Digital asset managers like Digital Asset Management, Digital Dream Labs and Digital Asset Group (DAG) are the best bets to win in a wave of digital asset sales and mergers announced in the past few months, according to a new report from Strategy Analytics.
Digital asset managers are often seen as the front-runners to be the next to benefit from a digital asset’s boom in value.
In fact, according the report, DAG’s value was higher in 2017 than in 2017 for every digital asset manager that has had a market cap of $1 billion or more.
The reason for that, Strategy Analytics says, is that digital asset firms have become more efficient and less dependent on the old models of “hedging” and “holding” as they seek to grow in size and profitability.
“In many cases, these companies have moved beyond holding and hedging to investing in their core business and are looking to diversify their portfolio to provide greater return on their investments,” Strategy Analytics analyst Josh Lowenstein wrote in a report.
“While they remain traditional hedge funds, digital asset hedge funds can now invest directly in companies like digital currency startups.”
Lowenstein also says that the boom in the market for digital assets is expected to continue as digital asset assets become more popular and more expensive to buy and sell.
But, he added, this could be short-lived.
“With more and more companies embracing the technology of digital assets, the value of digital currency will continue to increase,” Lowenstein said.
Some of the biggest winners and losers from the latest wave of mergers include: DAG, which is a digital currency startup.
DAG had its value rise by nearly $1.3 billion during 2017, according Strategy Analytics data.
DG also made more money than Digital Asset, a digital token-based trading platform.
While Digital Asset made more than DAG in 2016, Digital Asset was much more profitable.
And Digital Asset’s value has continued to grow despite DAG’s decline.
For example, in 2017, Digital Assets’ market cap was $2.6 billion, and DAG was valued at $1,531 million.
As of February, Digital asset companies’ market caps stood at $9.5 billion.
This growth, however, will likely come to a halt in 2018.
At that point, Strategy says, it will be difficult for the digital asset companies to survive as they face increasing competition from other digital asset businesses.
Analysts predict that digital assets will remain a relatively low-margin investment until 2019, when they are expected to become more profitable and likely make more money, though they won’t be able to keep up.
There’s also the possibility that digital tokens will continue their rise as investors look to hold them.
It is not clear how digital tokens might affect digital asset prices, but one potential effect is that more and better-known digital asset players could become more expensive, which would cause them to lose money in the long run.
However, this is unlikely to happen for a while, because of the massive amount of value that digital token companies are generating.
Finally, there’s the question of how digital asset owners will manage their money.
If digital asset holders want to take advantage of the opportunities presented by these mergers and buy back shares of the companies, it’s unclear how much more risk there is to them than it is for traditional investors.
Ultimately, the strategy of buying back shares could be the most important thing for digital asset investors to do in the future, Lowenstein says.
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