Money managers with no cryptocurrency risk are left behind

Cryptocurrency occupational risk is shifting to asset managers who have no exposure to digital assets rather than those already invested, highlighting a significant shift in the adoption of bitcoin (BTC) and decentralized finance, according to Bloomberg’s senior commodities strategist Mike McGlone.

Bloomberg’s November issue of Crypto Outlook described 2021 as just another founding year for the crypto market and further emphasized the digital asset’s long-term value proposition. In this environment, asset managers risk falling behind and underperforming their crypto-owned competitors, ”wrote McGlone, adding:

“Our picture shows a 200% better performance of the Bloomberg Galaxy Crypto Index and DeFi in 2021 compared to the S&P 500.”

Although cryp Exhibit Much higher volatility than traditional investments, the sell-off of assets like Bitcoin and Ether (ETH) “seems to attract avid buyers, most of whom face the possibility of a potential buyback”. ”

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McGlone goes on to explain that “Managers are expected to spot major trends in public,” an accomplishment that becomes much more difficult when they rely on traditional portfolio strategies such as an allocation of 60% in stocks and 40% in Bonds. Many asset managers have warned that the traditional 60-40 portfolio is no longer enough in today’s market.

Related: JPMorgan says the “fair price” of BTC is $ 35,000 … but it still expects the cryptocurrency to “do better”.

As Cointelegraph reported in early October, McGlone correctly predicted the early stages of Bitcoin’s fourth quarter breakout, arguing that the $ 50,000 resistance may have turned into support. The analyst says there will be $ 100,000 BTC in the works by 2021 – a view that was reflected in the latest report.

At the time of writing, the top cryp is worth $ 62,080, according to Cointelegraph Markets Pro. Bitcoin hit a high of over $ 67,000 in October before correcting down.

According to Michael Sonnenshein of Grayscale, Jeffrey Wang of Amber Group and Edouard Hindi of Tyr Capital, investment managers and financial advisers are expected to play a bigger role in the crypto market. In the first quarter, Cointelegraph interviewed three executives to gauge institutional interest in crypto investing. From their point of view, the “professional risk” of investing in cryptocurrencies has been significantly reduced. The final dominoes, according to Edouard Hindi, can be fiduciary measures:

“Now that regulatory and regulatory barriers are slowly being dismantled, the perception that the ‘trustee standard’ is still the norm, which could hinder the wider adoption of cryptocurrencies by financial advisors, is in the client’s portfolio. “