Crypto portfolio diversification Explained

| November 17, 2023

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Cryptocurrency market traders utilize an array of tools to craft successful portfolio strategies geared towards long-term growth. Implementing effective diversification in cryptocurrency can serve as a valuable measure to alleviate both volatility and security risks. Nonetheless, it’s crucial to acknowledge that the absence of regulatory oversight can influence the valuation of digital assets held within the portfolio.

What is cryptocurrency portfolio? A cryptocurrency portfolio denotes a mixture of cryptocurrencies that an individual or institutional investor holds as an investment component within their broader portfolio. Its core aim is to strategically allocate various crypto assets to yield enhanced returns.

Why Diversify Your Crypto Portfolio?

Diversification is a strategic approach that involves allocating your investments across a range of different assets. Instead of concentrating all your capital in a single asset class like cryptocurrencies or gold, diversification entails dividing your investment percentages among various assets within your overall portfolio. This method serves to mitigate risk and reduce volatility, ultimately enhancing the stability of your portfolio. By diversifying, you prevent the possibility of catastrophic losses should one specific cryptocurrency investment, like Cardano, which you heavily bet on as an Ethereum rival, experience a sharp price decline.

In simple terms, cryptocurrency diversified portfolio ensures that you don’t face the risk of losing everything at once in the event of a downturn in one particular investment. 

When it comes to diversifying your cryptocurrency holdings, the approach involves spreading your investment across multiple coins, tokens, or projects. Even investing solely in a single cryptocurrency, even if it’s a top-tier option like Bitcoin or Ethereum, carries its own risks. Both Bitcoin and Ethereum have witnessed significant price fluctuations over the past year, and such movements are likely to persist in the future.

For instance, in early 2021, Bitcoin’s price surged notably in conjunction with Coinbase’s public listing, fueling speculation about its imminent adoption by institutional investors. However, this optimism later shifted due to growing concerns about Bitcoin’s environmental impact and carbon footprint, with critics highlighting its relatively higher energy consumption compared to other cryptocurrencies.

Placing all your investments into a single asset stored in self-custody smart crypto wallet exposes you to the risk of substantial losses triggered by a singular event, such as a market crash, a cryptocurrency bear market, or even a seemingly minor occurrence like an unexpected crypto malware attack. By diversifying your investments across various coins and tokens including different sets of hot wallets and cold wallets, you reduce your vulnerability to the repercussions of negative news events or market downturns. This approach allows you to navigate through challenging periods and continue growing your portfolio.

Most prominent use-cases in Web3 and their assets class

Web3, the decentralized internet, introduces a range of prominent applications, each associated with distinct asset classes: 

Decentralized Finance (DeFi): DeFi platforms use smart contracts to create financial services like lending, borrowing, and yield farming. Assets class includes cryptocurrencies like Ethereum (ETH) and DeFi tokens such as Compound (COMP). 

Non-Fungible Tokens (NFTs): NFTs represent ownership of unique digital assets, often used in art, gaming, and collectibles. They fall under the digital art and collectibles asset class – stored using hot/ cold polygon wallet.

Decentralized Autonomous Organizations (DAOs): DAOs employ blockchain governance for decision-making. DAO tokens stored using self-custody smart crypto wallet represent voting power and assets, such as governance tokens in the governance asset class. 

Blockchain Gaming: In-game assets and tokens within blockchain-based games are categorized under the gaming asset class, with cryptocurrencies like Axie Infinity (AXS) leading the way.

Decentralized Storage: Projects like Filecoin (FIL) offer decentralized file storage solutions, belonging to the storage asset class.

Web3 Infrastructure: Blockchain platforms like Ethereum (ETH) and Polkadot (DOT) are essential for Web3 infrastructure, forming the blockchain infrastructure asset class.

These use cases illustrate the diversity of assets and opportunities in the emerging Web3 ecosystem.

