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Survey: 85% of Wealth Managers Who Hold Bitcoin Plan to Buy More

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  • Over 85% of institutional investors holding Bitcoin plan to increase their allocations, a recent survey shows.
  • Institutional investors considered Bitcoin as a hedge against widespread inflation and currency debasement.

Over 85% of institutional investors holding Bitcoin and other cryptocurrencies plan to increase their allocation to the asset class over the next two years, a recent survey found.

 

The survey, shared with Decrypt by London-based crypto fund Nickel Digital Asset Management, recorded the answers in January 2021 of 50 wealth managers and 50 institutional investors—with a collective $110 billion under management—based in Germany, Switzerland, the US, and the UK.

A majority of the surveyed investors said that they expect Bitcoin and other cryptocurrencies to grow significantly in valuation over the next few years. 21% of investors said Bitcoin would continue to rise dramatically in 2021, while 56% said it would increase only slightly.

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The opportunity for higher returns through investing in Bitcoin was a key factor for respondents; 40% considered Bitcoin as a hedge against widespread inflation and even currency debasement, a view that has gained popularity in recent times.

“There is also growing optimism about the sector’s infrastructure improving, and this too will result in more mainstream investors entering this market,” added Anatoly Crachilov, co-founder and CEO of Nickel Digital, in a press release.

Bitcoin volatility a concern

Crachilov cautioned that Bitcoin’s infamous volatility would likely continue, but that such behavior is expected for a new technology in the early stage of its adoption curve. “The price action for such assets is never meant to be a straight line,” he said.

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“Only professional investors with a long-term view on the underlying technology should have exposure to this asset class,” Crachilov said, adding they would also need “high-risk tolerance levels.”

The comment is not far-fetched: Bitcoin traded under $4,000 in May 2020, but trades hands at over $55,000 as of today, making it one of the most volatile financial instruments currently available on the market.

But for Nickel, Bitcoin remains an opportunity. The fund said a 1% allocation to Bitcoin within a well-diversified portfolio over an eight-year period (Dec 2012—Dec 2020) showed the asset worked as an uncorrelated, diversified instrument, as part of a bigger portfolio.

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Data shows a 1% allocation to Bitcoin could work well for investors. Image: Nickel.

“Such allocation offered an important return contribution, without imposing a negative impact on the risk characteristics,” the fund concluded.

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Altcoin

Billionaire Mark Cuban Identifies Altcoin With ‘Most Upside’ As Bitcoin Blasts Above $60,000

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As Bitcoin shoots above $60,000, business magnate Mark Cuban says one altcoin stands above the rest in terms of investment potential.

In a new interview with CNBC Make It, the billionaire says that Ethereum (ETH) is the best crypto prospect on the market.

“As an investment, I think Ethereum has the most upside.”

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Cuban, who previously stated that smart contracts on Ethereum’s blockchain have revolutionized the cryptocurrency market, believes that the second-largest crypto by market cap is the digital asset which most resembles legal tender.

“I wish I had bought [Ethereum] sooner. I think it’s the closest thing we have to a true currency.”

Cuban went on to reiterate his position that Bitcoin (BTC) is superior to gold because not only is its supply scarce, but it’s easier to transfer, store, trade, and fractionalize. That sentiment is shared by fellow billionaire CEO Chamath Palihapitiya of Social Capital and Virgin Galactic.

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Cuban’s comments come on the heels of him saying that customers prefer making payments in Dogecoin (DOGE) rather than BTC at his venues because Bitcoin tends to be a highly appreciable asset.

Ethereum is exchanging hands at $3,839 at time of writing, an 11% increase from its seven-day low of $3,431, according to CoinGecko.

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ProShares Set for Bitcoin Futures ETF Launch on Monday After Apparent SEC Approval

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The US Securities and Exchange Commission has reportedly greenlit the country’s first Bitcoin futures exchange-traded fund (ETF).

ProShares, an ETF provider, filed a post-effective amendment prospectus on Friday that states the company plans to launch the BTC Futures ETF on Monday, a sign that the SEC has approved the product.

The fund doesn’t invest directly in Bitcoin, but it provides price exposure to Bitcoin futures contracts, a first in the US.

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Both Bloomberg and CNBC, citing people “familiar with the matter,” reported earlier in the week that the SEC planned to approve BTC futures ETFs from ProShares and the independent investment firm Invesco Ltd.

Invesco’s ETF is also set to provide exposure to a collection of exchange-traded products (ETPs) and private investment trusts that hold Bitcoin, rather than direct investments in BTC itself.

Last month, SEC Chairman Gary Gensler said he was open to ETFs for Bitcoin futures, noting that they are filed under mutual fund guidelines which provide “significant investor protections.”

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Bitcoin is trading at $61,549.38 at time of writing and is up 6.6% in the past day and more than 40% in the past two weeks, according to CoinGecko.

BTC hit its all-time high of $64,804.72 in mid-April.

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Bitcoin May See Real Peak If ETF Is Approved and I May Cash Out Half My ETH: CNBC’s Jim Cramer

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Jim Cramer shares a common view that Bitcoin has the opportunity to reach a short-term peak or even a real peak if Bitcoin ETFs are approved next week.

Host of CNBC’s Mad Money, Jim Cramer, has talked to Andrew Sorkin from CNBC’s Squawk Box show about the prospects of the Bitcoin price if or when four Bitcoin futures ETFs get the SEC’s approval next week.

Cramer also stated that he may cash out half of his Ethereum stash.

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SEC approval for ETF may push Bitcoin up, Cramer says

Answering Sorkin’s question, Cramer stated that a lot of people believe there is a high chance that the senior cryptocurrency, Bitcoin, may hit a short-term or even a real price peak if four BTC-based ETFs are approved by the SEC next week.

He corrected the host and said that the regulatory agency may approve not just one but four Bitcoin futures ETFs next week.

However, he stated that people are running ahead of a possible ETF approval.

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Bitcoin spikes to $59,500 as chance for ETF approval emerges

Earlier today, the flagship digital currency, Bitcoin, soared to a multi-month high of $59,500 on the Bitstamp exchange. It happened after Bloomberg released a report, saying that so far the Securities and Exchange Commission has not objected to approving multiple Bitcoin futures ETFs that were submitted to it earlier this year.

The Bloomberg article stated that the information had been confirmed by multiple sources close to the SEC and to the matter in question.

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The media giant’s ETF analyst, Eric Balchunas, believes that the likelihood of Bitcoin ETFs getting the green light has now risen to more than 90%. Still, he is not ready to “close the case” yet.

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