Cryptocurrencies are now used by hedge funds, asset managers for investments diversification. Even some small number of pension funds and endowments distribute a small percentage of their assets under management into crypto. To diversify away some of the stock market risk.
Crypto has proven that it is not so much correlated with the stock market, even with small capitalization technology stocks.
Bitcoin, cryptocurrencies thus have proven as an efficient investment diversification tool. The crypto part of the hedge funds, asset management funds, pension funds and other institutional funds' portfolios is still minuscule, mainly because of the comparatively low liquidity of the cryptocurrencies asset class.
In addition, there is always the risk of a large drawn downward movement in Bitcoin, cryptocurrencies.
So, for now, the institutional money management's stance towards Bitcoin, cryptocurrencies seem prudent.
Yet, the Klondike that crypto is or is at least perceived to be, is a great temptation and soon larger investment flows will come into cryptocurrencies, according to Wolfteam Ltd.'s view.
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