Real Vision CEO and macro guru Raoul Pal is revealing his cryptocurrency investing strategy amidst bearish sentiment in the markets. Pal tells his 828,300 Twitter followers that he has not booked profits by selling any of his crypto assets and instead is adding to his holdings. The macro guru also says he has set up […]
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Bloomberg’s head commodity strategist says the crypto markets look poised for a bullish 2022, with Bitcoin and Ethereum set to lead the charge. In the December edition of Bloomberg’s “Global Cryptocurrency Outlook,” Mike McGlone says that given crypto’s relative outperformance of other asset classes, many money managers may be forced to get involved. “Past performance […]
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Russia’s central bank has voiced opposition to the provision of financial services related to cryptocurrencies. The monetary authority believes such offerings would go against the interests of Russian investors as they are highly risky. Central Bank of Russia Unwilling to Allow Financial Services for Crypto Assets The Central Bank of Russia (CBR), known for its […]
Changes meant to postpone the introduction of a tax on virtual assets such as cryptocurrencies in South Korea have been approved by an important parliamentary committee. The draft legislation seeks to delay Seoul’s plan to impose a 20-percent levy on gains from crypto transactions. Ahead of Election, Major Parties Support Tax Break for Crypto Investors […]
A former Citigroup executive is shaking up the crypto investment space with a $1.5 billion venture, partnering with a leading layer 1 altcoin project. Hivemind Capital Partners is an investment firm founded by Matt Zhang, a 14-year Citigroup Inc veteran. In a press release, Zhang announces Hivemind’s mission to provide solutions to early blockchain entrepreneurs through […]
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The study also concluded that temporary crypto market decline and volatility are not enough to diminish the importance of cryptocurrencies in investment portfolios.
Allocating funds to crypto investment positions has been shown to have a positive impact on the performance of diversified investment portfolios.
According to a research study by crypto asset management outfits Iconic Funds and Cryptology Asset Group, the ability of crypto investments to positively impact the performance of investment portfolios cuts across several asset allocation models.
This ability to improve the profitability of diversified investment portfolios is even despite the volatility of cryptocurrencies, especially the recent market crash that occurred in May.
The research study titled: “Cryptocurrencies and the Sharpe Ratio of Traditional Investment Models” examined changes in the risk-return profile of several portfolio allocation methods due to the addition of cryptocurrency assets.
This risk-return examination was conducted via measuring changes in the Sharpe ratio — the measure of excess returns earned for holding a volatile asset — when crypto positions were included in the different asset portfolio models.
With crypto supposedly an uncorrelated asset class, the risk-reward performance of investment portfolios should improve with the addition of cryptocurrencies despite their apparent volatile price movements.
By assuming a passive investment strategy, the study mapped the changes in the Sharpe ratio for traditional portfolio models with the introduction of crypto exposure against a reference index with no cryptocurrency allocation.
To investigate the impact of increasing the crypto positions for each portfolio model, the study also rebalanced the cryptocurrency allocation on a 1%, 3% and 5% basis.
Detailing its findings, the study stated: “This report finds that the addition of cryptocurrencies to any portfolio covered had a positive impact on the returns as well as the risk-reward performance of the portfolio,” adding:
“This finding holds despite a significant correction in the crypto markets during the beginning of 2021. Furthermore, the addition of more cryptocurrencies led to even higher returns.”
According to the document, the results of the 2021 study also lend credence to the conclusions drawn in the 2020 research that showed the positive impact of crypto allocations to investment portfolios despite the market crash of mid-March (Black Thursday).
Related: Mr. Wonderful’s crypto allocation is now larger than his gold holdings
Crypto exposure is becoming a significant trend among institutional investors. As previously reported by Cointelegraph, a recent Bank of America report showed 20 major public companies in the United States having significant digital asset-based investments.
Back in September, a survey by European investment management outfit Nickel Digital Asset Management stated that 62% of global institutional investors with zero crypto exposure will begin making forays into cryptocurrency and blockchain within the next 12 months.
The historic magazine The Economist is giving Bitcoin high praise, saying that the crypto holds attractive investment advantages over other assets. A recent article from the 178-year old magazine says that Bitcoin’s low correlation with traditional markets makes it a potentially excellent source of diversification. The article leads with a quote from Nobel Prize winner Harry […]
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Ameer and Raees Cajee, the two directors of the South African crypto-investment platform, Africrypt, are set to participate in an inquest that seeks to seal the fate of the collapsed firm. The Death Threats According to an Itweb report, the Cajee brothers — who have agreed to testify on October 19 and 20 — will […]
Jim Cramer, the host of CNBC’s Mad Money thinks Coinbase is the “natural repository of crypto” and has recommended buying the stock.
Jim Cramer, the host of CNBC’s “Mad Money” has recommended buying Coinbase stock, and suggested that 5% of investment portfolios should be allocated to cryptocurrency.
Cramer made the comments in the Lightning Round on Aug. 25 in response to a caller who asked whether buying Coinbase stock was a good way to get crypto exposure. The 66-year-old finance personality stated that while Coinbase’s listing went “very poorly” he views it as a big player in crypto:
“I think Coinbase is inexpensive. I don’t really care for management because I think they let out a lot of stock when they started. I was against that. They should’ve been buyers, not sellers. I think the listing went very, very poorly. I think the company is the ... natural repository of crypto.”
Coinbase Stock (COIN) stock has seen a lackluster performance since its listing on the Nasdaq exchange in mid-April. At the time of writing, COIN is sitting at $248, down 27% from it's all-time high of $340 on April 16.
However, the firm had a strong performance last quarter with its Q2 report posting net profits of $1.6 billion, compared to $32 million in Q2 2020.
Cramer added to his comments by suggesting that direct exposure to crypto should also be an option for investors:
“I own Ethereum directly. I think you should have up to 5% of your portfolio in crypto. I am a believer in crypto.”
The CNBC host is a former hedge fund manager and co-founder of financial news website TheStreet.com. While Cramer has remained relatively consistent on Ethereum (ETH) lately, he has had an on-again-off-again love affair with digital gold since he first bought Bitcoin (BTC ) back in December 2020.
In fact, he’s all over the place. In the middle of a crypto downturn in June, Cramer urged investors to be “patient” with BTC — but ten days later his patience ran out and he boldly claimed that BTC is “not going up because of structural reasons,” and revealed:
“Sold almost all of my Bitcoin. Don’t need it.”
In March, Cramer bullishly stated that BTC made him a “ton of money” while his investments in gold and stocks had let him down. In April he stated that he had cashed out 50% of his “phony money” BTC to pay off his mortgage.
Cointelegraph reported on May 5 Cramer said he owned “a lot of Ether” after he initially bought the asset to bid on a Time Magazine NFT.
Related: Auditors reveal USDC backing as Jim Cramer sounds alarm over Tether’s mad money
Big Four auditor KPMG says that institutional investors put a “significant amount” of money into blockchain and cryptocurrencies during the first half of 2021. In a new report, KPMG says growing institutional investor participation is part of a widespread increase in the awareness of crypto assets and the digital asset industry at large. “As the […]
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