Bitcoin Forecast: Asset Will be Held in Many Hedge Fund Portfolios

August 9, 2019 / by Crypto.IQ

Investors all around the world are becoming more and more interested in Bitcoin. In awe of Bitcoin’s “amazing run” in recent years, Don Steinbrugge, the CEO and Founder of Agecroft Partners, predicted that the cryptocurrency would become a staple in hedge fund portfolios.

In an August interview with CNBC, Steinbrugge described Bitcoin as “fantastic technology” and also praised the cryptocurrency as a hedge against inflation.

While describing BTC as “expensive” at the moment, he also admitted that it is very hard to value. He, however, predicted that Bitcoin has come to stay and will be a part of hedge funds’ portfolios in the long term.

Also discussed in the interview is the uncertainty emanating from the current trade wars and monetary wars that are just around the corner.

A lot of observers believe that the recent increase in the price of Bitcoin resulted from concerns raised by the ongoing trade wars between the United States and the People’s Republic of China. Now, the war is threatening to move over into monetary policies, stretching the economic uncertainty a bit further.

And as one would expect in times of financial insecurity, the values of Bitcoin and gold have increased significantly by the escalation in the trade war.

So, Steinbrugge is now among the investors and hedge fund managers who are already planning to integrate Bitcoin into their portfolios.

A report by crypto research firm CoinShares confirms this trend. In its 2019 H1 report, CoinShares states:

“Retail interest in Bitcoin is relatively tepid compared to 2017, and implies that the H1 rally was largely driven by the long-awaited entrance of institutional money. Some anecdotal evidence from the CoinShares sales division further supports this hypothesis.”

Bill Miller, the chief investment officer of Miller Value Partners, is also one of these investors. In 2017, he allotted 50 percent of his hedge fund to Bitcoin. According to Miller, this decision has fetched him 46% profits in the beginning half of 2019 alone.

In July 2019, UK-based Prime Factor Capital got the approval of the FCA (Financial Conduct Authority) to launch a cryptocurrency hedge fund, becoming the first financial company to do so.

As per the 2019 Crypto Hedge Fund Report by PWC, there are around 150 active cryptocurrency hedge funds, comprising $1 billion in AuM (assets under management) as a whole. These assets do not include venture capital funds and crypto index funds.