Pimco

$2.2 Trillion Asset Manager Pimco Looking to Trade Cryptocurrencies, CIO Says

22/10/2021 by Idelto Editor

$2.2 Trillion Asset Manager Pimco to Begin Trading Cryptocurrencies, CIO Says

Pimco, an asset manager with $2.2 trillion under management, is looking to start trading cryptocurrencies. “We’re trading from a relative value perspective,” the firm’s chief investment officer said. Pimco’s clients include central banks, sovereign wealth funds, public and private pension funds, financial and non-financial corporations, foundations, and endowments.

Pimco Getting Into Crypto

Pimco’s chief investment officer, Daniel Ivascyn, told CNBC in an interview Wednesday that his company is looking to trade digital assets, noting that some of its hedge fund portfolios are already investing in crypto-linked securities.

Pimco, an asset management subsidiary of Allianz Group, is a global leader in fixed income, its website details. Pimco manages $2.2 trillion in assets as of June 30. Its clients include central banks, sovereign wealth funds, public and private pension funds, financial and non-financial corporations, foundations and endowments, financial advisors, family offices, and individual investors.

Ivascyn said:

Now we’re looking at potentially trading certain cryptocurrencies as part of our trend-following strategies or quant-oriented strategies, then doing more work on the fundamental side.

“This will be a gradual process where we spend a lot of time on the internal diligence side speaking to investors. And, we’ll take baby steps in an area that’s rapidly growing,” he added.

His comments came as the price of bitcoin hit all-time highs Wednesday following the launch of the first U.S. bitcoin futures exchange-traded fund (ETF) on the NYSE.

Ivascyn also revealed that some of Pimco’s hedge fund portfolios are already trading crypto-linked securities. The CIO elaborated:

We’re trading from a relative value perspective. So, we’re not taking directional exposure, but we’re looking to take advantage of mispricings between the cash product, popular trust that trades on the exchange, and then the futures. So that was a starting point for us in a very narrow segment of our business.

He proceeded to comment on decentralized finance (defi). “You have to understand decentralized finance, because it will be disruptive, and it very well may disrupt our industry, in our business in particular,” he opined.

According to the executive, Pimco is “thinking about scenarios where this could take us to ensure that we are competitively prepared to deal with what’s a rapidly changing environment that offers a pretty significant value proposition, particularly for younger generations, or the new generation of the investment community.”

What do you think about Pimco investing in cryptocurrencies? Let us know in the comments section below.

Asset Managers UBS, Pimco, T. Rowe Price Caution of Cryptocurrency Investing, Expect Strict Regulations

19/05/2021 by Idelto Editor

Asset Managers UBS, Pimco, T. Rowe Price, Glenmede Warn About Cryptocurrency Investing, Expect Strict Regulations

A number of asset managers have cautioned about investing in cryptocurrencies, including UBS Wealth Management, Pimco, T. Rowe Price, and Glenmede Investment Management. “We expect more stringent policy and regulatory controls ahead for crypto as it becomes more mainstream,” said UBS.

Asset Managers Caution of Crypto Investing

A number of asset managers have expressed caution on cryptocurrency after the recent price swings, including UBS Wealth Management, Pimco, T. Rowe Price, and Glenmede Investment Management, the Financial Times reported Monday.

UBS Wealth Management explained that the price volatility that followed the Tesla bitcoin announcement “highlights risks companies face if they take on crypto balance sheet exposure.” The bank added:

We expect more stringent policy and regulatory controls ahead for crypto as it becomes more mainstream.

Last week, Bitcoin News reported that UBS, the largest bank in Switzerland, was exploring offering cryptocurrency services to its wealthy clients.

Pimco’s Nicholas Johnson, a portfolio manager focusing on commodity, quantitative, and multi-asset strategies at Pacific Investment Management Company (PIMCO), questioned the using bitcoin to hedge against inflation. “This idea that crypto is an inflation asset is curious. Inflation assets underperformed in recent years while cryptocurrencies did very well. People are looking for a reason to justify why crypto has gone up,” he opined.

Rob Sharps, president and head of Investments at T. Rowe Price told the publication: “Crypto has an impact across capital markets, and we’re capital markets experts. Ultimately, the mandates we manage for clients are not well suited for investing in cryptocurrencies, and we recognize the high level of speculation in this space.”

