Part of this growth has come from a deep dive into international markets, and leading the way is Matteo Perruccio, president of international for the firm.
Before making the leap into crypto, Perruccio’s career in traditional finance spanned 30 years, including stints as the global head of key clients and strategic relationships at Jupiter Asset Management, as well as chief executive of Olympia Capital Management, a fund of hedge funds.
A light bulb went off for Perruccio when he compared the innovation in crypto to both the rise of the derivatives market and alternatives within hedge funds.
“I remember the very first conversation I was having with people about hedge funds, you know, they were going, ‘This is impossible to have absolute return, they’re all fraudsters,'” Perruccio said. “Very similar narrative that I heard whenever I mentioned to my colleagues about crypto and digital assets, and of course in any innovation, there is fraud.”
When Perruccio looked at it more holistically, he could see the opportunities within the market and looked to move into the space. Wave Financial checked all the boxes as the first regulated crypto-asset manager in the US, which seemed a good middle ground for his traditional finance background.
“For me, it was the perfect partner … so I joined as president of international to help drive growth outside of the United States and build the business,” he said.
Perruccio expects the next wave in crypto adoption to come for investors looking for specialized wealth managers, particularly in international markets like Switzerland.
Investors previously would come to Wave Financial looking to gain some sensible exposure to crypto with the bellwether currencies, but now requests are becoming more specialized within different pockets of the crypto market.
“People are saying, ‘How do I get thoughtful risk-managed exposure to the DeFi evolution and revolution?'” he said. “And that’s not an easy thing … the actual investment process, where to hold it and all of that, and the risk of counterparties is also quite complex.”
The surge of interest in the firm’s NFT and active VC funds demonstrates that, he said.
Perruccio expects this next wave of institutional adoption will set crypto up for significant upside in 2022 against a challenged backdrop for equities and fixed income.
“I’m personally quite bearish to 2022 in equities … and it’s a question of where else to invest your money,” Perruccio said. “If we can get negative real returns in fixed income? Where do you put your money?”
“Stuff is starting to move, and I think 2022, hopefully I’m right, it’s going to be the year that we see it happen,” he said. “We’ll get approval of banks to hold crypto in a lot of markets. We saw India is going to announce regulation … So I think a lot can happen.”
But even with the trajectory looking strong for 2022, Perruccio is taking a cautious approach to his outlook for markets.
“First of all, I don’t trade crypto, and there’s lots of money to be made in in trading crypto, but what I buy, I buy because I believe in its medium- to long-term prospects,” Perruccio said. “So I’m a HODLer. “
While several industry signals suggest bitcoin could break out toward the end of this year, most industry experts think it won’t get to $100,000 by the end of year, he said.
“My expectation it’ll be starting a bull run, might get to $70,000 to $80,000, something like that, by the end of the year, but I think we’re going into a positive moment,” Perruccio said.
Further out, he expects bitcoin could reach $125,000 by the end of 2022, but it won’t necessarily be a smooth journey.
“What I tell my friends and family is, be exposed to this space, understand that it is highly volatile, so don’t commit capital that you can’t afford to be down on over a shorter period of time,” Perruccio said. “But I do believe the overall trajectory is upward over the next five years.”
“Also don’t forget, we have ripple rumoured to be coming out of its conversations with the SEC, and all of that on a positive note,” Perruccio said. “If that happens, you can expect that to run up pretty aggressively. “
Cardano, on the other hand, is controversial because it’s more centralized and has figurehead leadership, which goes against some of the core principles of decentralized cryptocurrencies.
“I think cardano has fantastic upside potential. It’s a great organization, and it’s a great protocol,” he said.
Perruccio suggests that there has been some innovative development coming out of cardano, as well as interesting work in the digital-identity space.
“But we see it as very high-quality programmers and community,” Perruccio said.
In a note, Perruccio’s colleague, president and managing partner Ben Tsai said he expects cardano to be the best-performing layer-one altcoin in 2022 and has a more bullish prediction that bitcoin will reach $200,000 by the end of next year.