Bitcoin Inflation Hedge - The 400 billion Neuberger Berman Fund recognizes the facts

By: Bharggavi Ssayee

Bitcoin Inflation Hedge - The 400 billion Neuberger Berman Fund recognizes the facts

August 14, 2021 3:58 AM

New York-based private equity management firm Neuberger Berman wants its investors to gain indirect exposure to cryptocurrencies. However, the CEO of the company had a completely different speech regarding Bitcoin (BTC) in early 2021.


An indirect approach to get a green light

On August 11, 2021, Neuberger Berman filed with the SEC regarding its Commodity Strategy Fund. This commodity-focused fund will allow the company to offer investors indirect exposure to cryptocurrencies through Bitcoin and Ether (ETH) futures, Bitcoin Trusts, and exchange-traded funds (ETFs). ).


This fund had more than $ 164 million in assets under management as of July 31, 2021, or 0.04% of the company's total assets under management of $ 402 billion.


This Neuberger Berman filing comes days after SEC Chairman Gary Gensler suggested a possible ETF opening favoring indirect exposure to cryptocurrencies via Bitcoin futures contracts like those of the Chicago mercantile exchange, rather than those based on direct exposure.


Inflation at the heart of the investment strategy

On March 10, 2021, executives at Neuberger Berman sign a blog post from March 10, 2021 titled "The Bitcoin Experiment." They stipulate that “the Bitcoin phenomenon deserves to be closely watched”. In this effect, they evoke various factors, including inflation, which would be at the origin of the rise in Bitcoin:


“We prefer to view [Bitcoin] as an option that pays off when expectations of an uncertain and inflationary future rise and make the finite, unmanaged supply dynamics of cryptocurrency valuable. "


Neuberger Berman has therefore qualified his position on Bitcoin over the months, if we refer to the words of its CEO, Steve Eisman, regarding the king of cryptocurrencies during an interview with Bloomberg in January 2021:


“I don't go near it. I don't understand it ”


Bitcoin and cryptocurrencies in general continue to attract more and more investment firms. New crypto funds are fueling new finance markets with billions of fresh dollars from traditional finance. Institutional adoption of Bitcoin is expected to increase even more with Gary Gensler's recent encouraging talk on ETFs. A growing number of companies, like this NASDAQ-listed company, are now knocking on the doors of the Commission to launch a Crypto ETF.