Institutions Warm to Bitcoin (BTC), Stone Ridge Acquires $115 Million Worth of BTC, Fidelity Sees It As An Alternative Investment
An increasing number of institutions are warming up to Bitcoins these days. On Tuesday, October 13, Stone Ridge Asset Management said that they have acquired over 10,000 BTC amount to over $100 million in total.
Stone Ridge is an institutional asset management giant for institutions, insurance companies, and financial advisors managing over $10 billion worth of assets in total. In the official press-release, Stone Ridge mentioned that the BTC purchase happened through its digital assets subsidiary New York Digital Investment Group LLC (NYDIG).
NYDIG offers a complete suite of brokerage, treasury, and technology solutions for Bitcoin, to its institutional clients. Robert Gutmann, co-founder and CEO of NYDIG, said:
"As Bitcoin transitions to a predominantly institutionally-owned asset, NYDIG is better positioned than ever to be the leading provider of Bitcoin solutions to corporations, institutions, and banks. We are proud to have facilitated one of the largest commitments of treasury assets to Bitcoin announced to date, and see demand for our full suite of corporate treasury and investment solutions accelerating.”
NYDIG joins other big players like Square and MicroStrategy who invested huge amounts this year. Last week itself, Square announced a $50 million investment pouring 1% of its total portfolio in the crypto asset. Also, MicroStrategy has invested around half-a-million dollars in Bitcoin this year.
NYDIG executive Chairman Ross Stevens said: “NYDIG's corporate treasury solutions will be invaluable to other companies as they follow suit adopting the Bitcoin Standard for part or most of their treasury strategy. As the Fed's balance sheet has increased $3 trillion since the beginning of 2019, the U.S. dollar has depreciated 70% against BTC.”
Fidelity Digital Assets, the crypto-focused arm of Fidelity Investments released its latest report stating that Bitcoin holds no correlation with the returns produced by other asset classes like stocks and gold.
The report goes on to mention that allocating 5% of your multi-asset portfolio to Bitcoin can reap greater returns over the period of time irrespective of market conditions. “Consider a portfolio with a target allocation of 5% bitcoin,” the firm said.
Fidelity Digital Assets advises rebalancing the portfolio by selling BTC in case Bitcoin’s allocation jumps over that mark. Similarly, one can buy if the Bitcoin allocation drops below that mark. “An advantage of rebalancing is that it forces investors to have the discipline to buy low and sell high,” said Fidelity.
Earlier in August 2020, Fidelity Digital Assets applied for a new Bitcoin Investment Fund. In its concluding statement, the report notes: “Bitcoin is a unique investable asset with compelling differences relative to traditional asset classes as well as conventional alternative investments that could make it a beneficial addition to a portfolio”.