Bitcoin Boom: Traditional Finance Adapts as Cryptocurrency Sets New Investment Standards
October 21, 2024With the expansion of the Bitcoin economy, new investment strategies are emerging, leading managers to allocate capital towards Bitcoin banks, insurance companies, and related innovations.
The shift towards Bitcoin is gaining traction and becoming widely accepted as the new conventional wisdom in finance.
In light of Bitcoin's potential for high returns, investors are beginning to question the high fees associated with traditional money managers.
Investors are likely to see Bitcoin set a new hurdle rate for investment returns, potentially surpassing the historical benchmark of 8% for U.S. equities.
As the volatility of Bitcoin decreases over time, the future of money management will increasingly emphasize Bitcoin derivatives and speculation.
Major financial players, including Visa, Fidelity, and Western Union, are beginning to leverage Bitcoin technologies, such as credit cards and custody services.
As Bitcoin raises the performance bar, traditional money management methods, including hedge funds and high-frequency trading, are likely to decline.
Despite the anticipated decline in traditional methods, there will still be opportunities for talented managers to achieve outsized returns in the evolving financial landscape.
Active money management continues to play a critical role in setting market prices, attracting significant amounts of capital and talent.
Bitcoin is revolutionizing the financial system, prompting traditional financial institutions to adapt their business models to integrate with this emerging asset.
As Bitcoin continues to rise, it is expected to significantly transform traditional money management practices, which, despite the growth of algorithmic trading and passive investments, still represent a substantial industry.
Summary based on 1 source
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Source
Forbes • Oct 20, 2024
How Bitcoin Will Reform Money Management