No-Brainer Crypto That Some Billionaires Could Regret Not Buying

Let’s get one thing straight: some of the richest billionaires in the world really don’t like crypto. On financial TV news shows they warn about the risks of crypto. At investor conferences, they downplay the importance of crypto as an asset class. And there is one crypto that they have advised people not to buy time and time again and that is Bitcoin (BTC 2.73%).

Honestly, it’s a little surprising. These are the same investors who search the world for the best investment opportunities. These are the same investors who invest in high-risk asset classes such as private equity, real estate and emerging market stocks. And these are the same investors who have mastered the trade-off between risk and reward. So what is stopping them from buying Bitcoin?

Market development and future growth prospects

In the long term, Bitcoin has the potential to outperform every other asset class. At one point in 2021, Bitcoin was the most performing asset of the entire decade, returning ten times more than the NASDAQ 100. At the time, Bitcoin was returning 230% annually, far higher than the 20% annualized return of the world’s top technology stocks. Granted, that was back when Bitcoin was trading near $60,000, but it gives you an idea of ​​how much potential Bitcoin has as a high-risk, high-reward asset class.

Image source: Getty Images.

Crypto investing is all about finding that 10x or 100x investment, and that may be one reason why many billionaires still don’t trust Bitcoin yet. It just seems too good to be true. In fact, in a recent interview, billionaire investor Bill Gates suggested that cryptos were “100% based on greater fool theory.” In other words, the only reason you want to buy Bitcoin is because you can find a less informed investor to sell it to at a higher price. Based on this thinking, enthusiasm for cryptos is a form of mania, much like the Dutch tulip mania of the 17th century.

At some point, the thinking goes, the price of Bitcoin is going to crash back to Earth. And arguably, this is exactly what has happened in 2022, with Bitcoin crashing back to the $20,000 support level. But even with this horrific turn of events, Bitcoin is still up a resounding 18,531.54% over its entire existence. And many of the sharpest minds in the investment world say we have much higher to go, based on Bitcoin’s ability to rebound from every dip. Some have even placed a $1 million price target on Bitcoin.

Bitcoin goes mainstream

Also, institutional investors are increasingly getting into the Bitcoin game. Consider the recent partnership agreement between Black stone (NYSE: BLK) and Coinbase Global (NASDAQ:COIN), where the world’s largest asset manager linked up with one of the world’s largest cryptocurrency exchanges to offer crypto trading services for large institutional clients such as pension funds and endowments. This means that some of the most recognized names in the investment world will now be dipping their toes into the crypto pool. And the only crypto they focus on, primarily, is Bitcoin.

In addition, some of the biggest banks on Wall Street, including the likes of JPMorgan and Goldman Sachs, are now starting to offer crypto-related trading and custody services for their biggest institutional clients. A major breakthrough came in 2021, when Wall Street banks began seriously discussing crypto as a new asset class. Each asset class has its own unique risk-reward profile, and Bitcoin has more to offer than just insanely high returns. For example, some have argued that Bitcoin can be a hedge against inflation or help reduce the overall risk profile of a larger portfolio. Whether these claims turn out to be true, of course, remains to be seen.

Will Top Billionaires Ever Change Their Minds About Bitcoin?

Billionaire Warren Buffett recently remarked that he wouldn’t buy all the Bitcoin in the world for $25. According to Buffett, Bitcoin does not produce anything and has no intrinsic value. Given that Bitcoin currently has a market cap of roughly $380 billion, this boggles the mind. That means the crypto market must be one of the most inefficient markets in the world. How else could Mr. Market possibly show up every day and offer a price of $20,000 for something that was worthless?

I am convinced that the world’s top billionaires will change their views on Bitcoin sooner rather than later. As large institutional investors start buying Bitcoin for their portfolios, it will become harder and harder for the world’s billionaires to stay on the sidelines.