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CME’s Chief Economist Relishes Bitcoin As Modern-day’s Diversification Tool
CME’s Chief Economist at the Chicago Mercantile Exchange (CME), Bluford Putnam seems to be optimistic on Bitcoin and other major cryptocurrencies. He considers such digital assets are to be worth for further investigation in modern era of financial market. He further appeared to be admiring the characteristics of bitcoin and how it can be conducive while highlighting the prevailing geopolitical and coronavirus threats.
He said in the economic perspective video on Finbold reports that, “If Bitcoin is not likely to correlate to economic factors, or to traditional equities and fixed income securities, then Bitcoin could serve as a portfolio diversification tool”.
“Since Bitcoin is highly volatile, only a very small allocation, say 2% of the portfolio, it might reduce risk if the lack of correlation holds,” Putnam further added.
Quite a few analysts might now reckon that people like Putnam and Anthony Pompliano who is Morgan Creek Digital Co-founder, are contemplating this asset class as a typical hedging idea amid lingering global risk exposures, where investors usually constructs their portfolio with 3:2 ratio with equities and fixed income assets. Conventionally, this proportion has delivered desirable yields and proven to be stable in value under various economic circumstances.
Well, although there have been different perspectives about cryptocurrencies, one should fairly understand the prime objective and the essentiality of pioneer cryptocurrency (bitcoin) was to generate fidelity and anonymous method of mobilizing funds efficiently, ever since then it’s been presaged as ‘digital gold’.
As the mainstream adoption perceives Bitcoin (BTC) as a non-correlated asset-class and carries scepticism,there have been mixed bag of stances revolving around cryptocurrency gamut. Right from the JP Morgan’s chief Jamie Dimon’s U-turn from his critic statement back in 2018, “cryptocurrency as a fraud, terming digital currencies as a novelty and worth nothing" to his confession after JP Morgan’s keenness of investment into blockchain and crypto-currencies.
Warren Davidson, perhaps crypto’s best friend in Congress, reintroduced the Token Taxonomy Act.
While the legendary investor, Warren Buffet had constantly bashed on Bitcoin and seemed reluctant investing in cryptocurrencies also called it as a rat poison.
While many crypto optimists are perceiving the current trend of bitcoin prices has ended corrective mode as they reckon that price trend of any asset class wouldn’t always be in bullish nor in bearish mode constantly. On that perspective, Mr.Peter Brandt, who is supposed to be a veteran trader was in the news for terming Bitcoin’s big slump in January of 2018, has taken aback from his previous stance and called BTC is likely to shoot up for $100,000 mark.
Amid such wavering opinions on crypto-space and contrary to the above adverse perspectives, CME appears to be constructive on crypto-space by introducing new derivatives instruments or by adding on constructive statements like Bluford Putnam’s standpoint on bitcoin and major crypto-assets.