Bitcoin, a crazy investment? Barclays‘ bankers don’t want you to buy Bitcoin
Not just Bitcoin’s qualities – Barclays Private Bank’s verdict: Bitcoin is virtually „uninvestable“. According to Gerald Moser, chief strategist of the private bank, Bitcoin would be too Bitcoin Billionaire volatile and would not offer sufficient diversification benefits for major investors to consider positioning on BTC.
Bitcoin too volatile to be bought by institutional investors?
As Bitcoin enters a new phase of correction, some institutional investors are questioning its place in their asset portfolios.
„Although it is virtually impossible to predict Bitcoin’s expected return, its volatility makes this asset almost unattractive for portfolio management purposes. »
If lack of volatility is the main investment criteria, then Bitcoin is not for your portfolio. However, although the annual return on Bitcoin is absolutely unpredictable, no long-term investor has lost by buying Bitcoin.
The only year in which the return was negative was 2018 with a 70% decline over the period. In addition to this, Bitcoin has provided a positive return of 225% over the last 3 years. If Mr. Moser doesn’t want this return on investment, we will gladly take advantage of it for him!
Bitcoin: correlation and diversification
The second criticism of the fund manager is the lack of relevance of Bitcoin from a diversification point of view. Diversification – the only free thing in investment – consists of holding assets that do not react in the same way to market developments.
The criticism is then well-founded. Indeed, at the time of the March 2020 crash, many had hoped that Bitcoin would finally become a safe haven against the vagaries of traditional markets. Unfortunately, it collapsed along with the rest of the markets.
Bitcoin has recovered well from the spring of 2020. However, if it cannot break out of its correlation with the markets, particularly with US equities, it will have a hard time establishing itself as a store of value for all.