A New Zealand hedge fund, NZ Funds Management, which had $350 million worth of assets under management at the end of December 2020, says five percent of its money is invested in bitcoin. According to the firmâ€™s CIO James Grigor, â€‹bitcoin is also set to be featured in more of its Kiwisaver investment schemes within the next five years.
â€˜You Cannot Discount Bitcoinâ€™
As explained in a local report, the firmâ€™s bitcoin acquisition only became possible in October 2020 when an amendment was made to its offer documents. Meanwhile, in justifying the acquisition, Grigor said:
In the past few years, BTC has cemented its reputation as an alternative store of value. Many supporters and opponents (including U.S. Federal Reserve chair Jerome Powell) see bitcoin as a digital form of gold. This is possibly one attribute of the crypto asset that prompted Grigorâ€™s firm to allocate funds towards it as he explains:
Bitcoin Speculative Asset
However, some of NZ Funds Managementâ€™s rivals have attacked this decision calling it â€œmore like gambling than investing.â€ Others say bitcoin has no place in their portfolios because the crypto is â€œtoo speculative at this stage.â€
In his response to this criticism, Grigor argues that the Kiwisaver fund â€œis majority built up through traditional assets classesâ€ such as bonds and shares. However, Grigor explains that â€œthere is going to be times when itâ€™s not always going to be plain sailing.â€ To prepare for this possibility, the CIO suggests that it would then be prudent to invest in other opportunities as they present themselves.
Meanwhile, Grigor also reveals that after acquiring the crypto asset at $10,000 in October 2020, BTC spiked to over $61,000. Although the crypto asset has since retreated from the price high, NZ Funds Management is of the view that bitcoinâ€™s price will â€œcontinue on its upward trajectory.â€ However, Grigor adds that â€œif we think the momentum has gone, we will move onto the next asset classâ€.
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