Episode summary
Evolving Money: Diversifying with Digital Assets (Sponsored Content) | Bloomberg Daybreak: US...
Summary
The episode argues that digital assets can play a distinct role in a diversified portfolio because they respond to different return drivers than stocks, bonds, or commodities. The host frames Bitcoin less as “digital gold” and more as hard money with a built-in payment rail, emphasizing portability, scarcity, and the ability to move value quickly across borders.
One guest says Bitcoin’s behavior has changed over time: at points it acted like a flight-to-quality asset, then moved with risk assets, and more recently has started to look like a form of monetary insurance. He argues that this makes Bitcoin useful for institutions facing dollar debasement, de-dollarization, and uncertainty around reserve assets, especially because it is easier to store and transfer than gold.
A second guest broadens the case beyond Bitcoin. He says investors should think in terms of different drivers of return, with opportunities in protocols like Ethereum and Solana, plus applications built on top of them such as decentralized finance and blockchain-AI intersections. He also argues that blockchain assets now matter for benchmarked institutional portfolios, and that analysis of protocols can resemble traditional equity underwriting using revenue, cash flow, and balance-sheet models.
Key takeaways
- The first guest says Bitcoin is better understood as hard money with a payment system than as “digital gold.”
- The first guest argues Bitcoin may function as monetary insurance when traditional assets are under stress.
- The second guest says diversification in crypto means owning different drivers of return, not just more assets.
- The second guest says institutional investors can underwrite some blockchain protocols like equities using onchain data and three-statement models.
- The second guest argues that blockchain is becoming a required portfolio consideration because Coinbase entered the S&P 500 benchmark universe.
Notable quotes
“What is Bitcoin? And for an institutional investor, what role does it play in a portfolio”
“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”
“I think the answer is very much yes. And that is, you know, a driver of some of the interest that we're seeing”
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? if they're 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 Omid Malakin, 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 Omid, I'm going to bring in Cosmoang for you, general partner and portfolio manager with Panta 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 Laauo. 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. Let's return to Omid Malakin.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- digital assets
- cryptocurrency
- portfolio diversification
- risk and return
- crypto asset allocation
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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