (17.94%), Top10 (12.22%), DeFi (9.67%) and Payments Bundles (7.3%) have all returned impressive 30-day returns.

The next time you feel crypto FOMO, do yourself a favour and make a smart, diversified investment. Altify Bundles are curated by financial experts. They work for you when you’re not watching. Most importantly, they offer the best way to make sure you’re holding the next Amazon.

The Payment Bundle provides equally weighted exposure to the top 5 payment focused cryptocurrencies looking to make payments cheaper, faster and more global. These cryptos include the likes of Bitcoin, Ripple, Bitcoin Cash, Stellar and Litecoin.

The DeFi Bundle offers market capitalisation weighted exposure to the top 10 decentralised finance cryptocurrencies focused cryptocurrencies that are revolutionising the financial system by using smart contracts and blockchain technology. These cryptos include the likes of Uniswap, Thorchain, Aave and Curve.

The Smart Contract Bundle provides equally weighted exposure to the top 5 smart contracts focused cryptocurrencies like Ethereum, EOS or Tron that enable developers to build applications on top of their blockchains, similar to how Apple builds apps on top of its OS operating system.