Octagon Strategy – the Case for Investors Sticking out the Volatility in Bitcoin and Ethereum

During the Month of May, a price correction for bitcoin wiped off nearly $4 billion in its market value.

KEY TAKEAWAYS: 

• Cryptocurrencies are partly becoming more popular because countries and companies are taking a closer look at the technology that underpins them: blockchain. Japan, for example, approved bitcoin as a legal payment method in April.
• For context: $100 of bitcoin bought in 2010 is worth more than $75 million in 2017.
• Analysts have made varied predictions about where prices and market capitalization for digital assets are headed.
• BTCC’s Lee told CNBC he expected the market cap for bitcoin to hit at least $1 trillion, if not more, by 2025

“We’re now sort of at … a tipping point, where people are now considering bitcoin or ethereum or digital assets as more mainstream,” Dave Chapman, managing director of Hong Kong-based commodities and digital assets trading house Octagon Strategy, told CNBC. “A lot of the people that we service are actually very comfortable with having 1 percent of their net worth into bitcoin or ethereum.”

To them, it’s “just a natural extension of all their diversification of their portfolio” that includes other asset classes such as properties, precious metals or index funds.

Chapman added that while volatility may be off-putting, the returns on digital asset classes remain extremely attractive to investors. He said, “There’s no other asset class in the world that could’ve given you the historic performance of this sector … the historic performance, which is obviously not representative of future earnings, … does appeal to a lot of people.”