The recent decline in the cryptocurrency market has been dramatic. At its height in November 2021, the market almost hit $3tn, up from under $800bn at the start of the year.
Yet in November 2022, just one year later, it was pretty much back to where it started – at $821bn.
During this time, a series of high-profile collapses – including the LUNA hack and liquidation of FTX – have exposed potential fraud, misappropriation of funds, and accounts full of poorly-explained holes. Crypto influencers are waiting to see if they will be extradited for questioning, and further shadiness – or outright criminality – is likely to be exposed during bankruptcy (and potentially criminal) proceedings over the coming months and years.
The market had always been viewed as somewhat avant-garde, but today it looks more like a dodgy casino.
Confidence in institutional investing takes a hit
The rise of crypto attracted a wide range of reputable and experienced fund managers, from hedge funds to sovereign wealth funds. It’s not just mainstream cryptocurrency trading funds which have had a challenging time but also those trading exotic digital assets and engaging in Web 3.0 and DeFi. Some of these organisations have not only seen significant losses but also reputational damage, as they are seen to have invested in markets mired by sleaze and scandal.
How can these managers now begin to reassure and re-engage their investors?
Content is king for enabling investor trust
Regardless of the asset class or fund structure, transparency is the lynchpin of trust. Where a fund could once send static fact sheets by email at a set frequency, today’s investors are looking for something truly digital (hint: a PDF doesn’t count) that they can access at any time. In fact, they want to manipulate that data to drill down into what matters to them.
Spooked investors are also looking for reassurance from their fund managers. Thought leadership can demonstrate market expertise, outline the firm’s strategy, and give a sense of control during market turbulence. Whether it’s a blog, article, or podcast, this is the fund manager’s opportunity to disassociate themselves from the dodgy casino and build their own brand in the right light.
Transparency and crypto: a necessity
Many fund managers who want to provide clear, frank and transparent communication with their investors and prospects (but not necessarily with the wider world) use a fund marketing platform like Edgefolio’s FundPortal. This lets them deliver an array of interactive content to their investors, in a secure portal environment which they control. This content can range from financial data – which the investor can slice and dice – to thought leadership across a range of formats. All digital, all self service.
Here, there is further synergy for crypto fund managers, who are notoriously time poor. With markets open 24/7, they need to focus heavily on their investment strategy whilst still facing the understandable pressure to be transparent and defend their brand. Using a fund marketing platform lets them communicate efficiently and securely using modern technology that is in line with the expectations of many investors in crypto. It also establishes their brand as modern and technologically competent, which is likely to resonate with these investors – as it increasingly does with all modern investors.
If you are interested to see how a fund marketing platform like FundPortal could help you to provide transparency to your investors, get in touch.