Put Your Money On Crypto for the Long-Term, Says Major Wealth Manager for Pensions

Put Your Money On Crypto for the Long-Term, Says Major Wealth Manager for Pensions

It’s time institutional whales put their money into cryptocurrency according to major investment management firm Cambridge Associates.

IT’S TIME TO ‘BEGIN EXPLORING’ SAYS CAMBRIDGE ASSOCIATES

The Boston-based consultancy only advises major institutions who manage more than $300 billion worth of clients’ assets. Cambridge was quoted in Bloomberg on Monday as saying:

“Despite the challenges, we believe that it is worthwhile for investors to begin exploring this area today with an eye toward the long term. Though these investments entail a high degree of risk, some may very well upend the digital world.”

That’s a remarkably on-point statement in a space dominated by optimistic cheerleading and deathly pronouncements. Cambridge specializes in pensions and endowments, and its declaration of support for crypto is probably not a spur of the moment decision.

The firm advise would-be investors to conduct an industry-wide deep-dive on the various aspects of cryptocurrency; from investing in venture capital to trading tokens on exchanges.

Despite the year-long decline in the value of the cryptocurrency market, Cambridge believes we are still in the developing stages of the industry:

“The dramatic declines that swept across the crypto space raised questions about the future of these assets and the blockchain technology that underpins them. Yet, in looking across the investment landscape, we see an industry that is developing, not faltering.”

SIGNS OF A TURNING TIDE AMONG FINANCIAL INSTITUTIONS?

Last week Grayscale released this report detailing the steady influx of institutional money to the crypto space in the past year. The fact that institutional investments only increased as coin prices declined is an encouraging sign, and suggests that major firms see potential for a reversal.

Graphic from Grayscale shows overall investments and diversification of assets rose hand-in-hand throughout 2018

Grayscale went so far as to declare cryptocurrency a new asset class, and suggested they could play a ‘diversifying role’ within the average investor’s portfolio:

“Despite a slowdown in investment across products in the fourth quarter, we continue to see evidence that digital assets are here to stay as a new asset class. Moreover, we believe in a future where multiple digital assets survive, thrive, and complement one another in the digital economy.”

Days ago it was revealed that two public pensions – the Virginia’s Police Officer’s Retirement System, and Employees’ Retirement System in Fairfax County – had invested in the new $40 million cryptocurrency fund started by Morgan Creek.

Katherine Molnar, the chief investment officer overseeing the Fairfax County pensions said:

“Blockchain technology is being applied in unique and compelling ways across multiple industries. We feel it is important to be opportunistic and are excited to participate in this emerging opportunity, due to the attractive asymmetric return profile that it represents.”

On top of all this, the much derided JPM Coin marked a major change of sentiment for JP Morgan Chase CEO Jamie Dimon this week. While the coin is unlikely to add anything in the way of innovation, it stands as another example of rapidly growing sentiment for the crypto space among financial institutions.

Published at Mon, 18 Feb 2019 17:11:23 +0000