Gerald Moser, the chief market strategist at Barclays Private Bank, claims investors should keep Bitcoin out of their investment portfolios. Bitcoin is too volatile to provide diversification benefits for large scale investors, according to the executive. He believes it is more favorable to invest in equities and commodities instead of the leading cryptocurrency. Bitcoin Placed in High-Risk Category Bitcoin’s recent peak rally of $40,000 has caught the attention of many large scale investors. However, the chief market strategist at Barclays Private Bank doesn’t seem to find it impressive. Moser told the Financial News that the extreme volatility associated with Bitcoin and other cryptocurrencies is what makes them almost uninvestable, saying: “While it is nigh on impossible to forecast an expected return for bitcoin, its volatility makes the asset almost ‘uninvestable’ from a portfolio perspective.” The executive at the private bank placed Bitcoin in a high-risk category, alongside equities and oil investments. He not only considers Bitcoin (BTC) to be a bad investment but also a poor risk diversifier. Moser calculated that the weekly return correlations since 2016 show that bitcoin is not correlated with any asset. He, in fact, claimed that the leading cryptocurrency underperformed equities over the last three corrections since 2015. Moser assured that large scale investors are not comfortable with volatile assets, regardless of their glorifying returns, saying: “Many would probably throw the cryptocurrency out of any portfolio in a typical mean-variance optimization.” Institutional BTC Investors Not as Influential When asked about what explains the increased institutional investment in the leading cryptocurrency that resulted in the price of the cryptocurrency exceeding new highs. Moser explains that it is only a short term phenomenon: “The performance of the cryptocurrency has been mostly driven by retail investors joining a seemingly unsustainable rally rather than institutional money investing on a long-term basis.” Barclays Private Bank offers personalized bank accounts and mortgages as well as wealth management services, catering to high net worth individuals. As of 2019, it was the fourth-largest private bank in the UK, with £61 billion in assets under management.
The post Barclays Private Bank Executive Says Bitcoin Is ‘Almost Uninvestable’ appeared first on Cryptoknowmics-Crypto News and Media Platform.
from Live Crypto News – Cryptoknowmics-Crypto News and Media Platform
