By Josiah Wilmoth
Hedge fund manager Brian Kelly doesn’t just believe in the future of cryptoassets — he’s betting the majority of his portfolio on it.
Hedge Fund Manager Brian Kelly Invests 90 Percent of Assets in Cryptocurrency
“Like 90 percent,” Kelly, a regular CNBC contributor, estimated on the network’s “Squawk Box” when asked how much of his wealth was tied up in cryptoassets. “I run a fund. I have my money in that. I’ve got investments elsewhere.”
Kelly, who founded BK Capital Management, oversees the BKCM Digital Asset Fund, which provides its investors with exposure to both cryptoassets and blockchain companies.
As Strategic Coin reported, Kelly recently inked a deal with fund provider REX to launch a suite of cryptoasset exchange-traded funds (ETFs), beginning with a bitcoin ETF that would track the price of bitcoin futures contracts.
However, the two firms have been prevented from moving forward with these plans because the US Securities and Exchange Commission (SEC) has stated that it is not yet comfortable approving retail-focused investment products related to cryptoassets.
‘Not for Everybody’
Although he is long-term bullish, Kelly cautions that holding such a large percentage of one’s wealth in cryptoassets requires a particular temperament and investment horizon.
“But that’s not for everybody,” said Kelly, of his heavy allocation of his investments into cryptoassets. “I’m making a big bet” and “I am comfortable” with wild market swings.
Indeed, even most financial analysts who are bullish on cryptoassets recommend that investors only place a small portion of their net worth — billionaire Mark Cuban says no more than 10 percent — into them and diversify the remainder of their investments into traditional equities.
The importance of diversification has been quite apparent in recent weeks, as the cryptocurrency market has endured a fairly severe correction. It has especially proven hazardous to individuals who invested in cryptoassets using credit cards or personal loans, gambling that they would be able to use profits to pay off the balance.
This risk has apparently become so pronounced that many of the world’s largest credit card issuers have updated their policies to prohibit customers from using their cards at cryptocurrency exchanges and brokerage platforms.
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Featured Image from CNBC