What Institutional-Grade Fund Management Can Teach Crypto Investors On Closing The Gap Between Retail Frenzy And Institutional Discipline
Amid the rapidly changing universe of cryptocurrency, where meme coins explosively surface overnight and speculative fad trends are staged, institutional investors are arriving with an extremely different mentality. Instead of going after short-term gains, they emphasize risk-adjusted returns, diversification, and intense research like crypto fund of funds.
An illustration is the multi-manager fund Block Asset Management (BAM) that offers a diversified exposure to digital assets across DeFi, infrastructure, market-neutral strategies, tokenized RWA, and more. They use a fund of funds model with digital assets. While they are targeting high-net-worth and institutional investors, much of what they do is informative to retail investors, such as myself.
This article delves into how retail crypto traders can leverage institutional ideas in constructing the smartest and most robust portfolios possible.
Diversification Is not a nice to have, but rather something necessary. Most individual investors are overexposed to a few tokens, typically chosen due to their momentum or hype. Institutions do things in a portfolio style: deploying capital to work across a wide range of asset classes and strategies to minimize the impact of any one investment volatility while preserving the upside.
Institutional crypto portfolios geberally look to be diversified with:
• Long/short market-neutral funds
• Yield-generating and staking DeFi protocols
• Real-world asset tokenization (RWAs)
• Stablecoins and infrastructure tokens
• NFTs or blockchain gaming (in moderate amounts)
What are the Lessons here: You do not require 100 tokens, but you do need to diversify on purpose. Will my portfolio be …
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