Increasing inflation regarding the Dollar has forced more and more investors to think and opt for Bitcoin and decentralized finance as a better and safe option in the past year.
Recently, in a podcast, the Chief executive officer of Bitwise (asset management incorporation), Mr Hunter Horsley, mentioned some of the reasons behind the inclination of financial advisors towards cryptocurrencies.
Fixed income, cash, stock exchange, real estate and all the other forms of liquidity that were considered safer once are now under the shade of uncertainty. The Bank of America Securities published a report last year which states that the mindset of people is changing and the typical philosophy of 60-40% portfolio in stocks and bonds respectively is no more in use now. This is the reason which has made the institutional investors think of a new source of liquid investment.
According to Hunter Horsley, people want to invest differently. The time has come to think out of the box. When people come to know about cryptocurrency, which is liquid as per their desire, they become fascinated by its rising percentage. In addition, it can be done with only 1-2% allocation of assets. That is why it has become a risk they want to take happily.
Also read:Earlier this year, the global stock market and bonds comprised $95 and $105 trillion worth, respectively, as compared to a mere $1 trillion value of cryptocurrency in the international market. On the other hand, it provided a 300% profit margin in 2020, the year of the pandemic that is why it is now on top of everyone’s to-do list.
Highlighting the reasons why the investors are attracted to DeFi, he shared his observation that there is an 8% increase in the people who are staunch believers of the high potential of Bitcoin.
Talking about his company’s crypto index fund, he said that despite a 44% decrease in funds return still it is the largest growing index fund which has raised above 32 Million Dollars in a fortnight. Bitcoin is a digital version of gold, he said.
He added that blockchain is difficult to understand, but if you are able to understand the similarities between Decentralized and traditional finance, then you are on the right track. By comparing today’s scenario with that of 2015, he said that the situation is totally different now, and more new things are coming, which means one does not have to necessarily depend on Bitcoin. There are a lot of options.
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