Musk has always been tongue in cheek with his crypto dabbling,but his latest posts have sown confusion across the industry and revived the debate over whether the nascent asset class is a serious investment.
Can bitcoin ever be a hedge against inflation and gold alternative with volatility like this? And is it simply a running joke on Twitter for the world’s second-richest man?
These questions are resonating with GAM Holding,which oversees 124.5 billion Swiss francs ($177.6 billion),as unpredictable swings in crypto are proving a major drawback.
“Its volatility is so huge that it can actually distract clients from their investment goals,” said Julian Howard,head of multi-asset solutions at the firm. “It’s often driven by tweets rather than fundamentals.”
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Before this month’s roller-coaster,the widespread adoption of crypto had been on an upswing,withTesla’s $US1.5 billion ($1.9 billion) purchase of bitcoin in February a watershed moment. At the time,Musk announced he would allow customers to buy cars with bitcoin and would keep a portion of Tesla’s balance sheet in the token.
The move,the first by a major corporation,raised expectations that other corporate treasurers would follow suit and adoption of crypto as a medium of exchange would take hold. Goldman Sachs Group and Morgan Stanley also announced plans to offer their clients exposure to crypto.