Morgan Creek CEO: If Bitcoin accounted for 1% of the portfolio over the past five years, it could outperform all portfolios.

Mark Yusko, CEO of Morgan Creek Capital, said in an interview with Max Keizer in a Keizer report released on January 30 that Bitcoin (BTC) represents an investment in technology and innovation, making it an investment in any portfolio. necessary.


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Morgan Creek CEO: Bitcoin exposure boosts portfolio

Keizer first pointed out that even if the Bitcoin risk exposure in the portfolio is only 1%, its alpha value is higher, in other words, it has outperformed almost everything in the past five years.

By definition, alpha is the performance of the portfolio relative to the benchmark. Portfolio managers seek to generate Alpha by diversifying their portfolios to eliminate non-systemic risks.

"It's incredible," Yusko said. "If you invested 1% of all donations and foundations in bitcoin five years ago, that would be $ 6.7 billion of $ 670 billion. You only used one percentage point (half from stocks and half from bonds), then you can The return will not be 7.2%, but 9.2% or 200 basis points. "

However, although he acknowledges that the price of Bitcoin is non-zero, the probability is zero, but he also pointed out that Bitcoin has ten to one downside. According to Yusko, this makes Bitcoin one of the most asymmetric assets he has seen in his career.

He also suggested that traditional funds seeking risk exposure will become more common and continue:

"So ten years later we will not go back and say that as a trustee of pension funds, sovereign wealth, family offices, etc., the idea that you have to access the asset is crazy."

Bitcoin shows staying power as an asset class

There is indeed more and more evidence that Bitcoin is becoming more and more acceptable to investors, especially because the price of BTC is currently hitting the $ 10,000 mark.


The monthly performance of the cryptocurrency market. Source: Coin360

As the volume of bitcoin trading and positions on the Chicago Mercantile Exchange (CME) rises, new institutional investment products, let alone outperforming Amazon stocks and gold, have become more attractive to investors.

Yusko pointed out that, of course, many fund managers still see Bitcoin as some kind of scam or scam, rather than what he refers to as a true technological evolution in which Bitcoin will play a basic role as a base layer protocol.

Keiser: "You own part of the agreement"

But while both Keizer and Yusko agree that most cryptocurrencies will fail, Bitcoin and a few other cryptocurrencies may offer a completely different opportunity than technology stocks in the Internet age.

"Agreements are applications," Keiser said. It's the equivalent of buying stocks in the 1990s with the opportunity to buy email concepts. He continued:

"With Bitcoin, you have a chance. You have the dominant agreement."

As Cointelegraph reported last month, bitcoin's rate of return has dwarfed all other assets over the past decade, approaching 9,000,000%. However, so far this year, BTC is not even the best performing asset. Tesla shares have risen 38% to date, while Bitcoin is only 30%.

In October last year, investment management company VanEck published a report explaining why Bitcoin can improve the performance of investors' portfolios, and one of the main reasons is the low correlation between BTC and traditional assets.