It’s always pleasurable to see a one-time bitcoin skeptic get turned into a believer, and that appears to be the case with Inigo Fraser-Jenkins, the co-head of portfolio strategy at Bernstein Research.
Fraser-Jenkins: I See BTC Differently, Now
In a recent note to his clients, he has commented that everyone needs to make room in their portfolios for bitcoin and other cryptocurrencies. What’s the big clincher? Fraser-Jenkins was once a bitcoin skeptic, but he now appears to be far more open-minded about the subject. His note even reads:
I have changed my mind about bitcoin’s role in asset allocation.
While he believes that bitcoin is on a solid run (the currency has recently spiked beyond the $19,000 level), he says that it’s primarily the coronavirus pandemic that has caused him to change his thoughts and ideas regarding bitcoin. As it turns out, the virus has changed many things throughout the world from policy environments to debt levels and diversification opportunities for traders. As a result, he sees bitcoin as one of the strongest assets available today.
He’s confident that many countries are going to see their native currencies fall to record lows in the coming months. Thus, people and economies alike will be subjected to inflation and other harsh circumstances that could put huge dents in monetary policies everywhere. He also believes that most people will be subjected to tax increases. This will contribute to a much larger demand for bitcoin and assorted altcoins.
However, he also commented that bitcoin will likely come with a downside… A downside in the form of government. He commented that regulators will likely try to take advantage of the looser environments bitcoin will probably create, and people need to be aware so that they don’t fall behind. He mentions:
The greater role that governments will likely play in economies makes crypto potentially more appealing. These very same forces also may hinder crypto. If they get in the way of policy implementation, then governments might seek to constrain them.
He did mention, though, that governments are not all that likely to outlaw cryptocurrency. He says that the process for doing this would be too complicated, and furthermore, cryptocurrency – while popular – is still rather small when compared with the likes of stocks, gold and cold hard cash. Thus, it’s not likely to make a huge difference in the way monetary systems operate, which could mean that many governments won’t pay too much attention to them.
Volatility Isn’t As Common
The attractions of cryptos are what also make them potentially an annoyance for policymakers. Cryptos do have a place in asset allocation… so long as they are legal.
Fraser-Jenkins says that one of the big things that contributed to him changing his mind about bitcoin’s status is the fact that its volatility has significantly decreased in recent months.