Madigan, while speaking to the US media outlet Barron’s, has justified the reason for XRP to generate huge returns in the long-term and the need to invest in Bitcoin. She has also spoken about the investment strategy, which she believes, will offer maximum returns to investors.
Madigan also suggested new investors to seriously gain in-depth knowledge about a few cryptos before investing. They should look at the option of gaining knowledge about the use of cryptos and the characteristics that provide core value. Furthermore, they would study the issues which can be resolved by the cryptos and the market it addresses. She underlined that Ripple’s XRP resolves a real-world issue:
“For example, in payments because of trapped capital, there’s trillions and trillions of dollars of market opportunity that XRP as a digital asset is solving for. So that’s a huge addressable market. So there you would see a driver for value creation.”
Bitcoin is also transforming into a big value storage market, in which gold reins currently. She said:
“For Bitcoin, look at the market cap of gold and look at the market cap of Bitcoin. There’s still tons of room, but will there be volatility between here and when we see a top for Bitcoin? Absolutely.”
Bitcoin’s market cap is currently around $353 billion, but pales in front of gold, which has a market cap of $9 trillion, 25x greater than the king of crypto.
The Ripple chief highlighted the latest surge in appeal of cryptos to institutional investors, stating that it is a positive sign for the sector. Nevertheless, it will not hinder the volatility, which is the main characteristic of cryptocurrency markets, she informed the media release.
– #XRP is solving a real problem
– We are in a super early stage while it’s promising to see huge institutional investors and large fortune 500 companies putting their treasury into cryptos
Breanne Madigan, Ripple
December 3, 2020 pic.twitter.com/PJ5VnH9TyZ— Steven Bull Diep (@DiepSanh) December 3, 2020
Madigan became a member of Ripple in May 2019, stepping down from her position as head of institutional investors division at Blockchain.com. Before becoming a member of the crypto world, she played a part as the chief of institutional wealth services at Goldman Sachs.
With respect to crypto investments, Madigan suggested barbell technique. The method involves purchasing highly risky assets and small quantity of assets with little risk and staying away from assets which are categorized as intermediate-risk. Investors should park 50% of their surplus funds in long-assets that offer term value, for instance in certain crypto ventures that offer some promise. The other 50% should be set aside for “three or five crypto assets that you understand the value proposition and the problem they are solving.”
“Because ultimately as you figure out that addressable market, you can back into the reasonable valuation. And as I said in my example earlier, taking just a 3% exposure to the asset class should result in at least a 15% outperformance versus a traditionally managed portfolio that’s non-crypto.”