Pension funds should start to allocate part of their funds in Bitcoin (BTC) if they want to remain profitable in the long term and if they want to achieve better results. This is according to Anthony Pompliano, the co-founder Morgan Creek Digital, who wrote a letter to investors explaining the importance of diversifying the portfolio and searching for more profitable investments.
Pension Funds Should Buy Bitcoin
Pompliano explained that the current low-interest rate environment is making it difficult for public pension funds that have been facing a wide range of issues in the last years. Indeed, he explained in this letter that they have been heavily underfunded.
This is why some fund managers are searching for ways in order to increase the value of their funds and continue to be profitable. Pompliano considers that using leverage is not necessary for pension funds, because they can simply add Bitcoin (BTC) to their portfolios. For Pompliano, it is necessary for these funds to just add between 1% to 5% allocation of Bitcoin.
Moreover, companies such as Bitwise have been exploring the impact that a small allocation of cryptocurrencies could create on a traditional 60% equity and 40% bond portfolio. Using Bitcoin, the portfolio’s risk-adjusted returns would have increased their earnings over time if they have properly rebalanced the portfolio.
Furthermore, Pompliano mentioned that Bitcoin is a $150+ billion asset that aims at becoming the next global reserve currency, something that can take place in the coming years. If that happens, the next decades will be certainly positive for Bitcoin and for those that invested in this crypto asset.
Bitcoin Moves ABove $9,400 What Do Experts Think?
Bitcoin has just moved above $9,400 and it has reached a market capitalization of $173 billion in the last 24 hours. However, we must pay close attention to volume and how it can change the way in which Bitcoin moves higher or lower.
In a recent conversation with UseTheBitcoin, Konstantin Anissimov, the Executive Director at CEX.IO, stated the following:
“An increase in volume that allows a daily candlestick to close below or above this critical zone will determine where BTC is headed next. Until this happens, waiting on the sidelines might be a good decision. Those who bet on the wrong side of the trend could potentially get wiped-out, so caution is a must.”
Bitcoin investors are waiting for a final break out of the $10,000 zone that would push Bitcoin towards new highs or at least local highs in the coming weeks and months.