1/ Notes on conversations about the state of crypto investing for traditional asset managers from convos with @garybasin 
2/ Many traditional asset managers want to get exposure to cryptoassets because returns are not correlated with other asset classes, thereby allowing them to improve the performance of a portfolio from a risk/return perspective (even if cryptoassets underperform).
3/ Others (mostly global macro folks) believe that Bitcoin (and perhaps a few others) have a chance at dethroning Gold and other precious metals as a safe haven asset.
4/ This would be a huge deal. The current market capitalization of the entire crypto economy is $250 billion whereas Gold is sitting at $3 trillion and offshore banking represents $20 trillion.
5/ Concerns over staying power, custodianship, liquidity, and legal risk will drive traditional asset managers to concentrate investments in Bitcoin, Ethereum and perhaps a couple other coins.
6/ From this perspective, Bitcoin is likely the best bet. Especially to the extent that an institution is interested in beta, as most other liquid coins are very highly correlated to Bitcoin (with less liquidity).
7/ Trading in and out of crypto is still quite difficult for asset managers used to more mature markets.
8/ Investment trusts like $GBTC are trading at 40% over net asset value.
9/ For asset managers comfortable with custodying their own firms, OTC is the most popular poption though all-in execution costs can be as a high as 5%.
10/ Exchanges are also an option, though from the perspective of traditional asset managers, crypto exchanges look like risky, unregulated, and vertically integrated monoliths.
11/ Tools like dark pools, order routers and executional algorithms are mostly nonexistent. It's unclear if the market is mature enough to support them.
12/ Gary put up a full post on crypto investing for traditional asset managers here: medium.com/@garybasin/cry…
13/ If you are a traditional asset manager (or accredited investors) looking at getting crypto exposure and want to talk through it, drop me a DM - would be interested in chatting.
