The new generation of digitally-savvy investors, who will be responsible for the wealth transfer in the next decade, are likely to increase their wealth by investing in the growing digital assets space, the chairman of open-source blockchain platform Tezos Foundation said.
The shift of wealth from family offices to the younger generation would happen in the next five to 10 years, and these people – those aged 20 to 30 – are not expected to invest in gold or other traditional assets, opting for cryptocurrencies because of their familiarity with the digital dynamics involved and having grown up in the age of the internet, Hubertus Thonhauser said.
"We are seeing a generational shift: for millennials who were not able to participate in the upswing of equity markets that were available for older generations, cryptocurrencies are the only real upside they have in the wealth generation and wealth shift we are seeing right now," Mr Thonhauser told The National in an interview on the sidelines of the TiE Global Summit at Expo 2020 Dubai Exhibition Centre.
The cryptocurrency market continues to maintain its strength, expanding in popularity as it gains more acceptance among investors and with more players entering the sector, which creates competition.
As of Thursday, cryptocurrencies' market capitalisation is more than $2.268 trillion, according to CoinMarketCap. Bitcoin and Ethereum continue to be the largest, enjoying market shares of 40.6 per cent and 21.4 per cent, respectively.
Bitcoin, the world's first and most popular cryptocurrency, was trading at $48,621.83 on Thursday evening, up almost 3 per cent in the past 24 hours, CoinMarketCap data showed. It hit a record high on November 9, blowing past $68,000, but has since lost a third of its value.
Cryptocurrency advocates are pushing for mainstream adoption, which Mr Thonhauser believes will happen within a decade, perhaps as soon as a "couple of years".
Although digital assets are still in their "very early stages", it might not take decades for mainstream adoption, Changpeng Zhao, chief executive of the world's largest cryptocurrency exchange, Binance, told The National in October. However, the implementation of full-fledged regulatory frameworks for digital assets could take decades to realise.
"Decades are way too long. It underestimates the fact that this is a technology that grows with network effects and grows exponentially," Mr Thonhauser said.
Both, though, agree that the rapid pace of adoption will accelerate the process.
"We are seeing more adoption because of use cases and price action, as more people are involved and get comfortable with using digital assets as an investment vehicle," Mr Thonhauser said.
Cryptocurrencies' volatility – Bitcoin's, most notoriously – is turning off potential investors, but this can be addressed by spreading its allocation and transparency, he said.
"One issue with Bitcoin is that you still have a pretty large number of individual holders that basically control the overall supply; 70 per cent of all Bitcoin are treasuries held by a very small number of people or institutions," Mr Thonhauser said.
"Second, we need more transparency, numerous tools and transparent information of on-chain analytics of Bitcoin, so you can really see and anticipate its movements."
On central bank digital currencies (CBDCs), Mr Thonhauser said more of a political will is needed than a technological will to provide the technology that offers more transparency. In theory, enforcing this could also leapfrog traditional banks.
CBDCs are digital versions of fiat currencies. China was the first to implement a "digital yuan", with other major economies such as the EU also progressing with the development of their own versions.
"If you want to send payments to citizens, instead of printing money, giving it to banks and channelling it down to end consumers, with CBDCs you can push it down directly to the wallet of the end users," he said, alluding to removing middlemen that are slowing down the services in the financial industry.
With interest rates near zero or negative, gold trading sideways and stock market shares highly valued, he says that cryptocurrencies are a safe bet, despite the volatility, which is normal for an asset class.
Cryptocurrencies are the only digital asset in the market that is really gaining institutional acceptance with exchange-traded funds. You shouldn't be worried about fluctuations that happen on a month-to-month basis because it's a long-term asset
Hubertus Thonhauser,
chairman of the Tezos Foundation
"Cryptocurrencies are the only digital asset in the market that is really gaining institutional acceptance with exchange-traded funds. You shouldn't be worried about fluctuations that happen on a month-to-month basis because it's a long-term asset," Mr Thonhauser said.
The first Bitcoin ETF in the US, ProShares, began trading on the Chicago Mercantile Exchange in October. Some financial analysts believe this is going to be a big deal that will drive its price higher by giving institutional investors the confidence and security to invest in Bitcoin.
He also cautioned against allocating a huge part of portfolios to digital assets, advising investors to define a threshold that is in proportion with their other assets.
"Also, don't listen to all the YouTube hype videos telling you what to buy. Very often, the good coins are those that aren't hyped; they're sleeping giants and these are the ones you should probably consider."
