An international phenomenon, cryptocurrency adoption has been on the rise since its inception in 2021. In just seven months, major financial firms and leading banks announced direct and indirect investments into crypto-related products as a means of diversifying their portfolio.
Neuberger Berman is now among this list after being recognized by Bloomberg for becoming the latest investment management firm to enter this market which now spans across all corners of the world including Japan where bitcoin became legal tender last year following an 8 percent drop in transactions that forced Tokyo’s largest exchange to cease operations because it couldn’t handle them anymore due largely to new regulations imposed by Japanese authorities who were concerned about money laundering risks associated with cryptocurrencies at home.
According to a new SEC filing, Neuberger Berman Commodity Strategy Fund will be able to invest in cryptocurrency derivatives like Bitcoin futures and Ethereum futures.
In an official SEC filing this week, the company mentioned that its investment strategy would allow for actively managed exposure to cryptocurrencies through things like Bitcoin Futures and Ethereum Futures.
When the cryptocurrency market cap jumped by nearly $700 billion over three weeks, many traditional investment managers got in on the hype with their own investments.
Desperation Move?
And while it may seem like a move of desperation for those who missed out on Bitcoin’s meteoric rise from 2009 to the present day, some analysts argue that this is merely an attempt at catching up and gaining indirect exposure to bitcoin through other means.
This strategy also includes investing in trusts and ETFs which would provide investors with more ways of getting into cryptocurrencies without taking major risks themselves…but even these options are not quite as safe as they sound – there have been reports circulating about how funds such companies invest financial resources could be put at risk due to high volatility experienced recently especially among newer currencies.
High-level Volatility – What Does The Future Hold?
A cryptocurrency market is a volatile place, with the value of digital currency changing every day and reaching extreme highs or lows. While this volatility has been great for those speculating in Bitcoin prices over the last year, it’s not always good news if you’re an investor looking to cash out on your investment at some point.
The SEC warned investors about cryptocurrencies back in December 2017 when they released their statement telling everyone that “the Fund’s investments are subject to fluctuations based on changes within these markets.”
The body mentions how cryptocurrency values can be determined by supply and demand which usually happens through electronic exchanges like CoinBase – but as we’ve seen since ETH was valued at around $1,400 before Christmas only to drop down below $700 just weeks in.
There are many potential risks to investing in cryptocurrency, including regulatory changes, a crisis of confidence, or flaw.
The price of cryptocurrencies could drop precipitously for any number of reasons; the most important being government regulation and user preference shifts.
In 2020, Ruffer Investment Company made one of the first major investments in Bitcoin by allocating 2.5% funds to this emerging asset class and increasing their exposure from gold holdings.
After a year with some losses due to volatility, they found that when bitcoin fell below $5000 per coin for two weeks at a time near June 2021 it was an opportune moment because prices had dropped enough but were still higher than where they began investing so there would be more profit gained on these positions if bought back now – which is what happened for them! They saw such success over this period that not only did it offset any other loss also future trading results are looking much better as well (hopefully!).
