Insights from the Morningstar Investment Conference: Starke Finance in Attendance

Insights from the Morningstar Investment Conference: Starke Finance in Attendance

Starke Finance was in attendance at the recent Morningstar Investment Conference (MIC) in Chicago, which featured some of the finance industry’s most influential players.

As one of the most prominent finance events on the US calendar, MIC provided plenty of thought-provoking commentary about investment strategies, portfolio construction tactics, and the future of finance as it pertains to both AI and digital assets. Discussions about tech stocks and their potential for rapid returns, as has been the case with NVIDIA and TESLA, were at the forefront of the conversation, but particularly telling was that on the conference’s opening day keynote presentation, ‘Cutting Through the Noise: Rick Reider on What Matters Now’, Blackrock’s Chief Investment Officer, Rick Reider, highlighted to the audience that holding both gold and Bitcoin as we enter a new frontier of finance, should be considered a wise decision.

This was an important statement that further validated the placement of digital assets in contemporary portfolio strategies, not only because of high-yield potential, but because technologically, this is a new alternative asset class that cannot be ignored. Opinions were also expressed by key opinion leaders on stage that some of the price volatility seen in certain verticals of digital assets, may not be a defining feature in the future. As is the case with most new technology, price volatility is to be expected as both operational capabilities, and product-market fit, are explored at length. The key rationale behind this theory was the potential upside of ‘getting in early’ in digital assets, in order to boost longer-term upside performance for investors, regardless of the overall percentage this category holds in a portfolio.

Closing out the conference was the panel, ‘Unlocking the Future: Integrating Cryptocurrency into Your Investment Portfolio’, featuring Blackrock, Bitwise, T. Rowe Price, and Morningstar. As Starke Finance appeared to be the sole DeFi representatives from the industry at MIC, we were particularly interested in the views of this panel as we continue to embark on building the bridge to traditional finance. Some key takeaways included:

• Bitcoin is viewed as such a defining category leader, that some asset managers view digital asset investment as ‘Bitcoin, and then everything else’; with Bitcoin being eponymous with crypto, as well as the original token, its value has been largely cemented as a key digital asset of choice–but the same cannot be said for many altcoins at present
• Based on a live audience poll, portfolio holdings for cryptocurrency were largely forecast to be 5%, with outliers for more than 20% existing amongst audience members; this further illustrated the appeal of Starke Funds due to our tokenized Real World Asset diversification options. In practice, however, asset managers were seeing allocations of between 0.5% and 2% in digital assets.

• On selecting cryptocurrencies for a portfolio, traditional finance was aligned with what decentralized finance investors already knew: Can a case be made for real-world utility and therefore, future realizable value and growth? What future tokens, or current ones, will convincingly put forward a case for generating value? As the sector matures, we expect to see current and future projects pay more attention to the traditional hallmarks that make an investment instrument attractive.

• In terms of where the industry currently stands, it is viewed through a similar lens as the .com bubble in the 90s: What will stay, what will go, and what will emerge? Only time will tell.

The Morningstar Investment Conference in Chicago allowed for critical insights to be made about how the world of traditional finance views decentralized finance. It was evident that much of the pathway towards mass adoption will hinge on education; teaching and advocating for the benefits of blockchain technology in finance and how this can not only improve net returns as part of a balanced portfolio, but provide the kind of user experience that many traders have long wanted. A trading experience that is open 24/7, with a wide-range of asset types, less hurdles when it comes to minimum buy-in, and greater flexibility when it comes to what they can do with their investment.

Starke Finance is excited to be at the forefront of the financial revolution, and we look forward to working with our constituents in the world of traditional finance towards a future that is digital.