Pension adviser calls for institutional investors to ‘consider crypto’

Boston-based pension and endowment adviser Cambridge Associates has called for institutional investors to take a leap of faith into the cryptocurrency ecosystem.

Financial institutions have often held a pejorative view on the digital asset class, mostly due to the unregulated nature of exchanges and the rise of cybercrime.

However, the tide seems to be turning from an institutional standpoint. Last week, it was reported that JP Morgan will launch its own cryptocurrency, while Morgan Creek raised $40 million for two pension funds in Virginia.

And now Cambridge Associates believes cryptocurrency investments could offer substantial returns in the long term.

“Despite the challenges, we believe that it is worthwhile for investors to begin exploring this area today with an eye toward the long term,’’ said Cambridge Associates analysts, as quoted in Bloomberg.

“Though these investments entail a high degree of risk, some may very well upend the digital world.’’

In spite of the apparent increase in institutional investment, cryptocurrency prices have been on a steep decline since the start of 2018, with Bitcoin falling from $20,000 to $3,600, while many altcoins have lost more than 95% of their value.

“The dramatic declines that swept across the crypto space raised questions about the future of these assets and the blockchain technology that underpins them,’’ the analysts added.

“Yet, in looking across the investment landscape, we see an industry that is developing, not faltering.’’

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