Asset managers wary of Bitcoin volatility

Asset managers at the company are concerned about Bitcoin’s volatility and the prospect of tighter regulation of the cryptocurrency industry, the Financial Times reports, citing UBS Wealth Management, T Rowe Price and Fidelity Investments.

Tom Jessop, head of Fidelity’s digital assets division, warned that Bitcoin, as a store of value, is in the early stages of development.

“Because of Bitcoin’s extreme volatility, it is an immature asset. Some are willing to accept the fluctuations because they see it as a long-term investment opportunity,” added Jessop.

UBS, the Swiss financial group, expects tighter regulation of the sector. Its representatives noted that the current plunge in the price of digital gold underscores the risks that companies face if they hold cryptocurrency on their balance sheets.

More conservative managers, such as T Rowe Price, view the market as speculative.

“Cryptocurrencies affect all capital markets, and here we are the experts. Ultimately, client-approved investment strategies are not suitable for investments in this asset class, and we recognise the high level of speculation in this space,” said the holding’s president Rob Sharpe.

Earlier reports suggested UBS planned to offer clients access to digital assets.

Earlier, in March 2021, Fidelity Investments filed an application to launch Bitcoin-based exchange-traded fund, Wise Origin Bitcoin Trust.