Archives March 2021

Bitcoin is Almost Uninvestable, Says Barclays Private Bank Executive

This last few months, Bitcoin made history. In one year, the firm shattered its historical record, flirted with a 10x ROI, even hit ATH and became the highest performing asset of the decade. However, is it overall a decent investment? All depends on your crystal. For example, Gerald Moser, the Barclays Private Bank’s chief market strategist, does not believe this.

The swings in the price of Bitcoin and other cryptocurrencies are so serious for Moser that investing in them is not a positive thing. While the projected return for Bitcoin is hardly possible to estimate, its volatility renders the commodity virtually ‘uninvestable.’

The comments from Moser indicate that, regardless of how profitable, traditional Walls Street investors do not have very risky assets relaxed. Moser states that along with equities or oil shares he positions Bitcoin in a high-risk grouping. But many will probably cast the cryptocurrency in any portfolio, also under that thought.

Moser not only claims that Bitcoin is a poor investment but also a poor diversifier of risks. He clarified that since 2016, weekly return correlations indicate that Bitcoin is unrelated to any commodity. In fact, his estimate reveals that over the last three corrections from 2015 Bitcoin underperformed shares.

However, since Bitcoin is so bad, what is the reason why Bitcoin has catapulted its price up to new heights? The explanation for Mose is simple: it is some sort of “meh” news which is carried to the extreme. Institutional investment is not as relevant as many think. The cryptocurrency success was powered mostly by individual investors entering an apparent unsustainable rally rather than long-term institutional investment

This view is held by Adam Grimsley, founder of the UK’s first crypto fund. He thinks that institutions serve a small market share and are not champions because Bitcoin is not examined in typical categories of investing. This cynical mindset, however, does not always share. MicroStrategy is one of the companies with over 70 kB of Bitcoin purchased in 2020, that wanted to bring much skin into the game.

Its chief executive officer Michael Saylor has been a leading Bitcoin evangelist, providing everything from free lessons on Bitcoin awareness to outrageous comments such as suggesting that BTC may have been designed by Heaven.

Other relevant foreign institutions and banks have lauded Bitcoin, saying it is a more developed currency that can be extended. For starters, the CEO of PayPal at the Web Summit said it was “very bullish on all kinds of digital currencies.”

Many big banks around the world are now beginning to provide crypto-related services, change their opinions, prize Bitcoin, and use the blockchain to function internally.