Arkie’s Cathie Wood believes that cryptocurrencies could soon become part of the recommended portfolios for everyday investors.
What happened: In her latest interview with CNBC, Wood even further said that the current volatile cryptocurrencies could soon stabilize and act as bonds do.
“We think it will become a better accepted new asset class … We do think it will act, I would say more like the fixed income markets, believe it or not,” Wood said on CNBC’s Closing Bell.
Ark CEO notes that a typical investor portfolio consists of a 60% allotment to equities and a 40% allotment to bonds.
“This idea of a 60-40 balanced portfolio is a bit problematic,” she says, explaining that bond prices are particularly high in history.
‘We have been through a 40-year bull market in bonds. We would not be surprised to see this new asset class become part of the percentages. Maybe 60% in equities, 20% in bonds and 20– in crypto, ”Wood said.
Why it matters: Retail investors were often skeptical about allocating a percentage of their portfolio to cryptocurrencies because of their perceived risk.
Recently, however, some large retail investors have begun making some significant allocations to cryptocurrencies – one of them being billionaire investor Kevin O’Leary, who recently announced a 3% portfolio allocation to cryptocurrency.
Analysts from JPMorgan Chase & Co. (NYSE: JPM) also recently recommended a portfolio allocation of 1% to cryptocurrencies.
However, Wood’s recommended 20% crypto allocation exceeds far more than typical fund managers and investment banks have previously suggested.
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