Daniel Masters believes that companies that invest in Bitcoin are getting an edge over their rivals.
Portfolio managers who don’t invest in Bitcoin are taking a career risk, CoinShares executive chairman Daniel Masters believes. While Bitcoin was perceived as a risky asset in the past, not having it in your portfolio could now get you fired.
“This perceived career risk of investing in Bitcoin is fast migrating into a career risk for not having Bitcoin on your portfolio, and that’s a really stunning development,” the former commodities trader at JPMorgan told CNBC’s Kelly Evans.
As Evans summed it up:
“You’re not getting fired anymore if you had some Bitcoin, but you might get fired if you don’t.”
Masters’ statement comes at a time when a growing number of asset managers, global companies and have revealed they own and are bullish on Bitcoin. The most recent is Larry Fink, the CEO of the world’s largest asset manager, BlackRock. In an interview with the former Bank of England’s governor Mark Carney, Fink stated that Bitcoin is threatening the U.S dollar’s status as the global reserve currency.
While referring to the conversation between the two, Masters stated:
“I would describe this as a conversation between two Bitcoin deniers, one of whom is coming to his senses. It was Larry Fink who was pointing out the enormous interest in Bitcoin that BlackRock is seeing on its channels and website.”
BlackRock has seen over 600,000 hits on its website for Bitcoin, with COVID-19 and ‘Monetary Policy’ being the joint second-highest at just 3,000 hits each.
4% Bitcoin Portfolio Allocation
Masters believes that companies that invest in Bitcoin are getting an edge over their rivals. He cited MicroStrategy, Square and PayPal, all of whom have outperformed the market. The CoinShares boss believes that this is as a result of these companies going public with their exposure to Bitcoin.
CoinShares has grown to become one of the public companies with the largest Bitcoin portfolios. As , the firm hit the $1 billion landmark in assets threshold in August. Through its XBT Provider suite of cryptocurrency exchange-traded products, the firm allows clients to invest in Bitcoin and Ethereum without owning the actual cryptos.
According to CoinShares’ research, a balanced investment portfolio should have a 4% allocation to Bitcoin, Masters told CNBC. This has some great “performance and diversification benefits,” he stated.
On why Bitcoin has surged in 2020, including setting a new all-time high, Masters stated:
“It’s driven by the narrative and the drive for inflation-resistant investments. It’s driven by digitization because Bitcoin is a digital store of value. It’s driven a bit by the fact that people are now a little bit more accepting of the volatility, and that’s come about partly because Bitcoin’s volatility is been steadily declining over the last few years. Other asset classes have also proved to be more volatile than people expected.”
CoinShares has in the past referred to Bitcoin as a risky tech stock. In an August , the digital asset manager stated that Bitcoin is more like a tech startup than digital gold in that if it works, investors will be heavily rewarded. However, if it doesn’t, investors could end up losing everything, just as they would with a tech stock.