As consumer inflation in the U.S. hits record highs, the Federal Reserve has indicated that interest rates will rise several times throughout the year, starting as early as March. Unsurprisingly, the traditional markets declined as a result, with tech and crypto following shortly.
Amid this year’s uncertain investor climate, we sat down with crypto thought leader Tatiana Koffman to get her perspective on hedging strategies during cyclical times.
While advocating heavily for Bitcoin and other major blockchain infrastructures, The Forbes Money & Markets columnist urges investors to avoid buying into the “religion of crypto.” She cautions that liquid prices are not representative of active users or underlying business growth for these coins. The perceived potential of a project and the excitement it generates amongst investors dictate price.
But should you never bet your money on crypto? Koffman says no. Understanding what is relevant to the future of a coin means that one can opt-in during dips, and avoid getting greedy during peaks.
Koffman also encourages investors to seek out early-stage investment deals across financial infrastructure, namely centralized and decentralized exchanges. These, she asserts, are best positioned to make a return across multiple cycles.
But her main guiding principle is that our investment philosophy should always remain the same, regardless of market conditions.
“From the beginning, my investment thesis has been unchanged. I still see Bitcoin being a $1M asset within five years,” says the recently appointed guest professor at UCLA.
Starting her career as an attorney and then venture capitalist for Linkin Park and The Chainsmokers, Koffman now invests on behalf of her family office and select clients. Koffman guest lectures weekly and her work has been quoted and used as teaching material at UCLA, Oxford, Sorbonne University, and Michigan Law Review.
While most crypto investments fail to bear fruit, it seems that the king of cryptocurrencies is still a horse you can bet on. No one is saying that Bitcoin will never fall below its current price. But the experts say that there is far more capital coming for the asset.