Popular Gold Fund Considers Investing In Bitcoin
In the past year, Bitcoin has managed to rise above everyone’s expectations and managed to snub off every critic on its path to a glorious and historic journey. Result was that as the Bitcoin adoption turned more mainstream, several big financial institutions from the Wall Street could no longer hold themselves from being a part of this Bitcoin wave.
Looking to its bright and potential future, several big institutions like Goldman Sachs and CME Group are considering Bitcoin as one of the best trading instruments. The CME Group has also announced the first-of-its-kind cash settled Bitcoin futures contracts that are to start in the second week of December. Even off lately there have been news that the largest bank in U.S., JPMorgan - who’s CEO Jamie Dimon has been an open critic of Bitcoin - is also considering for possible Bitcoin future contracts looking to the increasing investor’s demands.
Now as per the latest reports from Bloomberg, the Old Mutual Gold and Silver Fund that is currently managing $220 million worth of metal equities is now considering Bitcoin as a potential investment option. As per the fund manager Ned Naylor-Leyland, it has decided to allocate 5% of its worth to cryptocurrency which translates to an investment of $11 million. The fund has already started to invest in Bitcoins from April this year and is said to convert most of the Bitcoin profits by re-investing it into gold and silver.
Naylor-Leyland said: “Bitcoin was explicitly designed to be digital gold. So if you’re going to have a small proportion of a fund in bitcoin, it should be in a gold fund, because that’s exactly the point. It’s about bringing the ownership of disciplined money into the modern world. Bitcoin is paving the way for the reintroduction of gold as global money.”
The Bitcoins intrinsic value proposition of a decentralized nature of operation without involving third-parties like banks makes it a value proposition for individuals and businesses who wish to have autonomy over their money. Additionally, it has the advantage of being backed by the blockchain technology, which aims at making instant cross-border payments at reduced costs.
Bitcoin has enjoyed an unprecedented rally this year with its price surging over 8 times and is currently trading around $8,200. In spite of a continuous bull run in the past month, many analysts believe that the steam is yet not lost and Bitcoin could possibly touch $10,000 before the year-end, a nearly 25% jump in price from its current value.
Prominent names from the industry like renowned billionaire investor Mike Novogratz is quite bullish on Bitcoin’s growth story and has started a $500 million crypto-hedge-fund to invest in several projects involving cryptocurrencies and blockchain.
Mr. Naylor-Leyland views Bitcoin as a way to educate investors rather than viewing it as a threat to precious metals. According to him, Bitcoin and Blockchain hold the potential to solve gold’s problems of ownership, divisibility and speed of transmission. Naylor is currently investing in Bitcoins through a Swedish-listed exchange-traded fund. He said: “We’re going to revert to sound money. If you imagine sound money and blockchain together, there’s quite an exciting potential outcome.”