Wealth managers around the world are being bombarded by Bitcoin requests, according to a new report by Bloomberg. The spectacular rise in value of the cryptocurrency has caused a run on the investment, with a huge number of investors seeking positions in the new asset class.
Mainstream adoption for Bitcoin, which until this year was still widely considered a black market currency, has grown at remarkable rates. The explosive price increases have led to new vehicles for investment such as Bitcoin futures on the Chicago Mercantile Exchange (CME) and others.
While most wealth managers are uncomfortable with the risk associated with a new technologically backed asset class, the bulk are willing to allow clients to enter the Bitcoin market. However, the vast majority of wealth managers suggest removing initial investment as quickly as possible and only leaving gains in the market.
According to Kevin Grimes, president of Grimes and Co., it’s best to sell enough of your position to get your original investment out, but he’s still very strongly advising holding some position in the cryptocurrency. He says:
“Laughing off Bitcoin could wind up being a big mistake. Bitcoin could go to zero and be a scam, and it could go up to numbers no one has conceived of yet.”
Regardless, the reality that Bitcoin is moving into the mainstream in itself validates the potential for substantial price increases, according to others.