VanEck report recommends Bitcoin to increase investment revenue according to a news report by Cointelegraph. It strongly suggests that Bitcoin can help improve investment portfolios if even a small percentage is invested in Bitcoin and cryptocurrency.
VanEck is a global investment manager with offices around the world. Founded in 1955, VanEck became one of the first U.S. asset managers to offer investors access to international markets.
Many in the crypto community have high hopes for Bitcoin as an investment asset. As Cointelegraph reported earlier, founder and partner of crypto venture capital fund Morgan Creek Digital suggested that Bitcoin recently reaching $10,000 is just the first step in its way towards $100,000 by 2021.
Highlights of the Report
Bitcoin as a Potential Store of Value
- Understanding the differences between monetary and intrinsic value
- Bitcoin’s combination of durability, scarcity, privacy, and its nature as a bearer asset all contribute to it holding monetary value
- Bitcoin is on the path to becoming digital gold
- So why don’t institutional investors own bitcoin?
To determine if Bitcoin has value, it is important to start with understanding the two types of value
Intrinsic Value (IV): Value that exists because an economic good produces cash flow or has overt utility: equities, fixed income, real estate, and consumable commodities (corn, oil, etc).
Monetary Value (MV): Value that exists in spite of an economic good not having intrinsic value or value that exists in excess of an economic good’s intrinsic value
Bitcoin’s Role in an Investment
If Bitcoin is increasingly used as an asset with monetary value both on-chain and off-chain, then how might one think of it as an investment? Several theories exist that point to increasing scarcity and Network Transfer Value as some of the drivers for historical Bitcoin growth. Bitcoin historical performance and how that could fit into an investment portfolio.
A report published by investment management firm VanEck on Jan. 29 suggests that institutional investors should allocate a small percentage of their capital into Bitcoin (BTC). Per the report, “Bitcoin may enhance the risk and return reward profile of institutional investment portfolios.” The researchers also claim:
“A small allocation to Bitcoin significantly enhanced the cumulative return of a 60% equity and 40% bonds portfolio allocation mix while only minimally impacting its volatility.”
Today, VanEck offers active and passive strategies with compelling exposures supported by well-designed investment processes.The firm’s capabilities range from core investment opportunities to more specialized exposures to enhance portfolio diversification. The actively managed strategies are fueled by in-depth, bottom-up research and security selection from portfolio managers with direct experience in the sectors and regions in which they invest. Investability, liquidity, diversity, and transparency are key to the experienced decision-making process around market and index selection underlying VanEck’s passive strategies.
Since their founding in 1955, putting clients’ interests first, in all market environments, has been at the heart of the firm’s mission.
VanEck report recommends Bitcoin to increase investment revenue. This suggests that more serious investors are considering Bitcoin a serious addition to the list of commodities. Hopefully, others will follow suit.