The Evolving View on Bitcoin
Once considered a risky investment for portfolio managers, Bitcoin is now being heralded as something that could be a career-saver rather than a career-killer. Danny Masters, the chair of CoinShares and a seasoned trader from JP Morgan, recently shared his insights on CNBC’s Power Lunch. He observed that the risk landscape has shifted dramatically, transforming Bitcoin from a bold choice to a necessary one for financial professionals.
Career Risks: Bitcoin vs. Not Investing
Masters argues that the stigma surrounding Bitcoin has faded. He suggested that it’s no longer dangerous to include Bitcoin in an institutional portfolio; in fact, the real risk might lie in excluding it. CNBC host Kelly Evans succinctly summarized this shift: “You’re not going to get fired anymore if you had some Bitcoin, but you might get fired if you didn’t.” It looks like being a crypto skeptic might soon be akin to sporting a mullet in a business meeting—out of style and potentially detrimental.
Volatility: A New Perspective
It’s not just that managers are embracing Bitcoin; it’s that they’ve realized other traditional assets can be far more volatile. Masters pointed out that the hesitation around Bitcoin’s volatility has waned, as investors are witnessing more erratic behavior in stocks and other investment vehicles. If the stock market had a chill pill, it’d be spreading the good vibes everywhere, while Bitcoin calmly sits in the corner, nodding appreciatively.
Companies Leading the Charge
With major players like Square, Microstrategy, and Paypal publicly backing Bitcoin, the digital asset is being integrated into portfolios across the board. Masters mentioned these firms are not just hanging in there; they’re actually outperforming the market. The sentiment in the market? Buckle up, it’s electric! The question is less about whether firms will invest in Bitcoin and more about the timing and quantity of exposure.
Current Market Sentiment: Extreme Greed?
The Fear & Greed Index has skyrocketed to a staggering score of 92 out of 100, indicating extreme greed—a reaction not seen since June 2019. Masters mused over Bitcoin’s resilience, especially in the wake of adverse events like the BitMEX controversy. He noted, “Having been around crypto during MtGox, the China ban, and the Bitfinex hack, I was struck by the lack of negative price movement, particularly around BitMEX.” It seems Bitcoin has grown up and is no longer fazed by the drama that once sent it tumbling.
