Michael Novogratz Baffled By Bitcoin Not Being 1% Of Portfolio In $3 Trillion Hedge Fund Sector
Bitcoin became known all over the world after it reached $20,000 back in 2017. At that time, investors and individuals started to purchase and learn about the most popular digital currency in the market. Although in 2018 enthusiasts were waiting for the virtual currency to receive investments from institutions, these funds never entered the market as expected.
Michael Novogratz, an industry leader and Wall Street veteran, wrote on Twitter that he is not able to understand how big macro funds did not purchase 1% of the Bitcoin supply. He went on saying that even if hedge fund managers are sceptic about it, it seems a logical step to take. One of the hedge funds he was making reference to is Ray Dalio’s Bridgewater Associates.
Don’t understand why all the big macro funds out there don’t have a 1 percent position in $btc. Just seems logical even if your prone to be a skeptic. @RayDalio #goldproxy #animalspirits #greatriskreward
— Michael Novogratz (@novogratz) February 9, 2019
Novogratz mentioned that virtual currencies are known for having an asymmetric risk-return profile. That means that if an individual invests in virtual currencies they can lose their investment or have ten or hundreds of times more if the asset starts growing as it happened several times in the past.
If such large hedge funds start to purchase Bitcoin in bulk as Novogratz suggests, the price of the most popular digital asset could start to grow in the future. It is important to mention that Bitcoin has a maximum supply of 21 million BTC, thus, there is not enough Bitcoin for everyone that wants to purchase it.
Michael Novogratz is not the only investor and expert that believes that hedge funds and large investment firms should start looking into Bitcoin. Anthony Pompliano, the founder of Morgan Creer Digital Assets, said that every pension fund should buy Bitcoin. He clearly explained in a blog post why Bitcoin could help pension funds to have a better economic situation in the future.
According to the Twitter user, PlanB, a portfolio with 1% Bitcoin and 99% of cash has performed better than the S&P 500 over the last 10 years. He mentioned that it has a higher return, it includes a lower risk and it is a better risk/return investment.
1% #bitcoin + 99% cash allocation beats S&P500 over last 10 years:
– higher return
– lower risk (!)
– better risk/return, raroc etc
– including: 3x bitcoin "crash" -80% (2011, 2014, 2017)
– note: last 10 yrs was great for S&P500 (no -40% like 2002, 2008)#asymmetricbet #arbitrage pic.twitter.com/WQc1kt3RWO
— PlanB (@100trillionUSD) January 21, 2019
Alex Kruger, a recognized cryptocurrency expert and analyst mentioned that several macro funds consider Bitcoin a scam. Thus, before starting to talk about percentage allocation it is necessary to convince decision makers that the most popular digital asset is not a scam.
Many macro funds see $BTC as a scam.
Would you have had a position in Bitconnect if you thought could make you money worth your while, knowing it was a scam?
— Alex Krüger (@krugermacro) February 9, 2019
Currently, each Bitcoin is being traded around $3661 and it has a market capitalization of $64.19 billion.