The number of billionaires investing in cryptocurrencies increased last year, and that trend could continue into 2022 as the fear of cryptocurrencies grows.
Formerly anti-crypto investors are increasingly turning to Bitcoin (BTC) and other cryptocurrencies as a hedge against concerns about fiat currency inflation.
One example is Hungarian billionaire Thomas Peterffy, who in a Bloomberg report on Saturday said it would be prudent to have 2% to 3% of one’s portfolio in crypto assets just in case fiat “goes to hell”. His fortune is said to be worth $25 billion.
Peterffy’s company, Interactive Brokers Group Inc., has announced that it would offer crypto trading to its clients in mid-2020 after the demand for the asset class increases. The company currently offers Bitcoin, Ether (ETH), Litecoin (LTC), and Bitcoin Cash (BCH) but will be expanding that option by 5 to 10 coins this month.
Peterffy, who holds an undisclosed amount of crypto himself, said that it is possible that digital assets could reap “extraordinary returns” even if some could go to 0. “I think it can go to zero, and I think it can go to a million dollars. I have no idea.”
Bridgewater Associates founder Ray Dalio is another renowned billionaire who revealed his portfolio contained some Bitcoin and Ether last year. This revelation came just a few months after he questioned crypto’s properties as a store of value.
Now, he has changed that view and views crypto investments as “alternative money” in a world where “cash is trash” with inflation eroding purchasing power.
At the end of December, Dalio commented that he was impressed with how cryptocurrencies exist before stating, “Cash, which most investors think is the safest investment is, I think, the worst investment.”
Billionaire hedge fund manager Paul Tudor Jones also bought Bitcoin last year, seeing the move as a hedge against inflation.
Stimulus packages due to the pandemic have caused economic instability around the globe, the consequences of which could last for decades. In the United States, inflation is at a four-decade high of 6.8%. This has resulted in a surge in the Consumer Price Index as the costs of daily goods continue to increase.
The billionaires are already seeing the danger signs with fiat currencies and central bank manipulation, and they are increasingly turning to cryptoassets. The year 2022 will be likely to see more wealthy investors join their ranks if the trend continues.