Types of Cryptocurrencies for Diversification

Diversifying one’s cryptocurrency investment portfolio involves exploring various types of cryptocurrency investments beyond the well-known Bitcoin and Ethereum. These options span several categories, including:

Altcoins: Alternative cryptocurrencies other than Bitcoin, like Litecoin (LTC) or Ripple (XRP), offer unique features and use cases.

Privacy Coins: Examples like Monero (XMR) and Zcash (ZEC) prioritize user privacy through advanced encryption.

Stablecoins: Pegged to stable assets like the US dollar, stablecoins like Tether (USDT) provide stability amidst crypto market volatility.

DeFi Tokens: Tokens powering defi integrations and access to decentralized finance platforms, such as Chainlink (LINK) and Aave (AAVE), enable various financial services.

NFTs: Non-fungible tokens, like CryptoPunks and NBA Top Shot, represent ownership of unique digital assets.

Utility Tokens: Tokens specific to particular blockchain ecosystems, like Binance Coin (BNB) for Binance Smart Chain.

Exploring these diverse cryptocurrency types in conjunction with Defi integrations allows investors to spread risk and seize opportunities across the evolving crypto landscape.

Different Strategies for cryptocurrency diversified portfolio

Within your crypto or blockchain portfolio, diversification can encompass a variety of elements, including different cryptocurrencies, industries, and even investments like physical real estate.

In essence, you can diversify in several ways:

Cryptocurrencies and Tokens: One of the most straightforward methods to diversify crypto portfolio is by expanding your holdings to include various digital coins and tokens. 

Here are some types of crypto assets you can consider:

Payment Tokens: These are well-known cryptocurrencies like Bitcoin and Ethereum, which can be used for transactions wherever they are accepted.

Security Tokens: Backed by underlying assets like real estate, security tokens represent ownership and are often fractionally owned. 

Utility Tokens: Tokens with specific use cases within blockchain or crypto ecosystems are called utility tokens. 

Governance Tokens: These tokens enable users to participate in the governance of a blockchain network. Notable examples include Uniswap and Compound.

Basic Attention Tokens: Users can earn tokens for their attention, especially in digital advertising contexts. The Brave browser network is associated with a well-known basic attention token.

Gaming Tokens: Investors can hold coins with in-game value that are also tradable on third-party exchanges. Decentraland’s MANA is a prominent example in the world of blockchain-based gaming.

Non-Fungible Tokens (NFTs): These digital tokens represent ownership of specific assets and are considered “non-fungible” because the underlying assets are unique and not interchangeable.

Diversification in cryptocurrency holdings across these categories can help you manage risk and potentially enhance your portfolio’s performance.

Another approach to diversify your crypto or blockchain portfolio is by investing in cryptocurrency projects that focus on different industries. Blockchain technology is actively reshaping numerous sectors, presenting opportunities for portfolio expansion.

You can broaden your crypto portfolio into various industries, including:

Healthcare: Blockchain technology enhances efficiency and security in healthcare. Investors can consider healthcare-focused cryptocurrencies like MediBloc and Dentacoin. 

Supply Chain: Blockchain improves transparency in supply chains. VeChain, for instance, is designed for the supply chain industry.

Transportation: Blockchain innovation can enhance multiple aspects of the transportation sector. Transportation-focused coins include Mass Vehicle Ledger and ParkinGo.

Entertainment: Blockchain platforms support a range of entertainment options, and entertainment companies can integrate blockchain technology. Some entertainment coins include ApeCoin and Reef.

Climate Change: Blockchain technology can bolster efforts to combat climate change. Climatecoin is an example of a digital currency facilitating transparent investments in sustainability projects.

Real Estate: Blockchain enables investors to access fractionalized real estate investments. HoneyBricks, for example, offers a marketplace for blockchain-based real estate tokens.

Private Equity: This alternative asset class, typically organized as limited partnerships, acquires and restructures companies. Some private equity funds have begun tokenizing their holdings to facilitate the buying and selling of underlying shares in the fund.

