In an opinion article published in Bloomberg Law, Aaron Brown argues that even those most skeptical about cryptocurrencies should soon buy Bitcoin. This is what the former director of research at AQR Capital Management said in his explanation “It is safer to have a small allocation in Bitcoin than to ignore it”.
The text seems to be a clear message to big names who continue to avoid cryptocurrencies. Early on, Brown mentions that Bitcoin has evolved a lot in recent years, but most investors still don’t consider it an asset to invest in.
“Bitcoin has more than enough upside potential to attract investors, and its volatility no longer appears to be a disqualification. Issues such as safe custody, tax treatment and legality appear to have been largely resolved.”writes the executive branch.
“But correlations with other major assets – especially stocks, currencies and gold – have been unstable, making it difficult to adapt, like a left-handed dinner guest.”
In other words, Brown believes that Bitcoin’s unpredictability is the only reason why some investors have not yet surrendered to the asset. However, he believes this will change soon.
Without exposure to Bitcoin, you won’t get Bitcoin’s profits, the director says
Jamie Dimon, CEO of JPMorgan, recently stated that if he were the government, he would shut down Bitcoin. However, your bank has already established a cryptocurrency laboratory and its analysts regularly publish studies on Bitcoin. In other words, even the most critical people cannot avoid the crypto sector.
For Aaron Brown, this trend should accelerate soon, with the approval of ETFs being the biggest news the market is waiting for. In addition to generating greater demand, it is also about the legal legitimization of an asset that has lived on the margins of the financial system for years.
“We are close to the moment when even the most traditional investors, who are generally skeptical of cryptocurrencies, would have to accept that it is safer to have a small allocation in Bitcoin than to ignore it.”
Finally, he mentions that “cryptocurrencies can still reach zero,” but that they have “enough potential to leave a portfolio out of balance if there is no exposure” to these assets.
Elsewhere, the former research director at AQR Capital Management states that years ago he estimated that cryptocurrencies would be equivalent to 3% of the global economy and has since kept 3% of his capital in cryptocurrencies.
Winter and summer of cryptocurrencies
At one point in history, the cryptocurrency bear and bull markets were nicknamed winter and summer, respectively. In his text, Aaron Brown summarizes well how this cycle works.
“In the summer of cryptocurrencies, a lot of money comes in, but many people also withdraw at least some profit. Moreover, people use Bitcoin to move from one cryptocurrency project to another.”wrote the director. “In the winter of cryptocurrency, there is little flow in either direction, and therefore little demand for Bitcoin financial services.”
With Bitcoin up 165% and several altcoins showing big gains in 2023, we can say this is summer. Due to the possible approval of spot Bitcoin ETFs in the US, a likely Fed rate cut and a halving next quarter, it is possible that this season will be a long one.
Therefore, even the most critical people should take advantage of this opportunity. A living example of this already happening is Steve Weiss. Speaking to CNBC last month, the chief investment officer of Short Hills Capital Partners stated that he doesn’t believe in Bitcoin but is still buying it.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
