Investment management giant Pimco has announced its acceptance of digital assets and plans to edge into cryptocurrency trading gradually.
In a CNBC interview on Wednesday, Daniel Ivascyn, Pimco’s chief investment officer (CIO), said the firm is looking to increase its digital currencies exposure. He noted that the firm has dipped into cryptocurrencies, with some of its portfolios already investing in crypto-linked securities.
Ivascyn laid out a plan for gradual increments into the digital assets class as part of Pimco’s quaint-oriented or trend-following strategies. The move offers the most recent evidence that major institutions have started embracing cryptocurrencies as a viable investment option.
Pimco is one of the largest asset managers in the world, with $2.2 trillion worth of assets under its management. It has a wide range of clients, including:
- Public and private pension funds
- Sovereign wealth funds
- Central banks
- Foundations
- Financial and non-financial corporations
- Family offices
- Financial advisors and
- Individual investors.
Pimco plans to take baby steps in the rapidly growing cryptocurrency sector. The CIO noted that a lot of time would be spent on internal diligence to speak to investors. According to Ivascyn, cryptos like bitcoin can work as an inflation hedge and a store of value.
Preparing for a rapidly changing financial environment
With the increasing mainstream acceptance of digital assets, more institutions have dived into crypto investments for the better part of 2021. The decentralized nature of digital assets is an opportunity for many, but it can also disrupt the financial industry.
Ivascyn argues that decentralized finance will be disruptive, and it may very well disrupt Pimco’s business and the industry. The firm is considering where such a scenario would take them to ensure they’re competitively prepared to deal with the rapid changes.
The CIO acknowledges the significant value proposition cryptocurrencies offer, especially for the new generation of investment communities and younger generations. Most of Pimco’s clients are already turning to crypto, with the US inflation growth denting confidence in other assets.
Institutions no longer underrating digital assets
The growth of cryptocurrencies is unavoidable, and more institutions have embraced digital tokens. Major finance companies like Fidelity and PayPal have made moves into crypto. Square and MicroStrategy have even used their balance sheets to buy bitcoin.
Banks like Morgan Stanley have been among the first to offer bitcoin funds to clients, with others like Goldman Sachs quickly following suit. With bitcoin recently shuttering all-time highs, cryptocurrencies continue to emerge as a major opportunity that cannot be underestimated.
