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There’s no point deliberating over the daily fluctuations inprice, according to Mark Yusko, the founder and Chief Investment Officer of Morgan Creek Capital Management. Instead, he suggests, investors should focus on the broader point that the asset has been exhibiting an upward trend year-on-year for a while now.
Yusko, counted among the renowned investors and philanthropists in America, made these remarks during his recent appearance on CNBC Fast Money. His comments came against the backdrop of a somewhat-sluggish performance by the world’s most popular decentralized digital asset.
As it turned out later, the price drop was probably due to a massive mysterious Chinese Ponzi scheme worth $3 billion. However, expectedly, some investors were spooked by Bitcoin’s downward momentum, prompting CNBC’s Melissa Lee to ask Yusko for his take on the issue. Yusko responded by saying he wouldn’t read too much into it.
“I have been saying this for a long time that people who watch the daily price of Bitcoin are really missing the whole point.”
Using exotic monikers like “chaos hedge” and “schmuck insurance” to describe Bitcoin, Yusko went on emphasizing that investors should mainly focus on the fact that the asset, as a store of value, has been bullish over the long haul.
“What we need to think about is the long-term trend. Every year the low is higher, the value of the network goes up,” he noted, adding that worrying over day-to-day valuation is not really worth it.
Yusko also suggested that for most investors, it would make a smart strategic choice to “own a piece of the [Bitcoin] network.” While he didn’t mention any specific number, the Morgan Creek Capital founder suggested that investors should consider spending somewhere around 1 to 5 percent of their net worth on Bitcoin.
This, according to him, makes for a strong hedge against the uncertainties looming over the fiat and equity markets.
On a related note, the turbulence in the mainstream financial avenues is increasingly pushing more and more investors to take refuge in the relative safety provided by the crypto space. While Bitcoin itself is infamous for its We can describe volatility as how much the value of an asset changes over a given time. A volatility index... More, it has recently demonstrated the ability to better navigate liquidity crises as compared to most conventional assets.
Perhaps that’s one reason why the crypto space has recently witnessed a much higher degree of activity by Chinese investors. The growing consensus is that unfazed by the ban on crypto trading, many investors from mainland China are increasingly investing in digital assets to wait out the storm caused by the weakening Yuan.
So, do you agree with Mark Yusko’s assessment that worrying over day-to-day Bitcoin valuation is not really worth it? How much do you think Bitcoin should occupy in the average investor’s portfolio to ensure an optimal construction? Share your thoughts in the comments below.
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