At the blacksmith’s house… The president of the ECB, Christine Lagarde, confessed weeks ago that her son had lost “almost everything” invested in cryptocurrencies despite warning him about the risk. Digitalization opens new eras, with new consumers and new interests, breaking patterns. Even a mother’s orders. More than speculation, the sector focuses on tools, which today allow a portfolio to be managed by an algorithm or for unrelated people to finance an apartment development.
“Finance evolves at tremendous speed. AI can speed this up even further. You have to be cautious and not get into things that are not understood. There are more and more opportunities and the way to take them is to train,” believes Luis Garvía, professor of Finance at Comillas Icade. Blockchain, DeFi, P2P… Here the attention goes to cryptocurrencies. Bitcoin has had a sublime year (150% revaluation, above $40,000) due to the possibility of ETFs linked to it being approved and the imminence of a technical process – halving – that will reduce payments to miners. It happens every about 4 years and usually shoots up the value.
“ETFs can contribute to greater institutional participation, with increasing interest in accessing the cryptocurrency market. “It would strengthen market maturity and recognition, making it more attractive to a broader range of investors and promoting long-term stability,” says Javier García de la Torre, director of Binance in Spain and Portugal. “If ETFs are not approved, the crypto market will continue to evolve, driven by innovation, adoption and regulatory clarity. “It has demonstrated resilience and adaptability,” he notes.
Bitcoin is going in streaks. The newspaper archive shows that it usually rises three years in a row and falls one. If it complies, in 2024 it would be the second year in the hike cycle. The problem is that the falls are usually noticeable. “It is essential that the investor do thorough research and take into account their risk tolerance,” says García de la Torre. The crypto world has already had a hole in the NFT market. The exchange of digital artworks has collapsed after the peak of 2021-2022, in which millions were paid for certified images… of monkeys! A recent study by dappGambl points out that today 95% of collections have almost no value. “What makes sense is the technology. The human component of expectations inflated a speculative bubble. When a new technology emerges there is a boom. And the more you go up, the more you go down,” Garvía values. The NFTs are not completely buried: in November they moved 910 million dollars, three times more than in October, after a year-long downward trend, they quote on Binance. Paying millions for a monkey is far away, however.
In the heat of digitalization, joint investment or financing platforms in real estate are also born, such as Urbanitae or Civislend. Money raised virtually for the physical world. “It opens up opportunities for retail investors previously reserved for high net worth or institutional investors. The risk-return balance is very attractive,” comments Iñigo Torroba, CEO of Civislend. In your case, a default on the loan that is made would be the great risk. With a minimum investment of 250 euros, it accumulates 52 projects, with a return in about 16 months and an average profitability of 11%. Torroba is not worried about the decline in real estate: “There will continue to be activity in large cities and capitals.”
In the digital world, investment can even be left in the hands of algorithms. Robo advisors, automated managers, follow patterns preset by a human committee, replicating indices. “The model portfolios are defined by the committee and change little, while a machine daily adjusts the clients’ real portfolios to these model portfolios,” explains Unai Ansejo, CEO of Indexa Capital, a leader in the sector. In Spain inbestMe, MyInvestor or Finizens are other examples.
They move more and more money: Indexa Capital has 1,890 million under management and 68,000 clients, with an average age of 39 years. New generations and ways of investing: “There are fewer commissions, diversification to reduce risk and automation when contributing,” allocating portfolios according to the user’s risk profile, highlights Ansejo. A standard one accumulates an annual return of 4.4%, it is detailed.
