Missing Bitcoin investments by experts “strange” in view of the stock market trends
Bitcoin investors have been saying for years that the price will rise to an unimaginable level once the world's money managers and institutional investors take positions in the crypto asset. Such an inflow of capital is still pending.
This is “strange” for at least one digital currency analyst – especially given how differently stocks perform for investors. Meltem Demirors says that investments should be made based on the perception of the future – and that Bitcoin will be central to the future of finance.
Since most stocks are bad investments, why do money managers take no risk with Bitcoin?
In a recent Twitter thread, the “Chief Strategy Officer” of the CoinShares Group writes that she perceives the lack of risk-taking among investment professionals as “strange”.
Demirors indicates that the shares of less than one percent of the companies make up more than three quarters of the earnings of the entire stock market. In the meantime, a large number of investments simply lose money.
1 / people have such odd views on investing!
less than 1% of stocks drive more than 75% of stock market returns. over half of all stocks underperform the risk-free rate (US treasuries), and many loose money.
the top 10 co's account for> 50% of wealth created in the last 10 years.
– Meltem Demirors (@Melt_Dem) December 30, 2019
According to Demirors, it is difficult to select individual stocks – and this leads to an approach that favors investments in sectors rather than in certain companies.
Given the lack of investment opportunities, the CoinShares executive believes the lack of capital allocation to Bitcoin and cryptocurrencies by investment professionals is puzzling. For them, investors should make their decisions based on their future prospects.
“I believe that Bitcoin is a massively important part of the future.”
However, since this is a completely new asset class, investing in Bitcoin seems to be far too risky even for the tiny percentage allocation that Demirors alludes to in your thread.
Investment professionals aren't just in business to make money for their clients – they don't want you to see them lose money either. Professional money managers would still rather play it safe than being the company “that has lost all the money on Bitcoin”.
There are still many risks in the Bitcoin and cryptocurrency industry. The most important of course is volatility. However, there is also a risk associated with the safekeeping of digital assets and the changing regulatory landscape.
Top-class examples of hacked exchanges and customers who lose money, as well as a general lack of understanding for the asset exacerbate the perceived risk and reduce the desire of a typical “money manager” to look beyond the proverbial abyss.
Likewise, hostility will deter managers who keep expressing key members of the U.S. government (and other governments) towards the industry.
Nevertheless, we are certain that the next year will be “the year in which institutional investors come onto the market”. Who knows, maybe it will be this time.
Proof of text: newsbtc