WisdomTree Seeks To Spur Finance’s ‘Internet Moment’

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  • WisdomTree envisions its mobile app to be an alternative to JPMorgan or Charles Schwab accounts
  • Asset manager aims to continue building diversified crypto products for institutional investors in Europe

As WisdomTree gets set to launch a mobile app allowing users to hold tokenized assets, the company’s product head for digital assets said such an offering could serve as a catalyst for the finance sector to have its “internet moment.”

Jason Guthrie, who worked at Macquarie Group and Deutsche Bank before joining WisdomTree in 2017, told Blockworks during the Permissionless event in Palm Beach last week that financial services companies have not yet dramatically changed their business models amid digitalization in the space.

“I don’t think financial services had its internet moment,” he said. “It’s not like it’s Facebook disturbing advertising or Netflix disturbing television. These were huge disruptive, revelatory uses of that technology, and finance hasn’t got it.”

Called WisdomTree Prime, the company’s upcoming offering — first announced in January — seeks to provide a traditional finance experience built on decentralized finance principles. The asset manager is looking to move the app into beta testing at the end of this quarter and roll it out nationally later this year. 

The app will initially allow users to transfer tokenized assets such as dollars, gold, Treasurys, bitcoin and ether, Guthrie revealed. It then seeks to bring fixed income and equities by the second quarter of next year. 

Transferring value through these assets would be nearly instant. The app would also offer customer support, such as private key recovery.

“We want to add these experiences that make [digital assets] usable in the real world,” he said.

The estimated 200 million people involved in crypto today will continue to drive innovation in the space, Guthrie added, but usability has been a barrier to entry for the larger market.

“I care about the two billion people that are going to come on next,” he said. “How can we get them to pick a service like WisdomTree Prime instead of their JPMorgan or Schwab brokerage account?”

Diversification will be key

WisdomTree is also seeking to continue building diversified crypto products for institutional investors in Europe. The company launched Solana, Cardano and Polkadot ETPs on various European exchanges in March.

Institutional adoption, while slow, has “a huge amount of potential,” Guthrie said, as many family offices, hedge funds, asset managers, private banks, pensions and endowments engage with the company about the space.      

“The biggest problem for institutional adoption is that those institutions need to be able to adequately explain what they’re putting the client money into,” Guthrie explained. “So you’re educating them on how to educate clients.”

Guthrie noted the parallels between crypto adoption and the adoption of ETFs about 15 years ago. The ETF wrapper was something institutions had to learn about and come to grips with as clients were already comfortable with mutual funds. 

“It’s the same thing here,” he said. “We’ve got this brand new way of doing things — this time it’s an asset class — but you can see they’re trying to get their internal processes comfortable with how they will communicate it with clients.”

In terms of new products, WisdomTree is focused on three segments: DeFi, the metaverse and layer-1s that compete with Ethereum. It is also actively working on how to fuse innovations within the space into the products, such as passing along staking yields to investors. 

“We all know diversification is the only free lunch in investing,” Guthrie said. “Those that can bring a thoughtful and risk-managed approach to that are going to be the ultimate winners, and that’s what we’re trying to do.”

As for non-diversified products, WisdomTree is also one of many asset managers that has filed for a spot bitcoin ETF. The company amended its application for the fund in December — a week after the SEC rejected its proposal — and expects a decision in the coming months. 

Guthrie said he does not expect the agency to approve a spot bitcoin ETF this year.

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  • Ben Strack

    Ben Strack is a Denver-based reporter covering macro and crypto-native funds, financial advisors, structured products, and the integration of digital assets and decentralized finance (DeFi) into traditional finance. Prior to joining Blockworks, he covered the asset management industry for Fund Intelligence and was a reporter and editor for various local newspapers on Long Island. He graduated from the University of Maryland with a degree in journalism.

    Contact Ben via email at [email protected]

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