Moreover, crypto market investors can also diversify across industries by investing in public companies actively engaged in blockchain projects. This strategy may involve limited options, focusing on publicly traded companies genuinely pursuing blockchain integration strategies.

Diversification by asset class offers crypto and blockchain investors with hot wallets, cold wallets, and self-custody smart contract based wallets a multitude of options to broaden their cryptocurrency portfolios.

Here are some key asset classes that can be considered for portfolio diversification:

Stocks: Investors can purchase stocks of companies that operate within the crypto sector or companies holding significant cryptocurrency assets on their balance sheets. Numerous crypto mining and hardware companies are publicly traded, and examples include MicroStrategy, which holds substantial crypto assets.

Bonds: Investors may explore blockchain-based bonds that are digitally issued or bonds that invest in cryptocurrencies like Bitcoin. Notable entities such as the World Bank, the European Investment Bank, the Singapore Exchange, and even El Salvador have issued blockchain-based or crypto bonds.

Real Estate: Investors have the option to acquire blockchain-based real estate tokens, offering exposure to the world’s largest asset class. 

Diversifying across these asset classes can help crypto investors manage risk and create a well-rounded portfolio with exposure to various financial instruments.

Minimizing Risk in Diversified Crypto Portfolios

Feeling disheartened by the current Bitcoin price? Another effective approach to achieve cryptocurrency diversified portfolio, potentially reducing its risk profile, is to explore publicly traded cryptocurrency companies.

Within the cryptocurrency sector, a wide array of businesses operates, either partially or exclusively:

  1. Cryptocurrency mining companies engage in the production of new cryptocurrencies.
  2. Crypto payment integrators facilitate the acquisition of cryptocurrencies using traditional fiat money.
  3. Hardware wallet manufacturers produce physical cold-storage wallets for enhanced security.
  4. Digital asset custodians specialize in the secure storage of your cryptocurrency holdings.
  5. Digital asset insurance companies provide insurance coverage for your digital assets.
  6. Blockchain-as-a-service providers offer outsourced solutions for blockchain development.

You might also consider acquiring shares in cryptocurrency funds. Exchange-traded funds (ETFs) with exposure to crypto or blockchain assets are accessible to most investors. Accredited investors may explore hedge funds or cryptocurrency investment trusts.

These crypto funds vary in their approach: some hold cryptocurrencies directly, while others invest in assets whose value correlates with cryptocurrency price movements. Furthermore, certain cryptocurrency investment funds focus on companies operating within the cryptocurrency industry.

Monitoring and Adjusting Your Portfolio

When it comes to managing your cryptocurrency assets, adhering to a few straightforward principles can yield substantial benefits. Firstly, prioritize the construction of a well-balanced portfolio. The allure of cryptocurrencies might tempt you to allocate all your capital to a single asset or engage in excessive leverage trading. However, the initial step toward prudent cryptocurrency management involves crafting a diversified portfolio. Diversification in cryptocurrency serves as a means to disperse risk, reducing the likelihood of impulsive, emotion-driven decisions.

Secondly, achieving diversify cryptocurrency portfolio sphere can be challenging due to the tendency of many assets to move in tandem. A relevant strategy involves allocating a significant portion of your portfolio to established coins such as Bitcoin. While this approach may not result in meteoric gains, it also diminishes the risk of substantial losses, particularly in bearish market conditions. 

Lastly, stay vigilant in monitoring your investments. When your capital is distributed across various assets and platforms, keeping tabs on performance can be challenging. Leveraging cryptocurrency portfolio management tools can assist you in tracking your investments, facilitating necessary adjustments when required.

Conclusion

In summary, you can align your investment decisions with your objectives and risk tolerance by dedicating time to gain a deep understanding of each cryptocurrency, including its underlying concepts and future innovations. Mastery of this knowledge enables you to grasp the potential risks and rewards associated with cryptocurrency investments. It’s important to bear in mind that the digital currency market is marked by uncertainty and influenced by numerous factors. Diversification can serve as a valuable strategy to mitigate these risks and pave the path for potential success.

