This past week we partnered with Victory Capital to bring you a follow-up webinar to the VAST Snapshot: Explaining Cryptocurrency originally presented to VAST top producers in Austin this past December. This week’s webinar was moderated by Joseph Geary, Victory Regional Sales Director and featured Mannik S. Dhillon CFA, CAIA, President of VictoryShares and Solutions and Scott Kefer, CFA, Senior Portfolio Manager at Victory Capital. Attendees had a chance to hear more about this investment option including time for Q&A – some of these are highlighted below:

Q: Why does crypto have value and what will drive it?

A: Supply and demand drive value and the fact that unlike dollars, which continued to be printed without regard for the volume in circulation, tokens on a blockchain have a finite number in circulation. For example, there will only be 21 million Bitcoin in circulation ever.

Q: What is Decentralized Finance (DeFi)?

A: This is answered in the CRYPTO FAQ, but in its simplest form, it’s democratizing the banking system the way we know it today. Taking the control off the private ledgers of the banks (JP Morgan, Citi, etc.) and putting in public domain. Think Google Docs.

Q: How does this all go wrong?

A: Bad Policy and too much restriction can push this into the darker corners of the world where it would be uncontrolled and unmonitored crushing the innovation around it.

Q: Hot Wallet for Cold Wallet?

A: These are different types of storage: holding them in a “hot wallet” is keeping the data on something like CoinBase. Cold Storage would be transferring the data to a storage device not connected to the internet. Another pitfall to avoid is poor password protection, many times when buying coins individually on an exchange like Coinbase there is no customer service to call to say my wallet is not set up incorrectly or it’s been stolen.

Q: Seems like a tough sell for clients to essentially be responsible for their own custody in this environment – how do you explain that?

A: This is why you’re seeing more of an appetite for funds like ours, where clients being responsible for custody isn’t an issue. When buying individual coins clients should consider not keeping it in a “hot wallet”; cold wallets have problems too with heirs not knowing how to access it or the cold wallet/thumb drive getting lost; consider institutional grade vehicles that keep assets safely.

Q: How do we evaluate which blockchains are better than others?

A: Along with the use case for the blockchain, make sure governance and oversight are in place, look to institutions who are thoroughly vetting these blockchains; volume and liquidity should also be major considerations.

Q: What criteria should we pay attention to when determining what crypto assets to invest in?

A: Both the CRYPTO FAQ and the 2 images linked below go into detail about the rigorous selection process for inclusion into the NCI (Nasdaq Crypto Index).

You can also refer to our previous articles on The Gateway with additional resources by typing “Crypto” in the Search bar (click the magnifying glass icon above in the main menu bar).

For more information on Victory Capital’s Crypto Assets, Contact Joseph Geary, Regional Sales Director | email:  jgeary@vcm.com

GVA Contact: GVA Operations Team