Major Australian investment fund Pendal Group believes that government bonds could display a “dead asset class” as they proceed to lose their significance in portfolios due to trillion-dollar quantitative easing programs run by central banks, pushing investors towards bitcoin (BTC).
“We think ultimately that government bonds will turn into a dead asset class, so we now have to imagine what it will be like for other assets classes when bonds are no longer relevant to hold in a portfolio,” Vimal Gor, Head of Bond, Income and Defensive Strategies, told the Australian Financial Review. As claimed by him, as bond outputs are going to “stay low for a very long time,” investors are looking for choices and “commodities and cryptocurrencies have a part to play in the answer.”
Nevertheless, Gor stated that bitcoin is preferred over gold like a social contract and store of wealth reason it’s easier to transact, there are flat running costs, and BTC has a restricted and decreasing supply.
Gor mentioned that,
“We have been positioning in gold for our clients for many many years now. Now we’re doing it with bitcoin.”
Adding that many of their high-net-worth clients and wholesale investors are asking about BTC. In either case, according to Gor, the fiat currency system will collapse but evolve.
As of August of this year, the general size of the worldwide bond markets in terms of USD equivalent notional outstanding is roughly USD 128.3 trillion, as claimed by the calculations by the International Capital Market Association.
As announced, last week, Rick Rieder, BlackRock‘s Chief Investment Officer of Global Fixed Income stated that BTC is “much more functional” than gold and the most popular cryptocurrency could replace the yellow metal. At the end of last year, BlackRock had USD 7.4 trillion in assets under management.
With some AUD 101.4bn (USD 74bn) in funds under management as of the end of 2019, Pendal Group says it is one of Australia’s largest investment managers. The company is listed on the Australian Securities Exchange.
Su Zhu, CEO of crypto investment fund Three Arrows Capital, commented on Pendal’s approach by tweeted that,
“If pensions begin divesting from the zero/negative yielding global sovereign bond market to buy BTC that would be a veritable deluge of capital”.
Meanwhile, Michael Saylor, CEO and Founder of business intelligence firm MicroStrategy, expects BTC and other cryptocurrencies to strengthen its position of a “better store of value” for the USD 300 trillion that is currently “trapped & rapidly depreciating in bonds, stocks, real estate, cash, & gold”.
At pixel time (10:38 UTC), BTC trades at USD 18,726 and is up by 3% in a day and 15% in a week. The price rallied by 44% in a month and 159% in a year.
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