Bitcoin price topped $ 40,000 once this month
A handful of UK wealth managers have started using Bitcoin as a profitable asset in diversified investor funds, while others reject investments in the cryptocurrency as “speculative”, risky and with no space in client portfolios.
After the extreme price spike in late 2017, when Bitcoin topped $ 20,000 for the first time, an overwhelming majority of UK wealth managers avoided cryptocurrency risk as an appropriate investment for client portfolios.
With the exception of the lingering bouts of wild volatility, much has changed since then as institutional adoption increases and the price climbs above $ 40,000.
On the subject of matching items
Ruffer Investment Management’s exposure to Bitcoin now stands at around £ 550 million, which is around 2.7% of total AUM, the company told Investment Week.
Meanwhile, Waverton Investment Management reversed its position on cryptocurrency. Fund manager William Hanbury cited an improved regulatory environment in December to bolster the case for Bitcoin.
Regulators in the UK and around the world have taken action to investigate how best to regulate so-called “stable coins”. HM Treasury recently set out its regulatory priorities.
Ashurst law firm partner Bradley Rice said, “Stablecoins are back on target and regulators around the world see the threat if left unregulated.
“The Treasury Department is keen to claim that this is just the initial regulation of cryptoassets – just enough to get stable coins into regulatory space without wanting to hold back further innovation.”
The Financial Conduct Authority has warned consumers on several occasions about the risks of investing in cryptocurrencies, which they termed “high risk” and “speculative”.
Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, said, “The FCA firmly believes that the crypto Wild West could get out of hand and warns that consumers could lose all of their money if they promise faster and higher Keeping returns. “
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Tighter regulation of crypto assets such as Bitcoin could be an investment opportunity by legitimizing the asset class, said the managing director for institutional crypto trading at MARKTS TradingScreen, Alex Carteau.
“Further regulation is a great opportunity for investors as very few individuals / companies” use / own “Bitcoin as it is fairly unknown and unregulated,” he said. “Once regulated, it will immediately fall into one of the ‘traditional’ asset classes that already exist.
“This means that asset managers, banks and brokers are allowed to invest, trade, hold and store it en masse.
“Because of its store of value and its uncorrelated nature, it is very likely that many financial institutions will shift their allocation to include a percentage of their assets, which immediately creates enormous demand for it.”
Brooks Macdonald warned, however, that assets could become “victims of their own success” in the long run.
It stated: “Policymakers could put regulation in place that, at best, could heavily regulate their use. With monetary policy continuing to play such an important role in economies and markets, especially during the Covid-19 pandemic, it is unlikely that political Decision makers give this up. ” an important macroeconomic lever. “