FAQ

Is it good to have a diverse crypto portfolio?

Maintaining an undiversified portfolio poses a significant risk that crypto investors should not overlook. Such a portfolio is heavily reliant on one or two tokens, leaving it vulnerable to crashes in their prices. This underscores the importance of implementing a stop-loss mechanism, which serves as a safeguard against adverse market movements.

What is a good crypto portfolio allocation?

According to experts, the 60/40 portfolio presents a well-balanced blend of the two leading cryptocurrencies, Bitcoin and Ethereum. It affords investors an opportunity to participate in the crypto market’s stability and growth potential. This allocation is typically favored by cautious investors who aim for consistent returns while also seeking exposure to assets with greater risk.

What is diversification in crypto trading? 

Diversifying your cryptocurrency portfolio entails distributing your investments across various coins, tokens, or projects. Even if you opt to invest in renowned cryptocurrencies like Bitcoin and Ethereum, putting all your resources into a single cryptocurrency investment can still pose risks.

Why is crypto portfolio diversification important?

Diversification stands as a fundamental principle in the realms of trading and investment, substantially reducing the risk associated with a portfolio. Through the strategic diversification of your cryptocurrency portfolio and the regular rebalancing of assets, you enhance your chances of safeguarding your holdings and realizing profitable returns.

How can one maximize diversification in their crypto portfolio?

Achieve Diversification in Your Cryptocurrency Portfolio: Spread Across Various Cryptocurrencies. Incorporate Both Large-Cap and Small-Cap Cryptocurrencies. Acquire Different Types of Tokens. Diversify Across Different Sectors. Expand Across Global Geographies. Invest in a Range of Blockchain Protocols. Show Support for DeFi (Decentralized Finance) Projects. Invest in Blockchain Scaling Solutions.

Are there any risks associated with crypto portfolio diversification?

Although diversifying a cryptocurrency portfolio offers numerous advantages, it can also present certain potential drawbacks. One such concern is the risk of over-diversification, where holding an excessive number of cryptocurrencies may lead to suboptimal returns.

More on Crypto

The digital asset industry is more popular than ever, but it still has a lot of gas in the tank. Its current prevalence makes it accepted beyond the niche subsection of retail investors and cryptographic enthusiasts. Financial institutions are also dipping their feet into the digital asset waters, trying to capitalize on the ingenuity the assets bring to finance.

With the recent listing of Bitcoin ETFs by mammoth financial houses, the scope of investing in digital assets for institutional investors has opened up for the better. 

So, what’s changed the game for institutions? Previously, many were hesitant to jump into the digital asset world due to concerns about managing private keys securely, finding reliable custodians, and ensuring smooth transaction processing. 

Digital Assets are catching the attention of all kinds of institutional houses

With the true potential of this asset class far from reached, many investors are flocking to get some, or lots, knowing how their values can be appreciated enormously in the times to come. Assets like Bitcoin constantly show how they can multiply investments severalfold when timed correctly.

Beyond that, digital assets have proved to be great stores of value over longer durations, helping beat the corrosive effects of inflation on fiat currency. Worried about the short-term volatility of these assets, most institutional houses prefer to hold on to them for extended periods.

Family Offices Find Themselves Growing Closer to Digital Assets. 

And that has positioned family offices perfectly to jump into the digital asset landscape. Single- and multi-family offices working to preserve and grow the wealth of affluent, high-net-worth families have begun making digital assets a significant part of their overall investment portfolios, looking to tap into the burgeoning potential of blue-chip tokens and altcoins.  

Blockchain and Web3 implementations depict their ability to transform the tech and finance industries over the coming decades. Logically, family offices are turning to digital assets at the center of the transformation to set future generations up with this lucrative innovation. While these investment strategies look to become generational, family offices must make several considerations, including educating themselves about the asset class and implementing effective risk management strategies.

