Cryptocurrency Skepticism Persists Among Top Investors
Despite the recent surge in Bitcoin’s value, surpassing $100,000, and the inauguration of Donald Trump, who has expressed support for cryptocurrencies, many of the world’s largest investors remain hesitant to invest in the digital asset.
A Risk-On Appetite Indicator
Anne Walsh, chief investment officer at Guggenheim Partners, which manages over $335 billion in assets, believes that cryptocurrency is not an alternative to traditional banking, but rather a reflection of market sentiment. “To me, what crypto really correlates to is Nasdaq – it’s a risk-on appetite indicator,” she stated.
Sovereign Wealth Funds Stay Cautious
Nicolai Tangen, CEO of Norway’s $1.8 trillion sovereign wealth fund, Norges Bank Investment Management, also expressed reservations about investing in cryptocurrency. This stance is likely to influence other large investors, given the fund’s significant size and influence.
Challenges in Valuing Crypto
Saira Malik, CIO and head of equities and fixed income at Nuveen, which manages $1.3 trillion in assets, highlighted the difficulty in determining the fundamental value of cryptocurrency. “As an investor, what makes it challenging is figuring out what the true fundamental value of crypto is,” she noted.
Investing in Crypto-Exposed Companies
While Nuveen does not have direct exposure to cryptocurrency, it does invest in companies that could benefit from the digital asset. This approach allows the firm to tap into the potential of cryptocurrency without taking on direct risk.
Building Expertise
Melissa Stolfi, COO at TCW Group, which manages nearly $200 billion in assets, emphasized the importance of building expertise in cryptocurrency before investing. “There’s a lot of technology, a lot of intellectual power and talent that you need to bring into an organization to really excel in (crypto),” she said.
Focus on Core Business
Stolfi’s firm remains focused on enhancing and maintaining its core business, rather than venturing into cryptocurrency. This cautious approach is likely to be adopted by other large investors, at least for now.
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