Australia’s leading investment firm shifts from negative-yielding assets like gold to Bitcoin

A billion dollar Australian investment management firm got into bitcoin, citing that cryptocurrency is superior to gold. Many of the company’s clients have asked about investing in bitcoin. “We have been positioning ourselves in gold for our clients for many years now. Now we are doing it with bitcoin, “a company executive said.

Bitcoin ‘Entering the realm of the mainstream’

Australian investment management firm Pendal Group has begun investing in bitcoin through futures contracts on the Chicago Mercantile Exchange, the AFR publication reported Monday. Pendal is a global investment management company listed on the Australian Stock Exchange (ASX) under the symbol PDL. Its market capitalization is currently $ 1.6 billion.

“We have so many clients asking us about bitcoin, what to do and how to get access to it,” said Vimal Gor, Pendal Group’s head of bond, income and defense strategies. “Big institutions have been away so far, but high net worth clients and wholesale investors are leading the charge.” Has elaborated:

All the big hits in the hedge fund world are coming out to support bitcoin now; is entering the realm of the mainstream.

Famous billionaire investors who have backed bitcoin in one way or another include Paul Tudor Jones, Bill Miller, and Stan Druckenmiller. Jones recently said he sees a huge lead for bitcoin, comparing cryptocurrency to investing in early tech stocks, like Apple. Miller believes that all major banks, investment banks, and high net worth companies will eventually have exposure to bitcoin, while Druckenmiller said the cryptocurrency could beat gold.

Bitcoin higher than gold

Gor believes that “bitcoin is superior to gold,” broadcast AFR and quoted it as saying:

We have been positioning ourselves in the gold for our clients for many years now. Now we are doing it with bitcoin.

His sentiment echoes what he told online business channel Ausbiz in August when he explained the reasons he invested in gold for his clients. “Gold is a negative yielding asset,” but since “virtually every asset in the world is a negative yielding asset,” gold looks better than these assets on a relative basis, he explained. However, compared to bitcoin, he said the cryptocurrency “has an edge over gold”.

Gor said: “If Bitcoin is considered a store of value and a store value it is purely a social construct. So it is better than gold as it is transferable as you don’t have to physically go and take a large balance wheel and give it to someone else. “. Furthermore, he described bitcoin as “a call option on the digitization of the world, which is very clear where we are going with all the central banks of the world, looking at their own coins.”

Government bonds will be a dead asset class

Gor also shared that his fundamental analysis of bitcoin takes into account the trillion dollar quantitative easing (QE) programs of central banks and government bonds becoming less relevant.

“Covid has just accelerated the major structural trends that were already underway,” Gor noted. “The first and foremost was the decline in official interest rates and bond yields. With large-scale central bank QE programs in place, bond yields will remain low for a very long time. “He continued:

We think government bonds will eventually turn into a dead asset class, so now we need to imagine what it will be like for other asset classes when bonds are no longer relevant to hold in a portfolio.

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