Choosing the ideal custodian is imperative for Family Offices

A stop-stop solution for Family Offices to maneuver their way into simplified digital asset investing and management is with digital asset custodians

Handling millions or billions of dollars in assets is no sweat for experienced custodians. They have an arsenal of solutions from wallet options like hot and cold wallets, Multi-Sig and MPC configurations compliance integrations, regulatory licenses, institutional-grade custody structures, succession planning tools, and more. But choosing the right one for your specific situation is crucial.

Family offices are best suited to choosing the services of third-party custodians for managing the digital assets in their portfolios. Self-storage solutions come with a steep learning curve and, more consequentially, the possibilities of irrecoverable asset loss if the private keys securing the assets are mishandled or lost. There is no recourse from that, possibly jeopardizing vast amounts of value.

So, relying on reputed custodians specializing in managing digital assets for clients interacting with massive volumes is the best bet for family offices. Their convenience and security make them the pragmatic option for anyone beyond the average retail digital asset investor who deals with less significant values.

What to Look for When Choosing a Custodian

While several custodians operate in the digital asset landscape, family offices must choose the right one for various reasons. Let’s examine what they must focus on and how it can make their interactions with the asset class seamless.

Secure Infrastructure

Dealing with digital assets revolves around secure infrastructure, especially when trusting third parties to manage them. After all, the amount of security breaches around private key handling leads to losses in the billions in the industry every year. Custodians possessing secure infrastructure and integrating best practices to store private keys and transfer data regarding user accounts are the ones to look for.

Identifying such custodians requires checking if they hold cybersecurity certifications, including SOC2 (Systems and Organizations Control 2) and CCSS (CryptoCurrency Security Certification) certificates, which they obtain upon intense scrutiny and audits by the issuing agencies. Simultaneously, custodians engaging in continuous bug bounties and penetration testing stay safe from emerging cybersecurity risks.

Insurance

One thing is sure in the digital asset realm – anyone can be a victim of exploits and hacks despite employing all kinds of cybersecurity protection. Cybercriminals can stay one step ahead of all preventive measures, waiting for the right time to attack. And that can lead to the theft of millions of dollars worth of assets from custodian platforms.

Insurance is the recourse for such inevitable situations, ensuring custodian clients regain lost value. It also helps clients access their value if custodians misuse the funds under management and indulge in corrupt, self-serving practices. Think of the FTX catastrophe that caused losses of user values amounting to multiple billions.

Moreover, insurance providers are very strict about the platforms they insure, doing thorough due diligence before taking custodians on board. So, insured platforms are more trustworthy than those that are not.

Regulation-Oriented

Opting for custodians that focus on regulations is a must. Several jurisdictions have rolled out their digital asset regulations, with many more in the process of doing the same. Those in regulated jurisdictions must possess licenses from regulators overseeing their national crypto ecosystems. Others in countries yet to release relevant frameworks are still answerable to financial regulators.

Ergo, choosing licensed custodians, or those following digital asset and other financial regulations in areas without specific regulations, can save family offices many headaches stemming from non-compliance. They often manifest as having the assets entrusted to the custodians frozen or seized by authorities.

Good Track Record

Family offices must stick to well-established custodians favored by institutions and enterprises in the digital asset landscape. Looking for those operating in the industry with extensive and familiar clientele for considerable periods offers the social assurance that family offices need.

Such custodians have earned their reputations by servicing their clients aptly and focusing on their specific needs, making them better options to manage crypto funds. However, that is not to say that family offices should not consider newer custodian solutions.

Looking for ones that follow all best practices, offer avant-garde features, and work towards building trust in the ecosystem can be highly beneficial. Liminal is a custodian making strides in the digital asset management vertical, providing feature-packed solutions with bank-grade security to family offices. It has also received licenses to operate in multiple jurisdictions thanks to its emphasis on a regulation-first approach.

