Monday, January 29, 2018

Markus Mueller of Deutsche Asset Management warns investors of "total loss" when buying bitcoin






An employee of the Tokyo Stock Exchange (TSE) reacts as he works at the bourse in Tokyo August 9, 2011. The Nikkei stock average closed down 1.7 percent on Tuesday, having trimmed losses on bargain hunting after the index tumbled more than 4 percent in the wake of a plunge on Wall Street and a downgrade of U.S. sovereign debt.
REUTERS/Kim
Kyung-Hoon




  • Markus Mueller, Global Head of the Chief
    Investment Office at Deutsche Asset Management warns investors
    of "total loss" when buying bitcoin.



  • "We do not recommend that. It’s only for investors who
    invest speculatively," he said in an interview.



  • Mainstream investors and institutions remain split on
    cryptocurrencies, with some see it as the future of global
    markets, and others remaining highly sceptical.




Investors in bitcoin face a "realistic risk of total loss" and
everyone but the most speculative should steer clear of
cryptocurrencies, a senior staff member at the asset management
arm of Deutsche Bank has warned.


"We do not recommend that. It’s only for investors who
invest speculatively," Markus Mueller, Global Head of the
Chief Investment Office at Deutsche Asset Management
said in an interview with Bloomberg.


"There is a realistic risk of total loss." 


Mueller went on to say that for bitcoin to considered a real,
tradeable asset that Deutsche AM may include in its portfolio,
huge strides are needed on "regulation, security and
transparency," in the crypto world.


"Important issues such as liability and documentation are
unclear," he said. "We are still at the very beginning."






"When security and trust are created, crypto-currencies can
be assessed like established asset classes. It is possible that
the governance required will exist in five to ten years from
now," Mueller added.


Mainstream investors and institutions remain split on
cryptocurrencies. Most see at least some scope for the blockchain
technology underlying bitcoin to have real world applications,
but many institutions see bitcoin itself (as well as other
cryptocurrencies) as worthless exercises in speculation, not
worth the distributed ledger they're printed on.

Late in 2017, for example, Paul Donovan,  the
global chief economist at UBS's wealth management arm,
tore into the argument that cryptocurrencies could eventually
replace fiat currencies
 like the pound and the
dollar.


"The problem that cryptocurrencies face is that they fail the two
key metrics of what makes a currency a currency," Donovan said.
"A currency has to be a widely used medium of exchange.
Cryptocurrencies are never going to achieve that. Period."


Mueller's assertion that Deutsche AM will steer of the crypto
space for the foreseeable future comes after analysts at boutique
research house Bernstein said similar.


"Cryptocurrencies and underlying blockchains seem set to
grow and become a disruptive force. Thus they will have
significant implications for investors. But, for now at least,
they do not have a direct role in asset allocation," a note from
a Bernstein team led by Inigo Fraser-Jenkins circulated last week
said.








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