These rules have been imported from the traditional financial world, signifying that the crypto space is undergoing a mat-uration process – and a purging of its more ‘Wild West’ ele-ments. Additionally, regulations are expected to be adopted from the conventional economic system, further bridging the crypto ecosystem with reliable accounting practices.

New initiatives will emerge, focusing on transparency and mandating regular reporting and auditing of reserves, assets, and liabilities across major crypto entities, including exchanges, brokers, lenders, custodians, and stable coin issuers. We see a clear parallel with the dot.com boom, where the tech industry emerged stronger and more stable.

These services are designed to offer a level of safety and convenience to investors who want to gain exposure to cryp-tocurrencies and benefit from diversification, and potential returns, without the complexities of self-custody.

This immaturity and the introduction of novel risks emphasise the pressing need for experienced oversight once more. Funds of hedge funds, equipped with traditional operational due diligence capabilities, can play a vital role in this evolving industry. They not only detect warning signs but also adapt their diligence assessments to address the unique risks in the crypto space, ultimately providing invaluable protection to investors seeking to harness the considerable potential of crypto’s extreme alpha.

And confronted with attempts to regulate or suppress it, Bitcoin tends to garner even more support and adoption, showcasing its resilient characteristics. Additionally, Bitcoin’s limited supply of 21 million coins creates scarcity, driving demand, especially during economic uncertainty or inflation. Its role as a store of value, similar to gold, further strengthens its anti-fragile qualities, as it is not subject to the same vulner-abilities as traditional fiat currencies.

Meanwhile, Bitcoin’s network security, maintained through a proof-of-work consensus and increased mining activity in response to threats, adds to its anti-fragility. With a global user base and a borderless design, Bitcoin also remains less susceptible to localised economic or political events – and has emerged stronger in the face of negative crypto head-lines, such as the FTX debacle.

This new-found financial access can empower individuals and commu-nities, reducing poverty and fostering economic stability. Africa stands out as an enthusiastic adopter. According to Chainalysis, Nigeria ranks as the world’s second-largest market for digital assets in terms of grassroots adoption, with other African countries, including Kenya, Ghana, and South Africa, also displaying high levels of uptake. 

For these nations, cryptocurrencies serve as a solution to many financial challenges in the region - including high transaction fees for cross-border payments, limited access to traditional banking, and the ability to preserve wealth amidst fluctuating national currencies.

While some economists view it as a ground-breaking inno-vation, others remain sceptical about its long-term impact and stability. Nonetheless, Bitcoin’s existence and growing influence have undeniably introduced new dimensions to economics and finance.

We believe it is a mistake to write off digital assets. This evolving asset class will eventually benefit from global adop-tion and institutional guardrails. We believe the painful FTX collapse may, in hindsight, be viewed as a necessary evil.