A Bloomberg crypto market analyst says that Bitcoin (BTC) will be one of the main beneficiaries of an inevitable return to currency debasement by the US government.
Jamie Coutts says on the social media platform X that allocating 1% of a traditional 60/40 (stock and bonds) portfolio to BTC between 2015 and 2022 would have significantly boosted gains for investors.
“What happens when you re-allocate 1% from bonds to BTC to 60/40 portfolio?”
However, Coutts says that even the optimized returns from a BTC allocation didn’t help the average 60/40 portfolio outrun the currency debasement that took place during those years.
The crypto analyst says that as more investors start to factor in currency debasement into their portfolios, hard assets like Bitcoin will stand to benefit while government bonds will feel pain.
“For most non-fiduciary constrained investors, position sizing needs to consider the monetary debasement factor. Nominal returns is a useless measure in the current fiat CB (central bank) construct.
Based on the USG (US government’s) finances, debasement is the only option.
Bad for bonds, good for hard assets…
In our view, bonds will likely be the biggest loser in a future where portfolio allocators begin seriously considering Bitcoin’s inclusion in diversified portfolios.”
Earlier this month, Coutts said that Bitcoin triggered a bullish signal on one of Bloomberg’s proprietary trading indicators.
At time of writing, BTC is trading for $26,926.
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