Institutional investors consider adopting Bitcoin Bitcoin may usher in its shining moment

So far, 2020 has proven to be a year of great development for Bitcoin. The asset has beaten stocks, gold, and almost every other asset so far.

All eyes are now on the first-ever cryptocurrency, Bitcoin, with a UK fund manager with billions of pounds under management claiming that Bitcoin has reached its “now or never moment”.

Are fund managers selling gold and increasing their holdings of Bitcoin?

Some technology enthusiasts and users of certain networks were among the first to become interested in Bitcoin and cryptocurrencies. Once the mainstream public grasped the disruptive potential of financial technology and the wealth it could generate, retail investors piled into the asset at the peak of the bubble.

Cryptocurrency’s next uptrend is expected to be driven by the arrival of institutional money, and while this narrative has been around for years, dating back to the launch of Bakkt last September, it has failed to gain traction.

It was only recently that institutional interest began to grow after hedge fund manager Paul Tudor Jones compared the cryptocurrency to the role that gold played in the 70s.

At the time, gold was trading at just $35 per ounce. Today, due to decades of misguided monetary policy and inflation, its price is over $2,000 per ounce. Like gold, Bitcoin’s digital scarcity is said to give it similar characteristics in the face of an inflationary economic environment.

As the Federal Reserve prints more money every quarter, institutions are eyeing Bitcoin, a cryptocurrency that, according to some hedge fund managers, has brought it to a “now or never moment.”

How Bitcoin Overcame Its Credibility Barrier

A UK hedge fund with tens of billions in assets under management told Telegraph Money that the market is “before institutional investors adopt the asset, and in the case of Bitcoin, it’s now or never.”

The hedge fund manager is considering adding Bitcoin to its fund, potentially allocating up to 30% of the fund’s gold holdings to Bitcoin. The fund managers expect Bitcoin to grow at least fivefold by 2023 if it can overcome its “credibility hurdle.”

The cryptocurrency market has risen alongside precious metals, boding well for the emerging financial asset class. It has proven to the world that the safe-haven asset story has legs, while the digital scarcity of the asset is proving its value in the current economic environment.

The potential for more gold assets to flow into cryptocurrencies is the growing security threats around the world, with some wealthy individuals in Asia moving gold offshore and unrest and protests in the United States and elsewhere in the world leading to violence and looting.

Digital storage assets are not physical storage assets, which may prove to be another important reason for some gold capital to flow into Bitcoin. At the same time, it also further promotes the institutional impact of Bitcoin on existing assets. According to the types of investors behind it, it can be seen that the current rebound of Bitcoin has just begun, and the wheel of history will not stop immediately. (Blockchain Knight)