Switzerland's Largest Bank UBS Suggests Alternative Ways of Investing in Cryptocurrency
-
Loading... - Isabella Martel
- 10 Feb 2022
- 424 Views
- 0 Like
- 0 Comment
UBS’ Crypto Investing Advice
The UBS Global Wealth Management team published a research note last week on alternative investments to directly holding cryptocurrencies.
The bank’s analysts, led by UBS Chief Investment Officer Mark Haefele, explained that “direct exposure to cryptos is highly speculative.” They believe that bitcoin’s recent fall from a record high in November last year “has undermined two of the most common defenses of the asset class.”
The UBS report details: “The first is that it provides an effective form of diversification from traditional financial assets, such as equities … Second, it is getting harder to see cryptos as a form of ‘digital gold’ that provides protection against elevated inflation.”
While maintaining that direct exposure to crypto assets is highly speculative, the UBS analysts emphasized that “it does not mean that the technology underlying digital assets holds no promise for investors.” They described:
"We see a range of possible applications — from financial services and healthcare to luxury goods — leading to a potential USD 1 trillion boost to global GDP over this decade."
“There are several main ways investors can access this potential while avoiding the high volatility and regulatory risks of holding bitcoin or rival cryptos,” the UBS analysts continued.
The first strategy the analysts suggested is to invest in companies that build the necessary infrastructure for the crypto ecosystem, citing that they are likely to benefit from the more widespread use of distributed ledger technology (DLT) applications.
The UBS analysts explained: “The growth of DLT applications will require more hardware to validate the activities on the network, including application-specific integrated circuits (ASICs), application processors, and graphics processing units (GPUs). Other enablers include software makers and data center-related companies that help build the overall infrastructure.” Read More…
