New Zealand hedge fund NZ Funds Management, which had $350 million in assets under management at the end of December 2020, said five per cent of its funds were invested in bitcoin. According to James Grigor, managing director of the company, bitcoin will also be included in more of Kiwisaver’s investment programs over the next five years.
You cannot buy bitcoins at a discount
As a local report explains, bitcoin did not become available for purchase until October 2020, when a change was made to the offering documents. Meanwhile, Grigor justified the takeover:
Bitcoin has become a commodity, with many of the attractive characteristics of gold, which investors often bought during the economic crisis as a store of value.
In recent years, BTC has consolidated its reputation as an alternative store of value. Many proponents and opponents (including Federal Reserve Chairman Jerome Powell) view bitcoin as a digital form of gold. This may be one of the features of the crypto asset that prompted Grigor’s company to invest money in it, as he explains:
If you like investing in gold, you can’t overlook bitcoin.
Speculative Bitcoin assets
However, some competitors of NZ Funds Management attacked the decision, calling it a gamble rather than an investment. Others say bitcoin doesn’t belong in their wallets because the crypto is too speculative at the moment.
In response to this criticism, Grigor argues that the Kiwisaver fund is primarily composed of traditional asset classes such as bonds and stocks. However, Grigor explains that there will be times when navigation will not always be easy. To prepare for such an opportunity, CIO believes it would be wise to invest in other opportunities as they arise.
Meanwhile, Grigor also reports that BTC has risen to over $61,000 after buying the crypto asset at $10,000 in October 2020. Although crypto assets have since rebounded from their peak, NZ Funds Management believes the price of bitcoin will continue its upward trend. However, Grigor adds that when we think the momentum is over, we move on to the next asset class.
What do you think of NZ Funds Management’s decision to acquire bitcoin? You can tell us what you think in the comments below.
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