There has been an acceleration of financial institutions moving into bitcoin. Witness these recent announcements.
Blackrock’s Chief Investment Officer, Rick Rieder, said cryptocurrency, including bitcoin, “is here to stay.” Bitcoin could replace gold “because it’s so much more functional than passing a bar of gold around”. Blackrock is the world’s largest asset manager.
Investment giant AllianceBernstein, with $600m of assets, now says bitcoin has a role in investor portfolios. Allocations to bitcoin can be 1.5% to 10%.
Deutsche Bank Says investors increasingly prefer bitcoin over gold as an inflation hedge according to Jim Reid, managing director. “Bitcoin has long been considered by supporters as digital gold due to its limited, predictable supply and use case as a store of value.”
“The $5 billion Guggenheim Macro Opportunities Fund may seek investment exposure to Bitcoin indirectly through investing up to 10% of its NAV in Grayscale Bitcoin Trust,” the firm said in a filing to the SEC.
Wall Street Legend Bill Miller gives a ‘strong’ bitcoin recommendation. Miller was former CEO of Legg Mason, with over $800 bn of assets under management. “I think every major bank, every major investment bank, every major high net worth firm is going to eventually have some exposure to bitcoin.”
Bitcoin to $500,000? Fund manager Cathie Wood thinks it could happen. She is the CEO of Ark Investments which has over $ 5b assets and focuses on disruptive innovation. If institutions allocated mid-single-digit amounts to bitcoin, it would take the price to $500,000.
JPMorgan Chase CEO Jamie Dimon said blockchain will have a pivotal role in the future of finance even if bitcoin is not his “cup of tea.”
Payment processing giant Paypal announced last month that, “all eligible Paypal account holders in the U.S. can now buy, hold, and sell cryptocurrency directly with Paypal.”
Michael Saylor’s NASDAQ company MicroStrategy recently purchased $425 million in bitcoin. MicroStrategy’s bitcoin journey began with the realization its $500 million cash pile was being eaten alive by government money printers. “What we’re trying to do is preserve our treasury,” he said.
Many of these investors were previously skeptical of bitcoin but more and more are slowly coming around.
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Tags: Mitchell Dong, CEO, Pythagoras Investment Management, Savvy Investor