Jason Pride, Glenmede’s Chief Investment Officer for Private Wealth, was quoted as saying that “The volatility of crypto is stratospherically high and we often see that, when equities sell off, so does bitcoin and that means it is not a good portfolio diversifier.” He further described:

Our stance with clients is the 10-foot pole rule: stay away from it. I don’t think the Fed and other regulators are fans of the current market structure for cryptocurrencies.

Tom Jessop, head of digital assets at Fidelity, noted that we are still in the early stage of development in cryptocurrency. “We refer to bitcoin as an aspirational store of value and it’s an adolescent in terms of its development due to the extreme volatility. Some investors are willing to accept the volatility as they see bitcoin as a long-term venture opportunity,” he said. Jessop recently said that we will continue to see bitcoin adoption at “an accelerated pace.”

What do you think about these asset managers’ comments about bitcoin and crypto investing? Let us know in the comments section below.

Macroeconomic Trends Boost Bitcoin and Gold, US Dollar Index Shows Bearish Double-Top

15/09/2020 by Idelto Editor

According to a number of reports and commentary from financial analysts, the world is “drowning in U.S. dollars” after the Federal Reserve decided to pump billions of dollars into the hands of 14 central banks via liquidity swaps. Moreover, recent technical analysis shows the dollar’s trade-weighted index chart indicates the USD might be in for a gigantic slide in value in the near future.

As members of the U.S. Federal Reserve plan to convene this week, both gold and bitcoin (BTC) markets have started to climb in value ahead of the meeting. Bitcoin prices rose over 4% during the afternoon’s trading sessions and gold jumped 0.76% as well. The price of one ounce of fine gold is $1,956.24 at the time of publication.

Meanwhile, after a brief upswing in value, the U.S. dollar has started to show signs of weakness again after losing massive amounts of value this year. One financial commentator believes the “world is frozen in response to the deluge of U.S. dollars.”

According to an article written by the business analyst, Stephen Bartholomeusz, “the world has been drowning in U.S. dollars” via “liquidity swaps with 14 central banks.”

“The combination of the access to dollars, the extent of the monetary policy stimulus in the U.S. and the Fed’s recent decision to hold U.S. rates at their current negligible levels – negative in real terms – has seen the U.S. dollar depreciate about 9.3 percent against the basket of its major trading partners’ currencies since March 19,” Bartholomeusz wrote. “That’s its weakest level for more than two years.”

Bartholomeusz added:

A weak dollar exports deflation elsewhere. It helps US exporters be more competitive (albeit while harming importers in an economy with a structural trade deficit) and therefore one that imports more than it exports) while damaging the exports and growth prospects of economies elsewhere.

In addition to Bartholomeusz’s ominous outlook, the U.S. dollar index (DXY) could see a sharper fall in the near future according to a technical analysis report published on Monday. The DXY technical analysis explains that charts show a “bearish, M-shaped chart pattern containing two peaks and a trough.”

If the dollar’s trade-weighted index dips another 5% the pattern will be confirmed the author notes. The pattern is traditionally dubbed the “bearish double-top” and they are typically followed by a strong decline in value.

“The most notorious double-top for the dollar came in 2001-2002, in the aftermath of the September 11, 2001 attacks on the United States, and was followed by a 33% fall in the currency through 2004,” the analysis details. “[The USD] then rallied for about 11 months before continuing its slide to record lows in 2008.”

When the members of the Fed meet on Tuesday and Wednesday, a number of analysts and economists think the meeting will fuel bitcoin and precious metals like gold. The cofounder of Gold Bullion Int. (GBI) and DTAP Capital, Dan Tapiero, championed the two assets after U.S. commercial real estate markets have started to show signs of pending disaster.

“An entire asset class redefined almost overnight by [Covid-19],” Tapiero tweeted. “Total value of all U.S. commercial real estate is $16 trillion. Now entering the largest bear market since the late 80s? 50% price drop wipes out $8 trillion. Major econ drag/knock-on effects [are] huge. Rates stay 0%, + Gold and BTC.”

A recent report published by Pacific Investment Management Co. (Pimco) also explained that the U.S. dollar value drop is just starting and there is “room for the world’s reserve currency to weaken against emerging markets.” Many emerging markets worldwide have advanced the use of crypto assets and decentralized finance (defi) markets.

What do you think about the world drowning in U.S. dollars and the predictions about a major USD decline? Let us know what you think about this subject in the comments section below.

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