Why are the world’s rich flocking to acquire cryptocurrency?

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Home »Economy» Why are the world’s rich flocking to acquire cryptocurrencies? January 2, 2022

A Wall Street Journal article highlights the change in attitude towards cryptocurrencies by investors who mocked or distrusted them.

  • US billionaire warns of the risks of ‘Bitcoin’ futures in capital markets

In 2017, Hungarian-American billionaire Thomas Petervi published a full-page ad in “The Wall Street Journal.” He warns there against the risks of “Bitcoin” futures contracts in the capital markets.

Today billionaire Peterfi, who has a fortune of $ 25 billion, has become so familiar with cryptocurrency that he recently said that “it is wise to have 2% to 3% of your fortune. personal cryptocurrency, just in case fiat goes to hell. “

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Peterfi already owns some of these cryptocurrencies, while his company, Interactive Brokers Group, has offered its clients the option of trading Bitcoin, Ethereum, Litecoin, and Bitcoin Cash, depending on the “urgency” of their clients.

Peterfi, who is 77, said his company “will offer the ability to trade around 5-10 other currencies starting in January.”

He added that “it is possible that cryptocurrencies could bring extraordinary returns”, although the reverse is also true, adding: “I think it can go to zero, I think it can reach a million of dollars, I have no idea. “

According to a report from “Bloomberg”, Peterfi’s approach highlights the changing attitude towards cryptocurrencies by investors who have ridiculed them or been cautious of them, but realized – especially in 2021 – that they could not miss the opportunity to make big gains with them. . Even though prices fluctuate wildly, investors big and small have passed out to Bitcoin and Ethereum, along with non-fungible tokens and other digital assets.

In turn, investor Ray Dalio recently revealed that he keeps Bitcoin and Ethereum in his wallet, just months after questioning the usefulness of cryptocurrency as a store of wealth.

The founder of the Bridgewater Associates hedge fund sees these investments as “an alternative currency in a world where money can become junk and inflation erodes purchasing power.”

For his part, the famous billionaire and American investor Paul Tudor Jones, revealed his investment in cryptocurrencies as a kind of hedge against inflation.

Half of the family wealth management offices that Goldman Sachs works with are also interested in adding cryptocurrencies to their portfolios, according to a recent bank survey.

big change

Pro Share launched the first bitcoin futures ETF in the United States, attracting over $ 1 billion in two days, before the flows subsided and the price collapsed since those flows began in last october.

Thanks to better performance, Quiz Base Global went public and now has a market valuation of $ 54 billion, and its founder, Brian Armstrong, has a fortune of $ 9.7 billion, according to the Bloomberg Billionaires Index.

Galaxy Digital fund manager Michael Novogratz said last month that prices could “drop sideways in the short term.” But he told Bloomberg there was a lot of “foam” in the markets in 2021, as retail investors crammed into non-fungible tokens and pursued extraordinary crypto investments.

Novogratz also predicted that Bitcoin would not fall below $ 42,000. And closed in 2021 at around $ 46.3 thousand, having recorded a record A-level amount of $ 66,000.

“There is a lot of money being pumped into this area, and it wouldn’t make sense for cryptocurrency prices to drop much lower,” Novogratz said.

Crypto Kraken CEO Jesse Powell acknowledges that prices could go down, but also said that “any move below $ 40,000 is a buying opportunity.”

Criticisms and fears

However, there is still a lot of skepticism on Wall Street and among the very wealthy.

Citdal chairman Ken Griffin described the cryptocurrency rush as a “jihadist appeal against the US dollar.” But he said his company would trade cryptocurrencies if there were more regulatory efforts.

For his part, JPMorgan Investment Bank CEO Jamie Dimon called Bitcoin “worthless.” It came at a time when the bank stepped up recruiting specialists to help clients trade cryptocurrencies. Dimon pointed out that the bank’s customers are “adults”.



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