Bitcoin is often criticized for its high volatility, but Bloomberg senior commodities strategist Mike McGlone believes that very soon investors will turn to the cryptocurrency during periods of risk aversion. According to McGlone, this process is already in full swing, and 2021 may be a turning point for the recognition of cryptocurrency as a protective asset.
"Bitcoin is on the way to becoming a global reserve asset. The leap from maturity in 2021 may be a factor in turning bitcoin into an asset that will be chosen to reduce risks, " he writes.
McGlone accompanied his comment with a chart showing that the current bull cycle is consistent with the trends of 2013 and 2017. If the previous scenarios are repeated, the new peak may be at $400,000, the chart shows. To do this, bitcoin should rise in price by another eight times, and the Bloomberg strategist expects that this will happen this year.
McGlone's forecast overshadows the expectations of analysts focused on the stock-to-flow model-it assumes that bitcoin will rise to only $288,000 by 2024. Although the strategist does not specify the specific factors for the growth of the price of the cryptocurrency to these levels, the idea that bitcoin reduces the risks of the portfolio, and does not increase them, as previously assumed, has recently been increasingly occupied by market participants.
Troy Gaesky, senior portfolio manager at SkyBridge Capital, told Bloomberg today that bitcoin is a prerequisite for investor success in 2021.
"We believe that by the end of this year, people will potentially be able to look back and say,' If you had a significant position in bitcoin, this year was good or even great for you. If you do not have such a position, it may be much more difficult for you to achieve the desired results, given all the events that we are discussing in the context of chaotic monetary policy, interest rates and valuations, " he said.
According to Gaeski, the position in bitcoin of his own company is 13% of the portfolio. Speaking about the volatility of the cryptocurrency, he noted that this is the price that you have to pay for higher performance. "This is a unique opportunity where the mentioned risk is actually paid for," he added.
The investor announced that SkyBridge usually takes a more conservative approach to the issue of choosing the size of positions, but with bitcoin the situation was different, as they were afraid to miss a rare opportunity. Initially, SkyBridge was based on the standard position size of 4-8%, but the subsequent increase in the price of bitcoin led to an increase in its share in the portfolio.
"It is quite obvious that if there is any major movement, it will be somewhere in the short term. We started investing a little bit in mid-November and increased our share to 5.5% in December. This is all our expenses. Since then, we have not added any capital, " he said.
In the future, SkyBridge intends to adjust the size of the position, Gaesky added, but right now bitcoin is at a promising point and enjoys the benefits of a confluence of three factors: an increase in the money supply, the spread and the halving cycle.
Morgan Stanley, the first major US investment bank that is preparing to offer its clients access to the cryptocurrency, recently started talking about the feasibility of including bitcoin in the portfolio. Its analysts, however, say that the inherent risks do not allow placing more than 2.5% of the capital in bitcoin.