Financial Times – Asset Managers are Loving Crypto Again

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The Financial Times has claimed that “financial markets are cosying up once more to crypto” in a sign that the tide of sentiment could be turning. Citing a healthy 2019 performance from crypto funds and an improvement in regulatory oversight, the traditionally crypto-skeptical paper is suddenly bullish going into 2020.

Crypto Back on the Menu for Profit-hungry Hedge Funds

The Financial Times points to an improved 2019 performance by crypto funds over traditional hedge funds (16% compared to 10.4%) as a reason why crypto is suddenly back on the menu for traditional traders and investment funds, noting Bitcoin’s return to form and increased activity from regulators to shore up the space:

Institutions such as banks and asset managers have long had a vexed relationship with cryptocurrencies, put off by reputational risks, lack of regulation and volatile returns. But a spell of better performance is drawing them deeper in.

The article also refers to a Deutsche Bank report published last month that predicts a rapid rise in the adoption of cryptocurrency, as well as the potential erosion of the supremacy of the US dollar due to the imminent introduction of a digital Yuan. These factors, and more, are causing major investment firms to look more seriously at cryptocurrencies such as Bitcoin in an investment sense, buoyed partly by the asset’s performance during the coronavirus outbreak, which has seen major traditional stocks slide.

Bitcoin Has “Three to Five Years” of Opportunity Left

The article quotes various hedge fund managers as being bullish on cryptocurrency in the short term, with one claiming it is “only a matter of time before traditional banks get involved” and another predicting that “there’s a good three to five years of very, very profitable trading” before Bitcoin becomes so mainstream that its famous volatility starts to be ironed out.

The Financial Times is famously anti crypto, with their Alphaville section in particular having it in for the space on a regular basis, so for them to be suddenly bullish on crypto’s potential could suggest that even the biggest bears are starting to pull on their bull costumes.