Institutional Bitcoin holdings must rise, says 2020 VanEck Report


The 2020 VanEck report says institutional Bitcoin holdings must rise and include more digital assets. VanEck, an investment firm, publishes the famed report annually to give insights into the financial markets. The latest report released on 29th January mentions that institutional Bitcoin holdings must increase to include more BTC in their portfolio as the cryptocurrency has now become a quality asset.

Institutional investors should increase BTC allocation to get the advantage of the risk-reward potential represented by the Bitcoin. The report specifically states that in a sixty percent equity and forty percent bonds portfolio, a minor increase in BTC allocation can significantly increase the potential returns with minimal impact on its volatility.

Increase in institutional Bitcoin holdings will boost BTC prospects further

The crypto industry will become mainstream as more large investors and institutions accept Bitcoin into their portfolios. The 2020 VanEck report states that institutional Bitcoin holdings portfolios with three percent (3%) BTC allocation have outperformed competitors and delivered the highest returns. The report compared many portfolios with similar holdings to conclude the superiority of those with BTC.

However, there are several impediments to this path. Institutional Bitcoin holdings are limited since BTC is a bearer asset. Moreover, the dearth of infrastructure to link BTC with traditional financial markets also hinders its growth in portfolio allocation.

Bitcoin can rival digital gold in a few years

Besides recommending an increase in institutional Bitcoin holdings, the report also states that Bitcoin can soon become the next online gold. The scarcity of BTC post the upcoming halving will boost prices. As more transaction channels are developed, the ease-of-transfer will improve further.

The report does not recognize Bitcoin as a currency. However, it does add that it will soon achieve this status in the future. BTC shares many features with the United States dollar and gold. Such reports will surely boost the sentiment of BTC holders and those who truly believe in the decentralized economies of the future.

Featured Image by Pixabay

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Gurpreet Thind

Gurpreet Thind is pursuing Masters in Electrical Engineering at University of Ottawa. His scholarly interests include IT, computer languages and cryptocurrencies. With a special interest in blockchain powered architectures, he seeks to explore the societal impact of digital currencies as finance of the future. He is passionate about learning new languages, cultures and social media.

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