Australian fund manager Hamish Douglass is not so keen on Bitcoin and the crypto market. He says investors are exposed to its high volatility and uncertainty, and most crypto enthusiasts are simply believing an “illusion” that will ultimately end up at zero.
Douglass, chairman and chief investment officer of the US$113 billion fund manager Magellan Finance, believes cryptocurrencies will have a broader role within investors’ portfolios, but they will “either be asset-backed or they will be central government-backed. So maybe there is some truth in gold coin after all.”
I predict all these forms of cryptocurrencies that are not backed by central banks or backed by assets will ultimately go to zero. I can’t tell you when it will happen, but it’s inevitable that it will go to zero.
Hamish Douglass
Bitcoin Will Bottom Out, Again
Douglass’s comments, as reported in The Australian newspaper, sound like another headline that would prompt FUD in the market once again, like those from other investment banks and hedge fund managers who claim bitcoin and the crypto market are worthless in the long run.
Yet there are investors and fund managers who have highlighted the benefits of cryptocurrencies, especially in times of financial crisis such as 2020’s Covid-19 outbreak. A week ago, Crypto News Australia reported that New Zealand’s KiwiSaver fund purchased BTC when it was trading at around US$10,000 in October 2020, achieving substantial gains on its holding despite the market correction after BTC hit its all-time high of A$79,800 in April 2021.
On the other hand, Douglass’s portfolio didn’t do so well during November/December 2020 as most of its equity assets were going downhill. He says he doesn’t regret it, and while the crypto market flourished during those months and institutional capital came in, he reaffirms that investors should go to “sleep at night not worrying that if something blows up, so will our portfolio”.
Am I worried that we have this defensive side? No. I could’ve done a bit better in September and October and could’ve weighted the portfolio to some more cyclicals and put a bit more risk on.
Hamish Douglass
“I Regret Not Buying Enough Bitcoin”
In contrast to Douglass, there is a hedge fund manager who did regret not buying enough bitcoin in recent years and it’s Avenue CEO Marc Lasry, also co-owner of the NBA’s Milwaukee Bucks. “As more people keep using BTC, it’s going to keep moving up,” Lasry said in June. “It just happened a little bit quicker than I thought it would.”
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