Why Asset Managers Support Rebus

September 23, 2022
Why Asset Managers Support Rebus

Simply put, investors are demanding that their Asset Managers (AMs) diversify into decentralized finance (DeFi) instruments. Asset managers are the backbone of the traditional finance (TradFi) investor market. They provide expertise and reassurance to those with investment funds but limited time. With trillions of dollars under management worldwide, their investment trends are felt globally. This is why Rebus has chosen such financial partners to lead the charge in taking DeFi to TradFi markets.

Why are Asset Managers important to Rebus?

The Rebus mission is to take DeFi to TradFi investors. So, what is the key to reaching such a group? As we’ve written about before, through their trusted advisors and Asset Managers, they are making investment suggestions and decisions. That’s what is unique and exciting about Rebus. Most DeFi investors are accustomed to investing in simpler, direct models wherein more hype and action within the tiny but mighty DeFi retail space increases the asset’s price, with long-term utility being a distant and secondary focus, if at all. In the case of Rebus, growth from our community of Cosmonauts is undoubtedly there, but the major growth opportunity exists among a strong network of financial partners that will greatly increase the overall demand for DeFi assets and will facilitate the maturity of DeFi. The Rebus Platform provides a path to satisfy that demand, increasing the value of $REBUS with each transaction. How much demand? We’re talking about a ~5X increase in the addressable market by creating a simple path for our Tradfi investor brethren to take, and that’s just to start.

But, I’m invested without an AM. Why do I care?

You’re going to make more money too. The Rebus Platform is open to other DeFi projects to be traded through AMs, starting with but not limited to projects in the Cosmos Ecosystem. This means that projects supporting Rebus will also benefit from the increase in the addressable market. As an investor in those projects, the price of your assets will increase. In addition to the rise in demand, putting DeFi instruments into the hands of AMs also initiates a new wave of innovative investment products.

Think of investment products, or instruments, as ways to leverage existing assets for other opportunities. Think of being able to leverage $JUNO or $ATOM like any other asset: borrowing, lending, fundraising, and more. Once such instruments hit the market, we, the early adopters and crypto-faithful, will have even more opportunities to utilize what we’re holding for additional gain beyond buying and selling tokens.

How Asset Managers Benefit From Rebus

In short, they can finally satisfy the demand coming from their clients. Our Financial Partners vary slightly in focus, but all are tasked with protecting and growing the monies entrusted to them by their clients–whether that be major funds taking innovative notes from advisory partners or individual investors trusting their retirement and family wealth accumulation to asset managers. Being a part of Rebus means being able to sell what their clients are demanding.

In addition to satisfying existing demand, there’s a competitive angle to consider. Today, some investors have already taken money away from their trusted relationships so that they can put it into various DeFi investments. They still come back to their AMs with questions and expressions of frustration with the time and difficulty in doing so. Generally, the chance of losing a customer to another asset manager is relatively low unless you’re simply not performing. But all things equal, people will stick with those they trust and avoid spending time vetting and onboarding a new relationship. But, with such a clear demand to diversify into DeFi instruments, investors are looking for those that can answer the call. By being onboard at the beginning, our partners are taking advantage of a rare market occurrence (new, emerging asset class) that will create an opportunity to acquire many new clients.

Why are TradFi investors rooting for Rebus?

First, we believe everyone should have access to DeFi, the most trustworthy way to transact goods and services humans have created to date. Second, they finally see a path to getting what they want. Trust, time, and performance are the key deciding factors in the financial industry when selecting whom to invest with. Let’s assume that all AMs are equally trusted and save their clients an equitable amount of time. The difference now is that an emerging asset class is simply inaccessible. This has many TradFi investors looking to add the performance of this emerging space to their portfolios but are left wanting.

If the markets were steady, it might be less urgent. But the last few years have not been without challenges, and all predictions have us looking at further hardship, no matter what we’re looking at: stocks, bonds, indexes, etc. They’re all down. No one is performing. People are looking for alternative investments, and Rebus is a shining beacon of hope.

The Rebus Platform allows investors to retain their existing relationships, their current time spent working and enjoying the fruits of their labor while gaining access to a space that would not have supported either of those criteria by doing it alone. DeFi moves quickly. Every day, there’s an airdrop, a new announcement, a new partnership, etc. How are individuals supposed to keep up? How are they supposed to keep up and filter out the dead-end investments fuelled by hype rather than actual value and utility? It’s hard, but no longer. The TradFi investor will move from the sidelines and into the mix of this emerging asset class with the support of the expertise and trust provided by their Asset Managers.

Rebus Adoption — The Numbers

Currently, our partners manage ~6 Billion Euros worth of various assets. The current wisdom is that everyone should diversify 5–15% of their portfolio into DeFI, depending upon their appetite for risk and investment goals. We already see such major moves from all of the leading global financial institutions as they prepare for the inevitable entry of DeFi into TradFi spaces.

Globally, individual DeFi investors account for less than 15% of the workforce. TradFi investors account for roughly 40–55%, depending on the country. When we include the impact from institutional investors designing pension funds with diversification into DeFi, the market cap increase potential is surreal. That’s the addressable market increase that Rebus will unlock for all Rebus Project Partners, Financial Partners, and Investors. All boats rise with the tide of the Rebus Platform.

“If you told me I could sell this product to my customers today, I’d make it a new mandatory part of their portfolio tomorrow.”
- EY Business Development Leader

For the curious, here are some of the key considerations we took into account when creating Rebus and why it seemed to be the right time:

  1. Room to grow. The crypto market cap ($1 Trillion). Even with a large volume of projects in the ecosystem, the market is still in its infancy with room to grow. Once joined with TradFi, the market is expected to pull shares from other investments. CNBC estimates that nearly 80% (~64 T) of the stock market funds are in market index funds and ETFs. A 1–15% crypto diversification across the board for such funds is not out of the question, and could see this market cap grow dramatically over the next 1–5 years.
  2. Performance talks. In the US, retirement funds (401ks and IRAs) are 75% stocks, and have lost nearly $3T since the beginning of 2021. In the face of hardship, investors are looking for alternative opportunities, and crypto, despite some major hiccups, continues to be that alternative. Massive investment firms such as Goldman Sachs and JPMorgan are opening their doors to Bitcoin funds and ETFs. This is a sign that a massive adoption is not far off.
  3. Market and asset maturity. As these two seemingly opposing worlds join together, TradFi investors will expect financial products they’re currently familiar with, such as derivatives, ETFs, lending, and insurance, more utility. The technology exists to make this happen, and the Rebus Platform provides the final regulatory piece to make it a reality.

We would like to thank everyone currently active in the Rebus community! Our goal is to satisfy the increasing demands from TradFi investors, currently sidelined by complexity, trust, and time by building a bridge between TradFi and DeFi. We can’t wait to continue on this journey with you.

I hope we’ve clarified how essential Asset Managers are to Rebus and, ultimately, to the future of crypto as a whole. With our airdrop live and public coin distribution just around the corner, there couldn’t be a more exciting time for the Cosmos and DeFi communities. This is going to be a wild ride.

-The Rebus Team

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