Alliance Bernstein has told its clients that bitcoin has a role in investment portfolios. The head of the company’s research arm Portfolio Strategy team said it had changed its mind about bitcoin after previously stating that it had no place in investment portfolios.
Bernstein Alliance Recommends Bitcoin Allocation
According to reports, Inigo Fraser-Jenkins of Alliance Bernstein told clients on Monday that he had changed his mind about bitcoin. Once a bitcoin skeptic, Fraser-Jenkins told clients in 2018 that bitcoin had no place in investment portfolios. However, in a note to clients on Monday, he wrote:
I have changed my mind about bitcoin’s role in asset allocation.
Alliance Bernstein (AB) is a leading global investment management and research firm with $ 631 billion in assets under management. Fraser-Jenkins is co-head of the Portfolio Strategy team at Bernstein Research, the research arm of Alliance Bernstein. He started his career at Bank of England and led the Nomura Global Quantitative Strategy team before joining Bernstein in 2015.
Fraser-Jenkins listed several factors driven by a coronavirus pandemic that have made bitcoin an attractive asset to investors, including increased fiscal expansion and inflation forecasts and tax increases. He added:
The attractions of cryptos are what also make policy makers annoyed. Cryptos have a place in asset allocation … as long as they are legal.
“The larger role that governments are likely to play in economies makes cryptos potentially more attractive,” chose Fraser-Jenkins. “These same forces may also hinder crypto. If they impede policy implementation, then governments might try to restrict them. ”However, a Alliance Bernstein analyst doubts that governments will ban bitcoin or other cryptocurrencies.
Several other factors have helped Fraser-Jenkins change his mind about bitcoin. For example, he noted that bitcoin’s volatility has declined significantly over the past three years, making it a more attractive store of value, and its relative volatility to gold and stocks has dropped to historically low levels.
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