Comprehensive Reach

The digital asset landscape is evolving rapidly, with new tokens that power highly innovative use cases emerging constantly. Simultaneously, several dApps, including DeFi protocols and DAOs, are scattered across various blockchains, proven to offer high-level yields and profit-generation measures.

Engaging with custodians supporting multichain capabilities and allowing family offices to interact with various digital assets and protocols from various chains is necessary. Moreover, they must offer convenient and intuitive workflows on their platforms for their clients to buy, trade, sell, and utilize digital assets and Web3 applications.

Sensible Pricing

A good custody solution does not equate to being expensive. Several custodians offer economical pricing tailored to the needs and usage of family offices rather than rigid, one-size-fits-all plans. Delegating the custodianship of digital assets to such solutions can keep the billables inexpensive while still providing access to a broad range of features and high-quality service.

Conclusion

Digital assets are bleeding into the portfolios of family offices thanks to their capacity to preserve value, build wealth, and complement traditional investment vehicles as an emerging, speculative asset class. While family offices are accepting it wholeheartedly and geared towards indulging in risky assets, top digital assets’ value retention and inflation-beating capabilities set the asset class up for increased adoption.

Of course, dealing with these assets at any point in time requires family offices to be equipped appropriately. It includes choosing the proper digital asset custodian. Partnering with the right one can make all the difference while treading this novel landscape, allowing family offices to hold and generate value from all facets safely.

February 29, 2024

Digital Asset markets have taken a giant leap ever since their categorization from purely being a volatile alternate investment asset to now being a robust and regulated asset class. 

The journey of digital assets, most significantly that of blue-chip tokens like Bitcoin and Ethereum, has been nothing short of a protagonist in the fight against traditional financial systems, investment avenues, and age-old yield mechanisms. 

However, it was only after the introduction of regulation for these digital assets that they garnered huge institutional interest, pushing the scale of adoption and inviting the likes of family offices to partake in the “coming of age” story of investing in digital assets. 

In the underlying characterization of digital assets as the next best portfolio addition for institutional investors, with a significant boost kicking in after the launch of Bitcoin ETFs(with Ethereum ETFs also on their way), there are still reservations as to how to go about tackling the security, custody, and management challenges that come with them. 

To discuss how current market conditions are driving family offices to embrace portfolio diversification strategies that include allocating funds to digital assets, we dive deep into the intricacies of digital asset custody

Challenges In Secure Digital Asset Investing For Family Offices 

Family offices, traditionally known for their conservative investing approach, sit in the middle of the institutional investors’ branch, bringing untapped liquidity into the market. Conventionally, family offices used to rely only on safer investment bets to accrue value for their investments, but now they are increasingly dipping their toes into the dynamic world of digital assets. 

Despite the potential for high returns, family offices have historically faced significant challenges when considering digital assets as an investment class. Factors such as market volatility, regulatory uncertainty, and the need for established custody solutions have deterred many from fully embracing digital assets.

Talking about the key hurdles family offices face in navigating this exciting but complex landscape, here are some top-of-the-line challenges for them:

  1. Security Concerns: The nascent nature of digital assets presents unique security risks. Hacking, scams, and volatile markets can threaten portfolio stability. Family offices need robust custody solutions, advanced cybersecurity measures, and comprehensive risk management strategies to mitigate these threats.
  2. Regulatory Uncertainty: The regulatory landscape surrounding digital assets is still evolving, creating uncertainty and compliance hurdles. Family offices must stay updated on changing regulations and navigate complex compliance requirements across jurisdictions.
  3. Limited Expertise: Building internal expertise in digital assets can be time-consuming and expensive. Family offices often need more in-house knowledge and resources to properly evaluate, manage, and secure their digital asset investments.
  4. Lack of Infrastructure: Integrating digital assets into existing portfolio management systems can take time and effort. Family offices need secure and reliable infrastructure to seamlessly store, manage, track, and report on their digital asset holdings.
  5. Complex Valuation: Accurately valuing digital assets can be difficult due to their volatility and lack of standardized methodologies. Family offices need robust valuation frameworks and access to reliable market data to make informed investment decisions.

