Analysis on Alternatives Watch from OSL Head of North Americas Jeff Howard: Defrosting ‘Crypto Winter 2.0’

The digital asset market experienced a rocky start in 2022, with many pundits labeling the recent bear cycle “crypto winter 2.0.” This is a mischaracterization and does not accurately represent the current opportunity set.
Despite volatility and downward pressures, the burgeoning digital asset class continued to be adopted by institutional investors and integrated into the broader financial services ecosystem at a rapid pace in 2021. In the coming year, widespread adoption and global regulation will push digital assets into more institutional portfolios, as crypto reaffirms its position as the first and best performing new asset class of the past 30 years.

With any growing market, the long-term investment window is incredibly important. Movements in the short-run can cause excitement or concern depending on their direction, but how an asset class performs over the course of many years is a key indicator of its true strength. BTC is the best performing asset of the past decade. With total global market capitalization topping $3 trillion in 2021, it is hard to deny that digital assets have emerged as a new financial sector and asset class. One need only look at the number of dollars invested in the last 12 months and the sophistication of the current ecosystem to see that the structural drivers for widespread institutional adoption and growth of digital assets have never been stronger.

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