CIO To bam: It's Much Safer to Invest $25,000 in Bitcoin than $1 million in the S&P 500
Bitcoin "undoubtedly" has a place as a portfolio diversifier and has the potential to become a "standard measure of value" similar to how fiat currencies are used to determine the value of goods and services around the world. This opinion was expressed by the investment director of the manager with assets of $ 10 billion Tobam, Yves Shueifati, in a conversation with Financial News.
"If you have not held bitcoin, then you have no idea about the risks. He is unique. The claim that this is too risky an asset is meaningless. If an asset, in your opinion, is 10 times more risky, you invest 10 times less in it. It is much riskier to invest $1 million in S&P than $25,000 in bitcoin," he said.
Shueifati and his colleagues became interested in bitcoin in 2013 at a rate of about $ 500. Once a month, they gathered in a pizzeria to discuss cryptocurrencies, paying tribute to Laszlo Hanec, who in 2010 exchanged 10,000 bitcoins for two Papa John's pizzas.
In 2016, Shueifati drew the attention of partners to the fact that the liquidity of bitcoin has grown to such an extent that they can offer investments in it to the largest of their clients. Subsequently, they received permission from the French regulator and in 2017 opened the world's first bitcoin fund with free access for professional investors.
According to Shueifati, the fund's clients include family capital management firms that are attracted to bitcoin by the benefits of diversification, despite its volatile nature.
"This is the only asset that often shows volatility above 100% and survives. Even Lehman Brothers had volatility below 100% in the week of bankruptcy. It's like chlorine - a combat gas, very dangerous. But if you add three drops of chlorine to the water, it will be drinkable water. Bitcoin is the same. If you invest from 1 to 3% of a well-diversified portfolio in it, its diversification will grow even more, and the risks will decrease," the investor added.
Shueifati believes that in terms of the availability of investments in bitcoin, Europe lags behind the United States, where the first futures ETFs were recently launched.
"The spread is happening, but not among retail investors, but at the systemic level in the United States. The problem is that in Europe, the spread takes time. Bitcoin is a breakthrough innovation. Suppose you want to add gold to your portfolio. You will not buy gold bars, but buy an ETF. There is a financial system between gold bars and those who want to take risks. Bitcoin can be bought on the stock exchange – the exchange is located between bitcoin and those who want to take risks," he concluded.