Enabling Family Offices to overcome challenges in digital asset custody

The promise of digital assets is undeniable, yet the hurdles for family offices can seem daunting. 

Overcoming the challenges mentioned above and finding the best probable solutions for them becomes a hardcore reality that must be dealt with utmost precision. 

At Liminal, we work extensively with institutions looking to go one step beyond simply investing in digital assets and look to operate them securely under all circumstances. The same logic applies to family offices as well. 

In our pursuit of building such a robust infrastructure solution, tailored to address the challenges faced by family offices fully and to empower them in their journey to moving to a new asset class for investment, we have created a comprehensive custody solution, integrated best-in-class security protocols and provide real-time monitoring and risk management services to proactively identify and mitigate potential threats, giving family offices peace of mind knowing their assets are secure.

  1. Security Concerns:

Fortress-grade custody: We leverage multi-sig and MPC wallets, leading asset-to-insurance ratios, and bank-grade security protocols to ensure the safety of your assets. Our CCSS Level-3 certification and FIPS-compliant hardware devices go the extra mile, minimizing security risks and providing unmatched peace of mind.

Advanced Cybersecurity Measures: Our vigilant team constantly employs 24/7 SOC monitoring, strict access controls, and penetration testing to identify and mitigate potential threats.

Comprehensive Risk Management: Our experts help you create and implement tailored risk management strategies, considering internal vulnerabilities, market fluctuations, and evolving threats.

  1. Regulatory Uncertainty:

Staying Ahead of the Curve: We have a dedicated team of compliance experts who stay abreast of evolving regulations worldwide. We integrate crucial compliance monitoring in our solutions such as KYC/KYB, AML, and Travel Rule checks, to help navigate complexities across jurisdictions and proactively adapt our services to ensure your portfolio remains compliant.

Streamlined Reporting: Our platform generates comprehensive compliance reports automatically, saving you time and resources while ensuring transparency and regulatory adherence.

Regulatory Partnerships: We actively engage with regulatory bodies and industry leaders 

to become accredited custodians. Currently, we hold a TCSP license in Hong Kong and have also received an IPA from ADGM for an FSP license for our Abu Dhabi entity. 

  1. Limited Expertise:

Your Digital Asset Knowledge Hub: Our team of seasoned custody, compliance, wallet, and security professionals offers expert guidance on evaluating, managing, and securing your digital asset investments. We share industry insights, educational resources, and ongoing support to enhance your knowledge base.

Dedicated Account Management: A dedicated account manager serves as your point of contact, providing personalized guidance and support tailored to your specific needs and goals.

Extensive Resource Library: Access easy onboarding docs, a curated developer section, seamless user-guiding workflow, and trending topic discussions through webinars, research whitepapers, and market reports to build your understanding of digital assets and make informed investment decisions.

  1. Lack of Infrastructure:

Seamless Integration: Our API library, Liminal Express, seamlessly integrates with your existing portfolio management systems, creating a smooth and efficient workflow for managing your digital assets.

Secure Storage and Management: We provide institutional-grade hot and cold wallets for self and managed custody infrastructure, eliminating the need to build or manage complex systems.

Automated Workflows: Streamline recurring tasks and automate key processes with our automation engine, with powerful functionalities like smart refill wallet, smart consolidation, and auto-sweep, enhancing efficiency and reducing operational burdens.

  1. Complex Valuation:

Reliable Data and Valuation Tools: We offer access to trusted market data providers and valuation tools tailored for digital assets, enabling you to make informed investment decisions based on accurate assessments.

Insurance-as-a-Service: We have collaborated with Costero brokers to provide the best possible insurance to our clients that covers their entire portfolio at the best market price. 

