Cambridge Associates, a private and institutional investment advisory firm, which includes pension portfolio management, has stated that institutions should begin to consider investing in cryptocurrencies.
The company provides its services to institutions that manage total assets exciding $300 billion.
Cambridge analysts wrote in a note published today:
“Despite the challenges, we believe that it is worthwhile for investors to begin exploring this area today with an eye toward the long term. Though these investments entail a high degree of risk, some may very well upend the digital world.”
The high risk and lack of regulatory framework have kept so-called institutions away from this sector for now. Moreover, the fall in prices in 2018 has indeed not created more interest in these new assets, but now that the situation seems to have calmed down, interest may rise again.
The Cambridge Associates’ report recommends investing “a considerable amount of time” to study these assets in depth, including options to invest in them, such as venture capital funds or direct token purchases.
“The dramatic declines that swept across the crypto space raised questions about the future of these assets and the blockchain technology that underpins them. Yet, in looking across the investment landscape, we see an industry that is developing, not faltering.”
Institutions have long been expected to enter this sector because in addition to bringing new capital they could also bring a reasonable degree of credibility.
However, it seems that this entry has already begun, albeit very slowly, as two US pension funds have already invested in a venture capital fund for the blockchain sector and digital assets.
If bitcoin were to confirm its hypothetical deflationary nature, it could be an asset suitable for those long-term investments, such as pension funds, which are not looking for immediate returns, provided that volatility and risk are reduced drastically.
The advice of Cambridge Associates is not yet to invest a significant portion of savings in bitcoins or cryptocurrencies, but to start to study these assets that could have exciting potential, as to be able to invest successfully you need to know the market well.