Citibank’s David Bailin believes that bitcoin will do well because of the level of interest from investors. While stating that the cryptocurrency can be part of a portfolio, the executive sees better investment opportunities than bitcoin in “giant unstoppable trends.”
Bitcoin ‘Is Going to Do Well,’ Citi Executive Predicts
David Bailin is Managing Director and Chief Investment Officer (CIO) at Citi Private Bank, a subsidiary of Citigroup dedicated to serving wealthy individuals and families. He is listed on the Citibank website as a “wealth expert.” Bailin talked about bitcoin in an interview with Yahoo Finance Wednesday. He said:
I tell people there’s no doubt that I think bitcoin is going to do well because of the level of interest that’s coming from everyone.
However, the Citi executive noted that it “scares” him “on a fundamental basis.” Bailin joined Citi in 2009 as the Global Head of Managed Investments and was promoted to Global Head of Investments in October of 2017.
Bailin explained that “At Citi Private Bank and at Citi Global Wealth, we are really focused on this concept of core and opportunistic investing.” The former represents 85% or more of the total holding in a traditional portfolio and is focused on “fundamental investing.” The latter is where Citi clients can choose to have exposure to bitcoin.
The Citi Private Bank CIO cautioned:
To get that exposure to bitcoin, if you don’t own the actual bitcoin, any of these funds or structures can be a very, very inefficient way to do that.
In January, Citi announced that it has created a single wealth management organization, Citi Global Wealth, unifying wealth management teams in Global Consumer Banking (GCB) and the Institutional Clients Group (ICG).
CIO Looking for Ways to Give Clients Exposure to Bitcoin But Sees Better Opportunities Elsewhere
Bailin said he has been looking at ways to offer his clients exposure to bitcoin, including a “total return swap” that could allow clients to “invest in the price appreciation of the actual digital currency.” He opined, “I think that’s probably the most efficient way to do it.”
The Citibank wealth expert added that although bitcoin may be the talk of the town, he sees better opportunities for Citi clients in “unstoppable trends,” like big data, satellite technology, solar, and more. The CIO opined:
These kinds of giant unstoppable trends, as we call them, are really wonderful investment opportunities, that are probably in the long term, or in my view definitely in the long term, way better than bitcoin.
He added that with these investments, “you can identify them, you can quantify them, you can find companies that are engaging them and you can see that the size of the market we are talking about is extraordinary.”
Earlier this month, Citigroup released an in-depth report stating that bitcoin is at a tipping point and could become the preferred currency for international trade. “We could be at the start of massive transformation of cryptocurrency into the mainstream,” the firm wrote.
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