When it comes to Bitcoin as an investment asset, the New York-based Alliance Bernstein’s research force management has changed the hearts of global investment managers who own ৩ 31 billion in assets.
In a research note produced for clients seen by Kindesk, Inigo Fraser Jenkins, co-head of the portfolio strategy team at Bernstein Research, said the firm had previously ruled. Bitcoin As an investment asset in January 2018, Bitcoin reached its all-time high of close to 20,000.
However, post-epidemic changes in the policy environment, debt levels and diversification options for investors now have to be “accepted” by the financial system. [bitcoin] At least there is a “role” in long-term asset allocation.
Fraser Jenkins said the “significant reduction” in Bitcoin price volatility has made it more attractive as a price store and medium of exchange. Bitcoin’s correlation with other great resources has also increased. On the other hand, he said, Bitcoin is a liquid asset and it can be sold quickly, as happened during the March market crash.
“A narrow experience shifts down from experience [volatility] Bitcoin makes it more desirable but its increased interrelationship points in a different direction, ”wrote Fraser Jenkins.
When it comes to hedging against inflation, according to the note, “Bitcoin’s driver is like gold, although cryptocurrency” cannot operate in a way that would resist inflation in a given Fiat currency. “
Other issues such as the use of cryptocurrencies in crime and the heavy footprint of bitcoin mining were cited as concerns surrounding the property due to the increase in regular investigations.
Fraser Jenkins said there could be potential problems for Bitcoin in the future as well. The epidemic is likely to strengthen the government and play a bigger role in running the economy, and if cryptocurrencies become much larger than they are today, they could be a “nuisance for policymakers.”
“Cryptos have a place in asset allocations … unless they are legal!” He said.
Finally, Bernstein Research recommends that Bitcoin may consist of 1.5% to 10% portfolios, depending on the monthly return of the cryptocurrency.
“Bitcoin results in lower allocations, but then allocations within this general optimization framework.
Some other asset classes are zero, so Bitcoin seems to be emotionally significant enough in that context, ”Fraser Jenkins wrote.