Pay attention, multi-asset managers
“When something is being touted as a new asset class, multi-asset managers should pay attention,” adds Seven Investment Management investment manager Ben Kumar.
Bitcoin and other cryptocurrencies like it are just “the latest expression of taking back control” at a time when governments and by extension central banks are less trusted than they’ve ever been and “when money-printing has gone into over-drive,” says Kumar.
The height of the cryptocurrency craze is also coming at a time when there is “a lot of money sloshing around the system looking for the next big thing”, he adds.
“The fervent believers and the get-rich-quick speculators are, for now, on the same page. We’ve seen in the last year though that this combination of investors and fixed supply can lead to sharp moves in price driven by greed and fear – bitcoin has proved that all investments do go down as well as up– and that this volatility is likely to continue.”
Bitcoins may very well not be the digital currency decades into the future but there is a clear demand for the technology it exploits and the advantages it offers over traditional forms of currency.
