Reading time: ~2 m
Experts of the financial company PGIM, which manages the assets of customers in the amount of $ 1.4 trillion, believe that cryptocurrencies are not suitable for long-term investments.
Specialists of the company from different departments studied the market of digital assets and came to the conclusion that investments in virtual currencies carry a huge risk due to the high level of volatility of the coin rate. For this reason, they do not recommend buying tokens and coins in the hope of an impressive profit.
Before adding an instrument to an investment portfolio, we take into account three factors: the turnover of the asset is regulated by clear legislative measures, it must represent an effective means of saving capital and has a predictable correlation with other asset classes.
Cryptocurrencies do not meet any of these criteria. They look more like an object of speculation than an investment tool, “said PGIM CEO David Hunt.
According to the results of the PGIM study, virtual currency cannot be called a safe portfolio diversifier, a reliable store of value and a valuable hedge against inflation.
Employees of the firm made this verdict due to the fact that bitcoin, which is often called “digital gold”, fell sharply in price in 2020 after the emergence of the coronavirus epidemic, and last year the value of the “father of cryptocurrencies”, like many other digital assets, collapsed again.
#cryptocurrencies #suitable #investments #long #time