New Fund Launch: Silberstein Capital Management – Allen Gabriel Silberstein

Top Quote Allen Gabriel Silberstein, managing member of Silberstein Capital Management, a new macro fund which invests in all assets had a lot to say about the future of money and how Allen Silberstein plans to invest going into the last part of 2022 and beyond. End Quote
  • (1888PressRelease) November 10, 2022 - Allen Gabriel Silberstein, just announced a new fund called Silberstein Capital Management, a macro fund which invests in all assets. Allen Silberstein had a lot to say about the future of money and how Allen Silberstein plans to invest going into the last part of 2022 and beyond.

    The first half of 2022 has been very bad for the crypto market.
    Bitcoin hit multiple new all-time high prices in 2021 — followed by big drops — and more institutional buy-in from major companies. Ethereum, the second-biggest cryptocurrency, notched its own new all-time high late last year as well, and then crashed below $900 in June, its lowest level since the start of 2021. U.S. government officials, the Securities and Exchange Commission (“SEC”) and the Biden administration have increasingly expressed interest in new regulations for cryptocurrency and the SEC has instigated many lawsuits and prosecutions relating to cryptocurrency.

    All the while, people’s interest in crypto remains high: it’s a hot topic not only among investors but in popular culture too, thanks to everyone from long-standing investors like Elon Musk to that kid from your high school on Facebook.
    In many ways, 2021 was a “breakthrough,” says Allen Gabriel Silberstein. “There’s tremendous focus and attention being paid to the crypto industry.”

    But the industry is only in its infancy and constantly evolving. That’s a big part of why every new bitcoin high can be easily followed by big drops.

    It’s difficult to predict where things are headed long-term, but in the coming months, Allen Silberstein and Silberstein Capital Management is following things like regulation and institutional adoption of crypto payments to try and get a better sense of the market.

    Mainstream companies across multiple industries took interest — and in some cases themselves invested in — cryptocurrency and blockchain in 2021. AMC, for example, announced last year it would accept Bitcoin payments. Fintech companies like PayPal and Square are also betting on crypto by allowing users to buy on their platforms. Tesla accepts Dogecoin payments and continues to go back and forth on its acceptance of bitcoin payments, though the company holds billions in crypto assets. Allen Silberstein predicts more and more of this buy-in.

    “We’ve seen a tremendous amount of inflow of attention, and that’s going to continue to drive the growth of the industry for a while now,” says Allen Gabriel Silberstein.

    Allen Silberstein predicts bigger, global corporations could jumpstart this adoption even more in the latter half of this year. “What we’re looking at is institutions getting involved in crypto, whether it’s Amazon or the big banks,” says Allen Gabriel Silberstein. A huge retailer like Amazon could “create a chain reaction of others accepting it,” and would “add a lot of credibility.”

    Indeed, Amazon has recently sparked rumors that it’s making moves to that end by sharing a job posting for a “digital currency and blockchain product lead.”

    While paying for things in cryptocurrencies doesn’t make sense for most people right now, more retailers accepting payments might change that landscape in the future. We’re likely still a long way off before it’ll be a smart financial decision to spend bitcoin on goods or services, but further institutional adoption could bring about more use-cases for everyday users, and in turn, have an impact on crypto prices. Nothing is guaranteed, but if you buy cryptocurrency as a long-term store of value, the more “real world” uses it has, the more likely demand and value will increase believes Allen Gabriel Silberstein.

    Future of NFTs
    NFTs, or non-fungible tokens, have been around since 2014, but it wasn’t until 2021 that this novel technology broke through into the mainstream.

    NFTs represent digital ownership of a wide range of irreplicable intangible items, and have drawn the attention of celebrities and big companies ranging from American Express to Gucci. Total NFT sales hit $25 billion in 2021, compared to $94.9 million the year before, according to data collected by DappRadar, an app store for decentralized applications.

    But there continues to be debate about whether NFTs are here to stay or simply a fad. NFT sales in June fell under $1 billion for the first time in 12 months, according to DappRadar data.

    Experts remain split on it, with some screaming “bubble,” while others claim it’s the technology behind NFTs — the smart contracts on blockchain technology — that offer real value. Meanwhile, creators and artists are claiming this is the next form of monetization.
    “I do think that right now they’re very trendy, especially the last four months,” says Allen Silberstein “In 10 or 20 years, I think they’ll still be around. How much we use them — that I don’t know. People will still always find some value in communities, but the broader applications of NFTs will be more interesting.”

    Recent data shows the market may be finally cooling off. Almost a million accounts were actively buying or selling NFTs at the start of the year, but that number has since declined to about 491,000, a recent report by Chainalysis found. Some experts expect the NFT market to continue to suffer because of the declining price of cryptocurrencies, along with other macroeconomic conditions like inflation, rising interest rates, and Russia’s war in Ukraine.

