BlackRock Warns Users of Crypto Investing Risks

American global investment management corporation stated that the nature of cryptocurrencies makes them tricky investment targets
27 February 2018   1038

BlackRock is an American global investment management corporation based in New York City, and one the world's largest asset managers guiding individuals, financial professionals and institutions in building financial futures.

On February 26, BlackRock has released a global weekly commentary entilted "Sizing up the crypto craze", elaborating on such key points as:

  • Cryptocurrencies could gain wider appeal over time, but we see them as far from earning a place in mainstream investment portfolios for now
  • The Federal Reserve expressed greater confidence in both its growth forecast and inflation outlook, sending U.S. government bond yields up
  • Germany’s Social Democrats are expected to approve a coalition government, despite rising chances of a no vote, Italy goes to the polls

The report was presented by Richard Turnill. On the one hand, the study states that cyptocurrencies are gaining wide populary and becoming mainstream nowadays, but, on the other hand, crypto markets are highly volatile, fragmented, largely unregulated, and come with unique liquidity and operational risks.

The volatility of the cryptocurrencies makes the gyrations in the U.S. equity market during the global financial crisis almost look placid.
 

Richard Turnill

Global Chief Investment Strategist, BlackRock 

The study claimed that blockchain and cryptocurrencies surely have the bright future in front of them, but they still remain risky in terms of investment, and for now only "those who can stomach potentially complete losses" can consider investing in crypto. Moreover, blockchain technology needs to develop much more and undergo significant changes to be able to reach the heights many believe it is really capable of reaching.

Bitcoin May Pass Gold Market Cap, - Novogratz

Mike Novogratz continues to be Bitcoin and cryptocurrency optimist 
25 March 2019   106

The founder of Galaxy Digital, Mike Novogratz, expressed the opinion that over the next 20 years, Bitcoin’s capitalization would “easily” surpass the gold market, currently estimated at $ 7.5 trillion. It is reported by The Daily HODL.

In a conversation with the founder of Morgan Creek Digital, Anthony Pompiano, Novogratz stressed that the inflow of institutional money to the cryptocurrency market is only a matter of time, and major players like Goldman Sachs and the Intercontinental Exchange (ICE) are already mastering a new industry.

I know Goldman for instance is gearing up around securities tokens. They’re not doing anything yet, but they’re getting really ready and looking at all the questions on – where would you store them? Do you have to build your own custody, or can you use someone else’s custody? How to get them to work.
 

Mike Novogratz

Founder, Galaxy Digital

According to him, the growth potential of Bitcoin is strong and therefore it is advisable for investors to include the first cryptocurrency in their portfolios:

I think the macro case for [Bitcoin] is pretty strong. And so, if you can put a couple percent of your portfolio in, there’s a decent chance it catches wind. Fidelity is just getting set up. Bakkt continues to get delayed a little bit, but it’s not going to be delayed forever. They’re going to be in the game. And there’s lots of other players coming.
 

Mike Novogratz

Founder, Galaxy Digital

According to him, the volume of the gold market is $ 7.5-8 trillion and in order to outperform this market, the first cryptocurrency needs to grow in price at least 100 times.

Gold’s got an $8 trillion market cap, or a $7.5 trillion market cap. And so, we’re 100x off on that. We’re not going to get there in Bitcoin in the next year or two. But over a 20-year period, could that happen? Easily. Easily. And that’s giving zero optionality to all the other stuff. And so I think it seems like a pretty smart portfolio bet.
 

Mike Novogratz

Founder, Galaxy Digital

The founder of Galaxy Digital also touched on the topic of bitcoin futures.

The reality is, the CME kicked their butts. And these guys have limited resources on what they’re going to spend their focus, and they decided to spend it elsewhere. Finding leverage in Bitcoin is going to get easier as the architecture in the space gets better. You’re already seeing the lending market around Bitcoin went from 10% to like 3%. So once you can borrow you can short. And so now it’s not so hard to short Bitcoin. It used to be almost impossible to short Bitcoin in 2016… It wasn’t great, but it’s not critical. 
 

Mike Novogratz

Founder, Galaxy Digital

In February Mike expressed the opinion that, thanks to institutional money, Bitcoin will reach $ 8,000.