According to a Fidelity executive, the crypto markets are forming in a manner similar to the 1990s commodities boom
A senior executive at Bitcoin custodial business Fidelity Digital Assets Europe claims that the crypto sector is repeating the commodities bubble of the 1990s.
In a recent interview with Real Vision creator and macro specialist Raoul Pal, Christopher Tyrer claims that crypto markets are shaping up the same way commodities did decades ago.
“Many people are asking: Is [crypto] a legitimate investment class? Is this something that should be included in a standard diversified investing portfolio? These are the same issues that we faced with commodities two decades ago.
And we now know that pretty much every managed portfolio includes some allocation to commodities as a diversifier… The arrangement that we had back then and the setting that we have right now, the similarities are simply incredibly striking.”
Tyrer adds that in the 2000s, blue-chip firms were unwilling to engage in commodities until the right infrastructure was established up. He argues that currently, crypto assets are going through the same trend of expansion.
“Prior to the early 2000s, most investment portfolios didn’t contain an exposure to commodities. They were actually corporate hedging markets. Then we witnessed a succession of what I would call product regulatory market access and infrastructure reforms that established the groundwork and allowed institutional participation. Fast forward to today and I believe that’s where we are with digital assets.”
The CEO also recalls a two-year period of stasis when institutions remained away from commodoties until all of a sudden pouring in hundreds of billions of dollars worth of cash into the then-nascent market. Tyrer argues that the same thing may happen to cryptocurrency.
“From 2000 to 2002, there’s very much no institutional investment into commodities. Then from 2003 to 2010, in that eight-year span, we saw roughly $400 billion flow in.”
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