Bitcoin & Modern Portfolio Theory

Note from the CEO:  Bitcoin is being discovered as a new asset class, something we at FintekNews have been preaching for a while. The evolution of bitcoin is a constant work in progress but acceptance and use of bitcoin is happening. Great article and can’t make too much “sport” of since these are some really smart and visionary people.

Bitcoin meets Modern Portfolio Theory (MPT) and should now be considered a unique asset class. In that regard, having this unique asset class as a portion of a portfolio falls under the diversification that MAP calls for. In other words, bitcoin is slowly becoming mainstream and its existence and acceptance are no ‘fluke’.

“Chris Burniske is blockchain products lead at ARK Invest, an investment manager focused on disruptive innovation. Adam White is vice president and general manager at Coinbase, where he oversees its exchange service GDAX. 

In this CoinDesk 2016 in Review special feature, Burniske and White discuss their recently published white paper, “Bitcoin, a New Asset Class”, unpacking what they see as the tech’s investment potential. 

While much of the traditional financial world was focused on “blockchain” in 2016, few gave bitcoin as much attention.

When brought up, bitcoin was referenced in the context of macroeconomic dislocations like the depreciation of the Chinese yuan, India’s banknote ban, or Trump’s surprise election win. While these events often provided great examples of its use as a “disaster hedge” in the face of capital market turmoil, we believe the bigger story of bitcoin’s evolution as a unique asset class was left mostly untouched.

Recently, however, we have witnessed institutional investors awaking to bitcoin’s maturation and long-term value proposition in the context of Modern Portfolio Theory (MPT)….

Read Full Article at Coindesk