Digital Assets Summit Write-Up

Published: 22 July 2021

AIMA’s inaugural Digital Assets Summit saw hundreds of members log-in across 17 different countries to learn from industry pioneers and institutional investors. In an event that brought together investment managers, allocators and service providers at the intersection of the global alternative investment and digital asset industries, AIMA took participants on a journey through the search for alpha in digital assets, the evolving regulatory landscape and institutional investor adoption.

Where did we land? Not quite the moon, but a belief that there is a robust opportunity for liquid active management in digital assets. While headlines have fixated on the price of Bitcoin, panellists spoke about opportunities to find alpha in a wider range of digital assets.

They emphasized that cryptocurrencies, such as Bitcoin, are just one use-case of digital assets. There exist many permutations of, and ways to invest in, digital assets, each with its risks and return profiles. As systematic funds and algorithmic traders, for example, seek to take advantage of inefficiencies in the market, rather than the digital assets themselves, others look for longer-term growth in underlying distributed ledger technologies. What is held to be true for all is that the digital assets ecosphere is still emerging, and opportunities lie in the potential to stand at the forefront of innovation.

However, that is not to say that navigating digital assets is an easy feat. A number of operational, infrastructural and compliance risks persist. From a regulatory perspective, the environment remains in flux as federal and U.S. state laws acclimatise to the growing digital world. On an operational level, in addition to practical aspects such as selecting service providers and negotiating new contracts, panellists confessed that staying on top of an ever-evolving market is difficult — not least one with a lack of data and market standards. It’s not just the technology, it’s also the interaction of the technology with the new ways it is being deployed, novel governance models and the development of an entire ecosystem. Against such a backdrop, the need for peer-to-peer collaboration has never been more important and we look forward to carrying forward the institutionalisation of the asset class with the ongoing work of the AIMA Digital Assets Working Group.