Jefferies Chief Strategist Chris Wood Justifies Corporate Allocation To Bitcoin

Chris Wood, the Chief Strategist of investment banking company Jefferies has indirectly tagged Bitcoin (BTC) a store of value.

Bitcoin Over USD Amidst Economic Crisis 

According to VanEck’s Head of Research Matthew Sigel, Wood stated that the allocation to Bitcoin was introduced because of its potential. The Chief Strategist noted that the leading cryptocurrency represents a legitimate alternative for risk-averse capital looking for a store of value.

This is “amidst the accumulating evidence over the past two decades and more of policies of currency debasement in the G7 world,” Wood said.

Wood believes that the failure of the United States government and other nations in the G7 bloc to outgrow unorthodox monetary policy may culminate into the collapse of the Dollar. He sees central banks in these regions maintaining their commitments to expanding their balance sheets in different ways. On this premise, he identified the need for strategic diversification of portfolio amidst economic crunch.

In his explanation, he talked about how gold and Bitcoin could benefit from this potential collapse of the United States Dollar. At the same time, the Jefferies executive made it clear that investors betting on gold and Bitcoin should be seen as insurance rather than as short-term trades. Furthermore, he called them long-term portfolio with the capacity to balance the long-term risks and opportunities in the current global context.

As a company, Jefferies has always regarded Bitcoin as an hedge and a thriving alternative in the financial sector. In October 2023 when the coin was just hovering around $27,000, the prominent global investment bank, advised long-term investors, particularly pension funds, to allocate 10% of their portfolios to Bitcoin.

Bitcoin As Inflation Hedge

Many other individuals have voiced their opinion about Bitcoin’s capacity as an alternative investment vehicle. SkyBridge Capital’s Anthony Scaramucci once stressed Bitcoin’s fixed supply and the possibility of storing value for a long time. This was in a comparison between the digital currency and gold as hedge. He observed that gold’s industrial usage constitutes only a small portion of its value, although it is seen as a store of value in general.

Anti-Bitcoin critic Peter Schiff is on the other side of Scaramucci’s opinion of Bitcoin. He believes that the coin is not functional, citing slow speed and high transaction costs as obstacles to its daily use. Meanwhile, the coin has seen increased adoption amongst institutional investors with the introduction of spot Bitcoin ETFs.

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