As financial planners and investors, we are always looking for emerging asset classes which can provide diversification and improve a portfolio’s risk-adjusted performance. One asset class which can no longer be ignored are cryptocurrencies – as prolific valuations in recent years have been accompanied by a surge in institutional interest and trade volume.

Back in 2014, when we first covered cryptocurrencies, Bitcoin was building momentum and the blockchain technology which powers these currencies was still in its infancy. Fast forward three short years and you will now find a $100 billion asset class with over 900 distinct cryptocurrencies changing hands daily.

Data from CoinMarketCap, accessed on 6/30/17

Bitcoin remains king and with a market capitalization of nearly $42 billion, Bitcoin is now a larger asset (as measured by market cap) than roughly 60% of companies which make up the S&P 500 index. Major retailors have gotten onboard from a transactional perspective, with, DISH Network, Microsoft and Shopify all accepting costumer payments using Bitcoin. What was once a developing alternative currency has gone mainstream, and individual investors, fund managers, advisors, and insitituional traders are taking notice.