Financial institutions are increasingly accepting cryptocurrency and decentralized finance, according to senior commodity strategist Mike McGlone of Bloomberg.
Bloomberg‘s Crypto Outlook for November highlighted 2021 as “simply another foundation year for the cryptocurrency sector,” emphasizing the long-term value proposition of digital assets. Money managers “risk falling behind and failing peers who buy crypto assets” in this scenario, according to McGlone.
“Our graphic depicts the 200%-plus outperformance of the Bloomberg Galaxy Crypto and DeFi indexes in 2021 vs. the S&P 500.”
Despite the fact that cryptocurrency is significantly more volatile than traditional investments, selloffs in assets like Bitcoin and Ether (ETH) “appear to be attracting responsive buyers, most of which face the potential of falling behind by avoiding crypto allocations.”
Bull markets are about positive dangling carrots and we see plenty ahead for #Bitcoin and #Ethereum. The launch of Bitcoin ETFs in the U.S. appears as an iteration to get to what may better facilitate most investors — ETFs tracking the crypto market, like the S&P 500. pic.twitter.com/xMQtBdQ5nA— Mike McGlone (@mikemcglone11) October 25, 2021
“managers are expected to catch big trends ahead of the masses,” a task that becomes much more difficult if they rely on typical portfolio techniques like allocating 60% to equities and 40% to bonds.” Many investment managers have warned that in today’s market, the typical 60-40 portfolio is no longer adequate.
McGlone correctly forecasted the early phases of Bitcoin’s fourth-quarter breakthrough, predicting that the $50,000 resistance has likely switched to support in early October. The analyst predicted that $100,000 BTC will be in play by 2021, a prediction that was echoed in the newest research.
At the time of writing, the flagship cryptocurrency was worth $62,080, Markets Pro. Bitcoin peaked above $67,000 in October before correcting lower.
According to Grayscale’s Michael Sonnenshein, Amber Group’s Jeffrey Wang, and Tyr Capital’s Edouard Hindi, investment managers and financial advisers will play a stronger role in the cryptocurrency market.
“Now that custody and regulatory barriers are slowly dropping, what could still be hindering a broader adoption of crypto by financial advisors is the perception that ‘fiduciary standards’ remain a challenge in openly advocating for the asset class to be included in customers’ portfolios.”
