Occupational risks surrounding cryptocurrencies are shifting to money managers who do not deal with digital assets unlike those who have already invested, highlighting a fundamental shift in institutional acceptance of Bitcoin (BTC) and decentralized finance, according to Bloomberg’s chief commodities strategist. Mike McGlone.
The November issue of Bloomberg Crypto Outlook described 2021 as just another foundation year for the cryptocurrency market, further emphasizing the long-term value proposition of digital assets. In this environment, McGlone writes, money managers “risk falling behind, and underperforming, their crypto-holding peers,” adding:
“Our graphic shows a 200% surplus performance of the Bloomberg Galaxy Crypto and DeFi indices in 2021 versus the S&P 500.”
Although encryption Exhibitions Much higher volatility than traditional investments, selling in assets such as Bitcoin and Ether (ETH) appears to be “attracting responsive buyers, most of whom face the prospect of default by avoiding crypto allocations.”
Bull markets are all about positive tumbling islands and we see a lot to come # bitcoin And # Ethereum. The launch of Bitcoin ETFs in the US seems like an iteration of access to what might be easier for most investors – ETFs that track the cryptocurrency market, such as the S&P 500. pic.twitter.com/xMQtBdQ5nA
– Mike McGlone (@mikemcglone11) October 25 2021
McGlone further explained that “managers are expected to spot big trends before the masses,” a feat made even more difficult if they rely on traditional portfolio strategies, such as allocating 60% to stocks and 40% to bonds. Many wealth managers have warned that the traditional 60-40 portfolio is no longer sufficient in today’s market.
Related: JPMorgan says fair price of BTC is $35,000…but still expects the cryptocurrency to outperform
As Cointelegraph reported in early October, McGlone correctly predicted the early stages of a bitcoin breakout for the fourth quarter, arguing that the $50,000 resistance likely flipped to support it. The analyst said $100,000 of BTC was in the running for 2021 – a view that was echoed in the latest report.
At the time of writing, the major cryptocurrency is worth $62,080, according to Cointelegraph Markets Pro. Bitcoin peaked above $67,000 in October before correcting lower.
Investment managers and financial advisors are expected to play a larger role in the cryptocurrency market, according to Michael Sonnenchin of Grayscale, Jeffrey Wang of Amber Group and Edouard Hindi of Tyr Capital. In the first quarter, Cointelegraph interviewed the three CEOs to gauge institutional interest in crypto investments. In their view, the “professional risk” of investing in cryptocurrency has been greatly diminished. The final domino could be, according to Edwar Hindi, credit criteria:
“Now that custodianship and regulatory barriers are slowly beginning to decline, what could be hindering the widespread adoption of cryptocurrency by financial advisors is the perception that ‘credit standards’ remain a challenge in public advocacy for the asset class to be included in clients’ portfolios.”