The year 2020 has seen many of the wealthiest investment firms stake a considerable interest in cryptocurrencies like Bitcoin. We all know how billionaires like Paul Tudor Jones and Bill Miller speak candidly about why they think Bitcoin is a safe bet to protect your assets against inflation.
In recent times, one of Australia’s biggest investment firms, Pendal Group picking up Bitcoin. Just to give you a brief idea about the size of the firm, Pendal Group is publicly listed on the Australian Stock Exchange and enjoys a market cap worth over $1.6 Billion!
This is the latest heavyweight in a long list of institutional investors who are moving to Bitcoins. Statements from the firm have shown some of the reasons why they were compelled to make the shift.
The Shift from Gold Investments to Bitcoin Futures
For a very long time, the standard operating procedure for investment firms in the face of rising inflation has been to pick up gold. Traditionally, gold has always been a solid hedge, which has protected investments for both normal individuals as well as the super-wealthy class.
However, unlike Bitcoin, which gives you greater fluidity and liquidity potential, gold is not very easy to use. This means that while you might be safe by picking up gold, you will not be able to take actionable investment decisions with the same. This is pushing firms to explore creative investments as an alternative.
Investment firms and retail investors are hedging their bets on the https://immediate-edge.co to ensure that they are being able to successfully execute crypto trades without any issues.
Like Pendal Group, other billionaires including Mexico’s second richest man, Mr. Ricardo Salinas has gone on record to state that he has personally invested a good 10% of all his liquid assets into Bitcoins!
Why are Investment Firms pushing for Bitcoins over Gold?
Vimal Gor from Pendal Group says that all the hype and euphoria about Bitcoin and cryptocurrencies is not lost on their wealthy clientele. He says that the firm had been getting multiple queries from their clients about Bitcoin and other cryptocurrencies.
The recent strong showing of Bitcoin and other cryptos to the nearly $20K mark in November 2020 has meant that such queries can no longer go unanswered. Rather than show customers other options, firms have themselves been forced to engage with the new financial asset.
This means that there is a considerable attraction for picking up Bitcoins and other cryptos by the rich and wealthy class. Many experts state that institutional investors are important for Bitcoins as they might be able to bring in the much-needed stability required for the asset to grow.
The simple reason is that institutional investors never opt for short-selling. They are looking to hold value for a considerable period, leading to less selling and more consolidation. In terms of any investment, this helps bring in stable periods of growth.
Why should Retail Investors take note of this?
A number of reasons should interest you as a retail investor. As more institutional investors get in on Bitcoin trading and investing, the scarcer the asset will get. Meaning, that it would not be as easy to buy, sell or trade Bitcoins for normal people in the near future.
Secondly, the rise of investment firms in the landscape would be enough to make the prices shoot through the roof! If the same trend continues and more and more investment firms start picking up stakes, you might see Bitcoin cross the $100K threshold by December 2021.
Many insiders are of the opinion that it is only a matter of time when Crypto Exchanges start offering 90% of their attention to these bigger clients. Dealing with a few Bitcoins is not going to be profitable for the exchanges.
The Final Word
The Crypto Ecosystem led by Bitcoin is set for an interesting 2021. There are significant shifts, which can already be seen in the way the buying and selling of cryptocurrencies are being affected. With scarcity becoming the norm, the supply is likely to freeze, giving rise to a massive demand wave.