Asset segregation and transparency: We deploy segregated accounts, succession planning, and no rehypothecation of assets to allow family offices to maximize transparency and access. 

Embracing the Future Of Family Office Investing 

The future of wealth management includes digital assets. Family offices are actively exploring this burgeoning space, recognizing the potential for diversification and growth. Liminal Custody stands as your trusted partner in this journey. As a regulated custodian, we offer best-in-class security, industry-leading compliance solutions, and a dedicated team of experts, empowering you to invest in digital assets confidently.

Let Liminal Custody guide you through the process, making the path towards secure and compliant digital asset investment smooth and efficient. Contact us today and explore the new frontier of wealth management

Remember, while the potential is promising, navigating the digital asset landscape requires careful planning and collaboration with trusted partners. Liminal Custody is here to equip you with the knowledge and resources to succeed.

February 23, 2024

As we continue constructing a fully regulated digital asset custody platform, ensuring secure storage for both crypto and fiat assets remains a critical priority. 

To facilitate the last checkpoint of enabling institutions to convert their digital asset treasury into fiat currency, we’re expanding beyond pure wallet infrastructure and integrating seamless fiat off-ramp capabilities for our partners.

We’re thrilled to announce our partnership with Encryptus, licensed and compliant off-ramp solutions tailored for institutional clients. This collaboration elevates Liminal’s service offerings by empowering our partners to convert their digital asset treasuries into fiat currencies efficiently.

Integrating A Seamless Off-Ramp Solution

The digital asset ecosystem historically faced friction points when transitioning between fiat and cryptocurrencies. Off-ramp solutions address this pain point by enabling efficient and streamlined conversion between asset classes, minimising value loss and simplifying compliance processes.

Here’s how off-ramp changes the game:

  • Reduced Friction: Frictionless conversion minimises delays and operational complexities associated with traditional fiat-crypto exchange methods.
  • Enhanced Efficiency: Streamlined workflows expedite asset conversion, increasing speed and cost-effectiveness for institutional and individual users.
  • Optimised Value Preservation: Advanced off-ramp solutions prioritise minimising price slippage and value loss during conversion, protecting user portfolios.
  • Simplified Compliance: Integrated compliance features navigate regulatory complexities, ensuring adherence to relevant financial regulations.

With our partnership with Encryptus, we have embedded their institutional-grade APIs, connecting their off-ramp solution within Liminal’s wallet and custody platform. 

This integration simplifies our clients’ liquidation requirements while keeping their assets secure and more:

  • Effortless Digital Asset to Fiat Conversion: Our partners will be able to access treasury management and facilitate business payments in 54 countries and individual payments in an extensive network of 80+ countries.
  • Streamlined Compliance and Regulation: Our partners will be able to leverage Encryptus’s rigorous licensing and compliance framework, ensuring adherence to stringent financial regulations.
  • Enhanced Platform Value: We will be able to expand the functionality of the Liminal custody solution, attracting institutional users seeking comprehensive digital asset management capabilities.

Moving Towards A Robust Off-Ramp Partnership With Encryptus

The partnership between Liminal and Encryptus earmarks a significant step forward in secure digital asset custody, representing a shared commitment to pushing compliant practices while supplying institutions with easy access to convert their digital assets to fiat. 

For Encryptus, the opportunity to integrate with Liminal’s established platform presents a chance to reach a wider audience and scale their innovative off-ramp solutions to new heights. By streamlining fiat conversion within Liminal’s secure custody infrastructure, Encryptus gains access to a trusted network of institutional users seeking seamless and compliant treasury management.

For Liminal, this collaboration reinforces our dedication to partnering with companies that demonstrably prioritise clear governance and robust policy frameworks. By aligning with Encryptus’s stringent compliance standards, we reaffirm our commitment to building a secure and sustainable future for digital assets, where trust and regulatory certainty go hand-in-hand.

January 22, 2024

Find Out How You Can Benefit From A Fully Self-Custodial Wallet Architecture