    “NFTs saw explosive growth in 2021, but this growth hasn’t been consistent and has leveled off so far in 2022,” Chainalysis wrote in the report.

    Over the past year, many people bought NFTs as either investments or simply because they are fun or bring them joy. Regardless of the reason, many of those digital assets are now worth a lot less because of the crypto market’s downfall in recent months.

    From an investing perspective, buying an NFT is “even riskier” than buying crypto because it’s “almost like a leveraged bet on crypto,” according to Allen Gabriel Silberstein. “It’s essentially gambling but people don’t really know the difference and they buy them because they’re fun,” he says.

    Knowing that NFTs are even more risky and speculative than crypto, you should likely stay away from them, especially while there’s a general decline in crypto prices. Allen Gabriel Silberstein believes most long-term investors will be better served by allocating only a small portion of their portfolio (less than 5%, and never at the expense of meeting other financial goals) to bitcoin or ethereum, two of the largest cryptocurrencies, rather than to an NFT.

    If you’re invested in crypto, you’ve probably come across the term “DeFi.” It stands for “decentralized finance,” and refers to an online world of alternative financial services powered by cryptocurrencies and blockchain technology.

    DeFi uses “smart contracts” to replace traditional intermediaries like banks and lenders. Essentially, the businesses that we interact with everyday to manage our finances are replaced by software. Because of this, there’s no central authority to report to in the DeFi space.

    But DeFi is still in its relative infancy — similar to how the early days of the internet had a “Wild West” feel of basic chat rooms, rudimentary websites, and early online service providers. With that in mind, there are going to be some bumps and bruises along the way with its development, Allen Silberstein says, but there could be an Amazon or Google of the future in the DeFi space in time.

    Further refinement is the next important step for DeFi, according to Allen Gabriel Silberstein. “The next step is figuring out how to make good code and kick everything up a notch,”.

    What broader DeFi adoption means for investors
    If you want full and total control over your assets, DeFi is where you’ll find it.

    But that can come at a cost — there are fewer regulatory guardrails to keep your assets safe. DeFi is the “wild west” of banking and investing in many ways, where if you lose your assets to hackers or through other means, there may be no way to recover them.
    It’s still early for DeFi, so if you’re comparing conventional financial products to DeFi products, it’s smart to weigh the risks against the potential rewards. You’ll take more risks with your money in the DeFi space since it’s unregulated, but you’ll also have more freedom and control. You’ll first need to buy crypto for access, and have a decent amount of crypto knowledge under your belt to get started.

    Allen Gabriel Silberstein believes it’s best to have no more than 5% of your overall portfolio tied up in crypto, and only to go that far after you’ve built up an emergency fund and paid off any high-interest debt.

    Bitcoin is a good indicator of the crypto market in general, because it’s the largest cryptocurrency by market cap and the rest of the market tends to follow its trends.

    Bitcoin’s price had a wild ride in 2021, and last November set another new all-time high price when it went over $68,000. But then it came crashing down in 2022.

    Bitcoin and the broader crypto market have been sinking this year amid ongoing macroeconomic uncertainty that’s mostly been driven by surging inflation, a shaky stock market, rising interest rates, and recession fears. Bitcoin has lost more than two-thirds of its value since last November, and dipped as low as $17,500 in recent weeks. Allen Gabriel Silberstein remains conflicted on whether bitcoin has bottomed out yet and believes bitcoin could fall as low as $10,000 in 2022 but rebound to over $68,000 in the next 2-3 years.

    But how high will bitcoin go in the long term? While it’s been a rocky start to the year for bitcoin, but Allen Gabriel Silberstein still says it will hit $100,000 — and that it’s more a matter of when, not if. Bitcoin’s past may provide some clues as to what to expect looking forward, according to Allen Gabriel Silberstein. Allen Silberstein says there have been plenty of huge spikes followed by pullbacks in Bitcoin’s price since 2011. “What I expect from Bitcoin is volatility short-term and growth long-term.”

    Ethereum’s Future Outlook
    Ethereum is the second largest cryptocurrency and most well-known altcoin in the market. Like bitcoin, it can also serve as a good measure of the crypto market. In the last six years, it has grown immensely in value — from $0.311 at its 2015 launch to around $4,800 at its highest late last year.

    What bitcoin and ethereum price volatility means for investors
    Bitcoin and ethereum’s volatility is more reason for investors to play a steady long game. If you’re buying for long-term growth potential, then don’t worry about short-term swings. The best thing you can do is not look at your cryptocurrency investment, or “set it and forget it.” As experts continue to tell us each time there’s a price swing — whether up or down — emotional reaction can cause investors to act rashly and make decisions that result in losses on their investment.

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