Yale Economist Advises Investors to Invest Min. 6% of their Funds in Bitcoin
Investors and financial experts do not have a consensus on the status and acceptance of cryptocurrency assets, but are divided into two opposing sides. Some investors emphasize the importance of including crypto in portfolios, whereas others advice to stay clear of it.
Aleh Tsyvinski, an economist who taught at Yale University recently talked about his views on cryptocurrency. When asked whether he thinks investors should invest in Bitcoin, and if yes, how much, he responded,
If you as an investor believe that bitcoin will perform as well as it has historically, then you should hold 6% of your portfolio in bitcoin. If you believe that it will do half as well, you should hold 4%. In all other circumstances, if you think it will do much worse, then you should still hold 1%.
However, he did note that just like with any other asset, past performance alone is not an indicator of future performance and returns. He further stated that there is a chance,
Cryptocurrency will completely change its behavior, but currently the market does not think it will.
One the other side of this debate is Jeffrey Tucker, the editorial director of the American Institute for Economic Research (AIER) who has advised governments to forget about crypto and instead focus on fiat and national banking systems that are already in place. While Tucker praised the development of blockchain technology as ‘impressive’ and a ‘pure revolution’ and recognized Bitcoin’s development by saying it ‘started from nothing to become the world’s first successful experiment in universal digital money that operates without intermediation,’ he stated,
The private sector is innovating [but] government and central banks should leave them alone. And an even better rule: if you didn’t invent it, and you made no contribution to making it more valuable, you can’t regulate it either.