The rate at which billionaires invest in digital currencies hit the roof last year, and the same is likely to continue in 2022. Even though most of the investors earlier had a negative stance towards cryptocurrencies, there has been an increasing need to look for alternatives to fiat currencies over inflation.
Most billionaires earlier were the leading crusaders against cryptocurrencies due to its high volatility and lack of regulations.
The economy is facing some of the worst inflation rates since the 2008 financial crisis. On the other hand, cryptocurrencies have grown to become an ideal hedge against inflation. This makes digital currencies the best alternative to fiat currencies.
One leading investor backing Bitcoin is Hungarian-born billionaire Thomas Peterffy whom Bloomberg reports to have said that it’s wise to have 2% to 3% of one’s portfolio in crypto assets. Peterffy, whose assets are reported to be worth around $25 billion added that fiat currencies might “go to hell”.
Peterffy’s firm, Interactive Brokers Group Inc., is one of the leading financial services firms to have started offering crypto assets to clients in mid-2020 following a surge of demand. The firm currently offers major tokens like Bitcoin, Litecoin, Ether, and Bitcoin Cash, and will likely increase the offerings by another five or so soon.
Peterffy, who holds some of his portfolio in crypto, believes that digital currencies have both the possibility of making extraordinary returns or failing completely.
The current stance on digital currencies by Peterfy is quite the opposite of his initial stand on digital assets. In 2017, he placed a full ad page in the Wall Street Journal warning of the dangers digital assets posed to capital markets.
The change in attitude towards cryptocurrency shows how much digital assets have become integral to the economy. Billionaires are betting on Bitcoin to become what gold has been for inflation.
Another billionaire to have a changing attitude towards digital currencies is Bridgewater Associates founder Ray Dalio. Even though having recently questioned crypto’s properties as a store of value, he has revealed his portfolio contains some Bitcoin and Ether.
Dalio now perceives digital currencies as “alternative money” and that “cash is trash’’ following the high inflation rates eroding purchasing power. He declared that he was impressed by how crypto lasted and that cash is currently the worst investment.
With most investors look toward crypto, digital currencies have gone mainstream with most traditional financial services including crypto in their offerings. Some of the leading firms to offer crypto include ProShares which launched the first US Bitcoin futures ETF. It attracted more than $2 billion within the first two days of trading.
Goldman Sachs Group Inc and Coinbase Global have also increased their crypto offerings in recent years.
While there might still be some skepticism about crypto from Wall Street and other ultra wealthy individuals, this is reducing.
