The recent volatility in bitcoin prices triggered by Tesla’s Elon Musk has raised new doubts among institutional fund managers over the future of cryptocurrencies as an asset class.
UBS Wealth Management, Pimco, T Rowe Price and Glenmede Investment Management were among the firms that have expressed reservations in recent days about the potential of cryptocurrency investments.
The upheaval came after Tesla said it would no longer accept payment in bitcoin for its electric vehicles due to environmental concerns, and Musk jokingly referred to dogecoin, a rival cryptocurrency, as a “hustle” during an appearance on the Saturday Night Live television show.
“Our stance with clients is the 10-foot pole rule: stay away from it,” said Jason Pride, chief investment officer of private wealth at Glenmede. “I don’t think the Fed and other regulators are fans of the current market structure for cryptocurrencies.”
Rob Sharps, president and head of investments at T Rowe Price, told the Financial Times: “Crypto has an impact across capital markets, and we’re capital markets experts. Ultimately, the mandates we manage for clients are not well suited for investing in cryptocurrencies, and we recognise the high level of speculation in this space.”
