For family offices, a transition from Gold to Digital Assets has already begun. Two Prime works closely with family offices to devise personalized solutions to achieve objectives across various time horizons.
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Top digital assets have historically produced uncorrelated yields to equity markets and offered outsized returns. CitiGroup has predicted a rise above $300,000 per Bitcoin within the next few years.
With a finite supply, Bitcoin can also hedge against inflation risk for investors and corporate treasuries. Lastly, digital assets’ decentralized nature can also prevent seizure for those living in high-risk political environments.
The ability to gain significant beta exposure and add hedged risk parameters through interest-earning accounts and options trading makes digital assets, unlike any other asset’s behavior. With a relatively small market cap, purchasing Bitcoin today would be like buying an ounce of Gold for ~ USD 100.
In retrospect, many fiduciaries and investors will look back on this time and ask why they didn’t buy more.
We have seen institutional participants, including corporate treasuries, enter rapidly, accumulating positions of hundreds of millions of dollars—established firms like BlackRock, Stanley Druckenmiller, SkyBridge Capital, MassMutual, and Guggenheim Partners.
Wealth managers no longer need to worry that a move into digital assets will appear foolhardy. We foresee a day where the opposite will be true: not having intelligent exposure will be a guarantee of sub-performance.
JP Morgan reports that many family offices and millennial investors see Bitcoin as a preferred store of value to Gold. This rising narrative fuels increasing interest for professional investors, and inflows to digital asset products suggest that capital is starting to move from one asset class to another.
The combination of institutional entrants and retail speculation makes the possibility for rapid growth quite possible. Models of scarcity like a stock to flow suggest new highs are imminent, as seen above. With such a global and internet-centric asset, fiduciaries will soon need to ensure they don’t enter too late.