Bitcoin at maximum: invest in cryptos, yes or no? - elEconomista.es
- Sarah Rivas
- Finect
The entry of investors such as Elon Musk with 1,500 million dollars, or investment banks such as JP Morgan, Morgan Stanley or BNY Mellon -without forgetting the announcement by PayPal or Mastercard that it will be possible to start using bitcoins as a means of payment- have contributed to revalue the cryptocurrency and make it more popular among retailers, who have believed they have found in it a new gold standard in the heat of the stratospheric injections of liquidity by central banks.
Yesterday, in the heat of the IPO of the Coinbase virtual currency trading platform, which will debut today with a valuation of more than 100,000 million dollars (84,000 million euros), the same as General Electric, Goldman Sachs or American Express, reached a new record by being above 64,000 dollars, which makes its value soar more than 1,000% in just one year. A level, which according to some analysts would fall short -very short-.
"As digital gold, it may already be putting pressure on gold metal prices today, so it should be worth $146,000," JPMorgan notes in a recent note. Moreover, some analysts predict that it could even reach $250,000.
But bitcoin isn't the only crypto living its gold. In fact, while this one managed to gain 101% in the first quarter, according to Valor Investe there are other options that have appreciated more than 1,000% . This is the case of Terra (Moon) which increased by 2,751.92%; Holo (HoT), with 2,551.49%; BitTorren, which accumulates an appreciation of 1,657%; Solana (SOL), whose revaluation was 1,184.58%; or DOGE, with 1,051.70%.
But are cryptocurrencies a recommended asset for all investors? For Francisco Martínez Márquez, financial advisor at Andbank, present on the Finect advisors platform, the answer is simple: "No, not even for part of the portfolio." Your reasons? First, that its high volatility is incompatible with price stability. "This makes it difficult to use it as a means of payment. How to value a currency that in a week can be worth +/- 50%?", He affirms. And he exemplifies: "Imagine paying your house in three months with Bitcoin. A bargain or the worst deal."
Second, because of the great regulatory risk it presents. "There is no regulation and that could be a problem if there were finally one. There is an opacity that is incompatible with the current fight against money laundering and the financing of terrorism. For years, world authorities have been moving in this direction. And this raises doubts in the valuation; How do we value something unregulated? If this regulation finally arrives, one of the attractions of cryptocurrencies would disappear, "he says.
And third, the great bubble that exists around cryptocurrencies. "Bubbles know when they start, but not when they burst," he says. An opinion shared by 74% of global managers, according to the latest Bank of America survey.
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For Martínez Márquez " if what really counts is the technology behind it (Blockchain), it is better to invest directly in the companies that develop it . This is already more tangible and easy to assess. In fact, it is an investment theme that in the last year has provided good returns, with thematic funds specialized in Blockchain", he says.
An example of this is the BNY Mellon Blockchain Innovation Fund, whose strategy consists of investing in companies around the world that enable or use the blockchain and that are key players in this ecosystem. Its one-year revaluation is 90%, while this 2021 adds 16.17%.
Martínez Márquez's opinions are not far from those shared by the CNMV together with the Bank of Spain this February, when in a statement they warned about the risks of investing in this type of asset and highlighted its lack of legislation, its inability to be used as money legal tender, and its extreme price variations.
Along these same lines is Mario Rappanello, head of Treasury and Allocation Advisory at Banco Mediolanum. " We do not know what will happen in a few years. Today, we cannot consider bitcoin as an investment due to the limited transparency of its real guarantees . Its limited liquidity makes it a speculative tool and its high volatility prevents it from being able to be used as a currency," he says.
An option for part of the portfolios?
These same reasons are what lead Adrián Viturro, financial advisor at Inversimply and the Finect platform, to discourage his investment within their portfolios. "Predicting its evolution is almost impossible, so trying to achieve a savings goal with cryptocurrencies is not a solution," he says. Of course, in his opinion, "to speculate and obtain the maximum possible return if it can be a good option."
Similarly, Borja Nieto, co-founder of MiCapital and financial advisor also of the Finect platform, does not reject that his clients have a small part of their portfolios invested in Bitcoins. "If they believe that they can protect themselves against massive injections by the Central Banks because they see it as the new gold, or because they believe that the debt is going to continue to rise and they will not be able to pay it, why are they not going to invest? a piece of wallet? he argues. Of course, he emphasizes that it must be a small part and that it is clear that it would be about speculating, and before with Bitcoins than with any other crypto because it is the most consolidated and the best valued.
Now, what percentage to invest? Research by Robeco's Multi-Asset team suggests that bitcoin can be used with a 1% allocation in a well-diversified standard multi-asset portfolio, provided certain risk controls and a strict portfolio management process are in place.
"As digital gold, bitcoin has a monetary value. In our opinion, the debate about the lack of intrinsic value of bitcoin is generally irrelevant. Like diamonds, works of art, stamps or the dollar, bitcoin it does not generate cash flows. However, all of these asset classes have monetary value, and most are considered stores of value," says Jeroen Blokland, Head of Robeco's Multi-Asset team. And he recalls that recently Jerome Powell, chairman of the US Federal Reserve, referred to bitcoin as an alternative to gold rather than the dollar actually.
