The chief investment officer of crypto fund manager Bitwise says large investors now view Bitcoin (BTC) as a means of mitigating the risks of economic headwinds.
In a new interview on the Cheddar YouTube channel, Matt Hougan says institutions are closely looking into Bitcoin amid concerns about persistent inflation and the US government’s rapid debt accumulation.
“We’ve been meeting with financial advisors, family offices and even endowments over the past few months since the Bitcoin ETF (exchange-traded fund) launched and what I’ve heard more than anything from these investors is what they’re really worried about – the potential for inflation reigniting. What they’re really worried about is rising debt levels and what they’re seeing is that Bitcoin can be a hedge in their portfolio against those risks…
The real concern, the thing people are focused on hedging out with Bitcoin is that inflationary and debt risk.”
According to Hougan, people are waking up to the fact that Bitcoin is one of only two assets not backed by debt.
“I think many investors are waking up to realize they don’t have any non-debt money. What is non-debt money? It’s either Bitcoin or gold. I’m seeing a lot of investors who are deciding to own both and I think that’s the dominant paradigm in the market right now.”
Hougan says both gold and Bitcoin allow investors to store money outside centralized institutions without relying on fiat currencies but notes that the crypto king has more upside potential and risks given that it’s a relatively new asset.
“Gold is a very mature asset. Bitcoin is an emerging store of value. That means Bitcoin has more upside potential but also more volatility, so they play slightly different roles, but they provide the same general service to investors, which is a way to exit the fiat currency system and have some non-debt money in the portfolio.”
At time of writing, Bitcoin is worth $65,095.
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