Bitcoin (BTC) is considered nowadays a must-have in any portfolio as it represents an investment in technology and innovation by many, Morgan Creek Capital CEO Mark Yusko said in an interview with Max Keiser .
Keiser started by mentioning that portfolios with even 1 percent Bitcoin exposure have more alpha or, in other words, outperformed just about everything in the last five years.
Alpha reflects a portfolio’s performance relative to a benchmark. Portfolio managers aim to produce alpha to minimize unsystematic risk by diversifying portfolios.
“It’s incredible,” said Yusko. “If you took 1% of all the endowments and foundations five years ago, that would have been $6.7 billion out of $670 billion. You took that one percent — half percent from stocks, half from bonds — instead of making 7.2%, which is what they made, they would have made 9.2% or 200 basis points better. Two on 7.2% is a lot of alpha.”
But while conceding that Bitcoin had a non-zero possibility of price going to existent, he also pointed out that it provides ten-to – one capturing downside.
But while conceding that Bitcoin had a non-zero probability of price going to zero, he also pointed out that it provides ten-to – one capturing downside. It makes Bitcoin one of the most asymmetric properties he’d ever seen in his career, according to Yusko.
He also indicates that finding publicity would become ever more common for conventional funds, continuing:
“So the idea that ten years from now we won’t look back and say that as a fiduciary of a pension fund, sovereign wealth, family office, etc. you had to have exposure to this asset, is crazy.”
Evidence is increasing about the fact that Bitcoin is becoming increasingly embraced among investors, particularly as BTC’s price is currently climbing back to the $10.00 level.
Morgan Creek Capital Management, LLC is a SEC-registered investment adviser providing investment management services to institutions and wealthy families. Morgan Creek is based in Chapel Hill, North Carolina with additional offices in New York and Shanghai.
