Thursday, October 5, 2017

Could Bitcoin and other cryptocurrencies one day soon become a vital part of mutual funds and your retirement portfolio?

On Oct. 4, the CEO of the Bitstamp cryptocurrency exchange spoke to a group of portfolio and asset managers on the potential of Bitcoin one day soon becoming an intrinsic part of their clients investment portfolios.  In addition, he laid out the potential for how cryptocurrencies could also become a vital asset in mutual fund allocations and individual retirement portfolios.

Dan Morehead, chairman of digital currency exchange Bitstamp, said bitcoin and other digital currencies will likely become assets serious investors will want in their portfolios.
"Bitcoin's essentially going to revolutionize currency, or money," Morehead said on Wednesday at the Sohn Investment Conference in San Francisco, which was attended by portfolio managers and asset allocators. 
"If it does work, the upside is so high, it's a rational, expected thing to have in your portfolio," he said. 
Morehead said he considered those blockchain-based tokens to be protocols, a system of rules similar to HTTP and others that enable the internet to exist as it does today.
Right now, those protocols may run the internet, but most of the profits are going instead to the applications, such as Google's Gmail, which are built on top of those protocols.
In contrast, Morehead said that in a blockchain-based world, the protocols such as bitcoin take 95 percent of the earnings, while the "application," such as the digital currency exchanges, take a smaller share of the profits. 
"Only a tiny bit is in the companies," he said, pointing out that cryptocurrency exchange Coinbase only has a valuation of about $1.5 billion, compared with bitcoin's more than $70 billion market capitalization. 
That has a "very interesting implication for investing," Morehead said. - CNBC
While Bitcoin is seen by some as a currency, and by others as a speculative investment, a multitude of of other cryptocurrencies are being created with intrinsic ties to companies and products.  And through use of the Blockchain and Initial Coin Offerings (ICOs), investment in these new companies may only come through ownership of their cryptocurrencies, rather than within the current system of owning stocks and other equities.

Cryptocurrencies are still in the 'Wild West' phase of integration as innovations on the Blockchain are just now in their infant stages.  And even if investors and retirees are not comfortable with cryptos like Bitcoin due to their being associated with little more than confidence, there will be plenty of opportunities to invest in the cryptocurrency sphere by investing in companies and innovations that are placing their opportunities in tokenization rather than through stocks.


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