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
10 tips for entry-level job seekers
- Have an up-to-date, professional LinkedIn profile. If you don’t have a LinkedIn account, set one up today. Avoid poor-quality profile pictures with distracting backgrounds. Include a professional summary and begin to grow your network.
- Keep track of the job trends in your sector through the news. Apply for job alerts at your dream organisations and the types of jobs you want – LinkedIn uses AI to share similar relevant jobs based on your selections.
- Double check that you’ve highlighted relevant skills on your resume and LinkedIn profile.
- For most entry-level jobs, your resume will first be filtered by an applicant tracking system for keywords. Look closely at the description of the job you are applying for and mirror the language as much as possible (while being honest and accurate about your skills and experience).
- Keep your CV professional and in a simple format – make sure you tailor your cover letter and application to the company and role.
- Go online and look for details on job specifications for your target position. Make a list of skills required and set yourself some learning goals to tick off all the necessary skills one by one.
- Don’t be afraid to reach outside your immediate friends and family to other acquaintances and let them know you are looking for new opportunities.
- Make sure you’ve set your LinkedIn profile to signal that you are “open to opportunities”. Also be sure to use LinkedIn to search for people who are still actively hiring by searching for those that have the headline “I’m hiring” or “We’re hiring” in their profile.
- Prepare for online interviews using mock interview tools. Even before landing interviews, it can be useful to start practising.
- Be professional and patient. Always be professional with whoever you are interacting with throughout your search process, this will be remembered. You need to be patient, dedicated and not give up on your search. Candidates need to make sure they are following up appropriately for roles they have applied.
Arda Atalay, head of Mena private sector at LinkedIn Talent Solutions, Rudy Bier, managing partner of Kinetic Business Solutions and Ben Kinerman Daltrey, co-founder of KinFitz
UAE currency: the story behind the money in your pockets
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
THE BIO
Favourite holiday destination: Whenever I have any free time I always go back to see my family in Caltra, Galway, it’s the only place I can properly relax.
Favourite film: The Way, starring Martin Sheen. It’s about the Camino de Santiago walk from France to Spain.
Personal motto: If something’s meant for you it won’t pass you by.
Sri Lanka-India Test series schedule
- 1st Test India won by 304 runs at Galle
- 2nd Test Thursday-Monday at Colombo
- 3rd Test August 12-16 at Pallekele
The%20specs%20
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E2.0-litre%204cyl%20turbo%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E261hp%20at%205%2C500rpm%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E400Nm%20at%201%2C750-4%2C000rpm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3E7-speed%20dual-clutch%20auto%0D%3Cbr%3E%3Cstrong%3EFuel%20consumption%3A%20%3C%2Fstrong%3E10.5L%2F100km%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ENow%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh129%2C999%20(VX%20Luxury)%3B%20from%20Dh149%2C999%20(VX%20Black%20Gold)%3C%2Fp%3E%0A
The Rub of Time: Bellow, Nabokov, Hitchens, Travolta, Trump and Other Pieces 1986-2016
Martin Amis,
Jonathan Cape
Company profile
Name: Dukkantek
Started: January 2021
Founders: Sanad Yaghi, Ali Al Sayegh and Shadi Joulani
Based: UAE
Number of employees: 140
Sector: B2B Vertical SaaS(software as a service)
Investment: $5.2 million
Funding stage: Seed round
Investors: Global Founders Capital, Colle Capital Partners, Wamda Capital, Plug and Play, Comma Capital, Nowais Capital, Annex Investments and AMK Investment Office
Islamophobia definition
A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.
Timeline
1947
Ferrari’s road-car company is formed and its first badged car, the 125 S, rolls off the assembly line
1962
250 GTO is unveiled
1969
Fiat becomes a Ferrari shareholder, acquiring 50 per cent of the company
1972
The Fiorano circuit, Ferrari’s racetrack for development and testing, opens
1976
First automatic Ferrari, the 400 Automatic, is made
1987
F40 launched
1988
Enzo Ferrari dies; Fiat expands its stake in the company to 90 per cent
2002
The Enzo model is announced
2010
Ferrari World opens in Abu Dhabi
2011
First four-wheel drive Ferrari, the FF, is unveiled
2013
LaFerrari, the first Ferrari hybrid, arrives
2014
Fiat Chrysler announces the split of Ferrari from the parent company
2015
Ferrari launches on Wall Street
2017
812 Superfast unveiled; Ferrari celebrates its 70th anniversary
