Episode summary
Evolving Money: Diversifying with Digital Assets (Sponsored Content) | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · Hosts: Carol Massar, Tim Stenovec
Summary
The episode argues that digital assets can play distinct roles in a diversified portfolio because they respond to different drivers than stocks or commodities. The host frames Bitcoin less as “digital gold” and more as hard money plus payment infrastructure: scarce, portable, and easier to move than physical gold. One guest says that matters for “monetary insurance” and for governments or institutions that want an asset outside another country’s monetary policy.
The discussion also focuses on how Bitcoin’s behavior has shifted over time. The guest says it has at different moments acted like a flight-to-quality asset, a risk asset, and now potentially a hedge or insurance asset, with correlations to stocks and gold breaking down. He argues that lower prices can be a buying opportunity if an investor believes the long-term thesis.
A second guest broadens the case beyond Bitcoin to blockchain protocols, decentralized finance, and blockchain-enabled AI. He says diversification means owning different return drivers, and he argues many protocols can be analyzed with traditional equity tools, including revenue, users, cash flow, and balance-sheet models. He also says institutional portfolios may now need crypto exposure because Coinbase’s addition to the S&P 500 brought blockchain into major benchmarks.
Key takeaways
- One guest says Bitcoin should be viewed as hard money with payment-system utility, not just as “digital gold.”
- The guest argues Bitcoin can serve as “monetary insurance” against debasement and instability in traditional assets.
- The second guest says diversification in crypto means owning different drivers of return, from Bitcoin to protocols like Ethereum and Solana.
- He says blockchain protocols can be underwritten like equities using users, revenue, cash flow, and three-statement models.
- He argues that not having digital-asset exposure may now be a risk for institutional portfolios because Coinbase is in the S&P 500.
Notable quotes
“I think of Bitcoin almost as like a child growing up and you know how kids go through different phases of life”
“to me, Bitcoin is a hard currency that comes with its own universal payment system or method of transaction, if you will”
“This is why I think the plumbing argument is in many ways far more interesting when it comes to monetary insurance than the hard asset argument that gold represents”
“So, I wouldn't read too much into any one of these cycles”
“When I think about diversification, I think about it as not just about owning more things, it's about owning different drivers of return”
How the episode opens
Since you're a subscriber to this Bloomberg podcast, we thought you'd be interested in a sponsored podcast called Evolving Money, produced by Coinbase and Bloomberg Media Studios. It explains how institutional investors are adopting the world's newest asset class, crypto. Here's a recent episode.
I think of Bitcoin almost as like a child growing up and you know how kids go through different phases of life. There are the phases where they're good students, then maybe they become teenagers and they need to rebel. Uh you know, maybe they have a punk phase or a goth phase. And we're definitely in one of those transitional phases now.
That's Omeed Malek, a Wall Street veteran and an academic trying to answer the simple question, what is Bitcoin? And by that I mean, is it a currency? Is it a commodity? Is it digital gold or is it a teenager with a questionable haircut? All right, maybe more important than asking what it is, I'm actually interested in its behavior. What is Bitcoin's behavioral profile?
Because that is what will inform how it fits into a diversified portfolio. After we hear more from Omeed, I'm going to bring in Cosmo Jiang for you, general partner and portfolio manager with Pantera Capital, one of the earliest and most established investment firms focused exclusively on blockchain and digital assets. I want to talk with him about other ways institutional investors can get exposure to crypto beyond purchasing Bitcoin.
This is Evolving Money and I'm your host, Angie Lau. This show is co-produced by Coinbase, one of the largest cryptocurrency platforms in the world, — And Bloomberg Media Studios. In this series, we are exploring how crypto is being adopted by traditional financial institutions as the next logical evolution of the monetary system.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- digital assets
- cryptocurrency allocation
- portfolio diversification
- bitcoin
- crypto market risk
Companies and tickers mentioned
- COIN
- Coinbase
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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