Cryptocurrency
The Wealthy Are Jumping Into Bitcoin as Stigma Around Crypto Fades
The Wealthy Are Jumping Into Bitcoin as Stigma Around Crypto Fades: (Bloomberg) Armbruester, the founder of Blu Family Office, a London-based investment firm for wealthy clients, dabbled in cryptocurrencies a few years ago. But the onetime investment banker, whose family made a fortune in metals and manufacturing, believes cryptocurrencies have earned a place in a […]
The Wealthy Are Jumping Into Bitcoin as Stigma Around Crypto Fades:
(Bloomberg) Armbruester, the founder of Blu Family Office, a London-based investment firm for wealthy clients, dabbled in cryptocurrencies a few years ago. But the onetime investment banker, whose family made a fortune in metals and manufacturing, believes cryptocurrencies have earned a place in a diversified portfolio. With Bitcoin surging more than 270% since its 12-month low in March, he’s ratcheting up his investments in the space and eyeing big gains.
“We’re now looking for trading opportunities in a very exciting field,” said Armbruester, who manages about $670 million for Blu Family Office, including his personal wealth.
“It tells us that Bitcoin has caught the attention and imagination of many people,” Larry Fink, chief executive officer of asset-management giant BlackRock Inc. and Rieder’s boss, during a virtual conference on Dec. 1. “But it’s still untested and a pretty small market relative to other markets.”
The last time Bitcoin skyrocketed in 2017, many wealthy investors largely stayed on the sidelines. The ersatz money was compared to the tulip mania during the Dutch Golden Age, and its utility as a money-laundering device in the digital underworld scared off many in mainstream finance. Warren Buffett called Bitcoin a “mirage” and Jamie Dimon said it was a “fraud” (although he later expressed regret for that remark).
Since then, Bitcoin has yet to prove it will truly become a form of universal money accepted around the world. And many affluent investors such as Armbruester believe alternatives such as Ethereum may ultimately prove more valuable. Moreover, cryptocurrencies are traded in an opaque market driven by rampant speculation and arcane technology rather than the easy-to-see fundamentals that drive stocks or bonds or commodities. And this week investors are getting a lesson in Bitcoin’s volatility, with the cryptocurrency skidding about 8.5% since Sunday.
Even so, affluent investors are giving Bitcoin a serious second look as it wins mainstream acceptance by influential players such as PayPal Holdings Inc. and Visa Inc., both of which are enabling account holders to use crypto. Miller is one of many traditional investors who’s noted that the stability of Bitcoin and its 12-year-old technology, blockchain, is bolstering confidence in its staying power.