Social Capital Chief Touts Crypto for Retirement Investing

Share Article
In Brief
  • Chamath Palihapitiya has challenged the traditional 60/40 asset allocation model.

  • He suggests replacing bonds in this low interest-rate environment.

  • The Social Capital CEO believes increasing exposure to alternative assets like crypto could be the solution.

  • promo

    Gravity Dex Protocol: Bringing DeFi to Cosmos

The Trust Project is an international consortium of news organizations building standards of transparency.

Chamath Palihapitiya might have just turned the conventional asset allocation model on its head.

Sponsored



Sponsored

In a tweet, the Social Capital CEO challenged the traditional 60/40 retirement investment model, which represents allocations of 60% and 40% to stocks and bonds, respectively, targeting returns of 10% returns annually in past decades. This rule has been widely followed, but given the current economic environment coupled with a dovish Fed, bond returns are not what they used to be. This dynamic has thrust hard assets like bitcoin and gold into the spotlight.

Palihapitiya asks now that bonds are returning zero, if the “40 go to zero with it?” He suggests lifting one’s exposure to alternative assets — in which most people have a 0-5% allocation — as a possible solution, including “crypto, cars, art, baseball cards, etc.” On that note, investors might also incorporate tokenized art and collectibles to kill two birds with one stone, so to speak.

Source: Crypto

Bitcoin Bull

While the venture capitalist didn’t name any specific cryptocurrencies, he is known for being a bitcoin bull who considers his BTC bet his best wager yet. Not everyone was on board.

Source: Twitter

Yet, pension funds have been limping along this year while bitcoin has delivered double-digit percentage returns. Public pension plans for the year-ended in June delivered median annual returns of a paltry 3.2%, as per Wilshire Trust Universe Comparison Service dated cited by The Wall Street Journal. Those funds with access to equities performed better, in some cases more than doubling those returns. Meanwhile, bitcoin is outperforming the S&P 500 by a long shot year-to-date.

Bitcoin and gold have both been taking it on the chin of late, with both assets trading under pressure as technology stocks stage a recovery. Bitcoin’s returns have trounced gold’s so far in 2020.

https://twitter.com/blockfolio/status/1306666133672669186

Bitcoin and Retirement

A bitcoin ETF could go a long way to bolster bitcoin’s role in retirement portfolios. ETFs are popular in 401(k) retirement plans for their low cost and diversification, not to mention their technological superiority. The U.S. Securities and Exchange Commission, however, has so far blocked every attempt for a bitcoin ETF by the crypto community.

Source: Twitter

Some investors aren’t waiting around and have found other ways to incorporate cryptocurrencies into their retirement plans.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
Sponsored
Share Article

Gerelyn caught wind of bitcoin in mid-2017, and after becoming smitten by the peer-to-peer nature of crypto has never looked back. She has been covering the space ever since. Previously, she wrote about traditional financial services, Wall Street and institutional investing for much of her career. Gerelyn resides in Verona, N.J., just a hop, skip and a jump from New York City.

Follow Author

Market signals, studies and analysis! Join our Telegram Today!

Go

Market signals, studies and analysis! Join our Telegram Today!

Go

Market signals, studies and analysis! Join our Telegram Today!

Go