After a severe bout of volatility and a string of several spectacular failures in crypto earlier this year, some voices of the traditional financial industry were quick to pronounce these assets dead—but people in the crypto and blockchain business say advisor interest in digital assets is higher than ever.

“Every time a drawdown occurs, we see the demand for education increase, and in crypto every time it exposes a lack of supply in quality education and information,” says Jahon Jamali, co-founder of Sarson Funds, a crypto asset manager and education provider for financial advisors.

Despite prominent naysayers like economist Nassim Taleb and legendary investor Warren Buffett, cryptocurrencies may already have a strong foothold.

For example, they are already being used to provide essential services to underserved and non-banked communities, says Ben Richmond, founder of CUBE, an AI-powered regulation and compliance research firm. “Crypto in and of itself is becoming something that is not yet systemic but is very important within mainstream financial markets as well,” Richmond says. “As the space matures, we are seeing the rises and the falls, the good and the bad in that world.”

Rough Times
Over the past six months, there have been more falls than rises, more bad than good. In May, Terra, a stablecoin associated with the Luna cryptocurrency, failed, causing a $60 billion washout. In subsequent weeks, crypto hedge fund Three Arrows Capital collapsed, causing Celsius Network, a crypto lender, and Voyager Digital, a crypto exchange, to collapse.

“That’s part of what got us into the 2008 financial crisis—who could have ever thought that all of those things could have gone wrong? Everyone was doing it, everyone was assuring each other that they were solvent,” says James Niosi, CEO of InvestDEFY, a Canadian firm specializing in digital asset structured products. “The same thing is happening in crypto.”

Not only did the headlines cosmetically look like the early stages of a potential financial crisis, Niosi says, but a lot of investors were left holding the bag as these projects failed.

But instead of causing a flood of people exiting the digital assets space, the turmoil may simply have led investors to different crypto intermediaries instead. While cryptocurrency was first adopted by self-directed investors who often distrusted traditional finance, its recent performance has brought in a broader swath of the public, and newcomers are seeking out regulated solutions to accessing digital assets, says Gene Grant, CEO of LevelField Financial.

“People are already asking about how to integrate digital assets into their portfolio,” he says. “Regardless of their wealth stature, people want to get involved. Right now, large firms are not providing the ability for wealth managers to provide that advice that clients desperately want.”

LevelField is seeking to become a comprehensive financial services firm encompassing digital asset services as well as traditional finance. The company is in the process of acquiring a full-service chartered bank. It already owns a small investment bank and broker-dealer, and it will spin off a wealth management firm and RIA in the near future.

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