Bitcoin and the S&P 500 Index have gone through a short-lived correlation after the March crisis in which both the traditional and crypto markets collapsed to record lows.
However, the correlation began to disappear once the adoption of cryptocurrencies started to skyrocket, as both retail and institutional investors began to steer funds away from the risk of hyperinflation caused by the FED flooding the US market with US dollars. Fashion.
The recent record for the highest S&P index of all time on August 18 was followed by criticism from economists who have argued that the positive performance in crypto markets defies economic logic.
Bitcoin evangelist and Morgan Creek co-founder Anthony Pompliano noted that the ongoing quantitative easing that has left the US reeling in 26T debt is playing a major role in the "Artificial performance of the securities markets".
“There was an all-time high for quantitative easing announced earlier this year. Today, the S&P 500 hit an all-time high. This is not a coincidence".
Stock market points do not match actual performance
An annual report from the Kentucky Retirement System covering its monthly performance indicated a return on investments of 1.2%, based on its fiscal year 2020, which ended June 30.
The $ 18.2 billion pension system only earned less than 2%, despite a thriving stock market, causing analysts to question the validity of the stock market gains. Once again, Pompliano, as one of the leading economists who believes that the fiat market is doomed, now thinks that pension systems should diversify their portfolios. keeping some of your funds in Bitcoin.
“Every pension system should have 1 to 5% of its assets in bitcoin. If yours doesn't, give them a call and ask why not. "
While pension systems are not prohibited from investing in digital currencies, the report also hints that the politics and bureaucracy involved in pension systems could be an obstacle to adopting digital assets or private equity as more transparent investment methods.
“No pension investment policy will include bitcoin or any cryptocurrency probably ever. However, most pension systems are allocating more and more to private capital. PE cryptocurrency specific funds may be around politics. "
With Bitcoin and Ethereum wallet addresses hitting all-time highs in the second quarter of 2020, data from Fidelity indicates that up to 36% of institutional investors, including pension funds in the US and Europe, own cryptocurrencies. . With over 25% ownership, bitcoin is currently the most popular digital currency.
“More US investors find digital assets attractive compared to a year ago. Investors in Europe are more likely to own digital assets and have a more progressive view of the asset class than US investors. ”