Displaying items by tag: crypto

Once viewed as a fringe asset, bitcoin is rapidly gaining traction with Fortune 500 firms, many of which are now embracing it as a legitimate component of corporate finance. Major players like Strategy (formerly MicroStrategy) and GameStop have turned to convertible notes and other financing mechanisms to amass sizable bitcoin holdings, effectively using the asset as both a store of value and a treasury strategy. 

This shift has catalyzed the development of sophisticated instruments like structured notes—offering downside protection or leveraged upside—alongside Bitcoin-backed loans and custodial accounts with embedded yield features. While these tools may seem like responsible financial innovations, they walk a fine line between risk management and speculative engineering, especially as regulatory and accounting treatment remains murky. 

The entrance of mainstream institutions and the approval of spot bitcoin ETFs have brought new legitimacy, but corporate treasurers still face complex questions about liquidity, governance, and portfolio fit.

Finsum: Whether bitcoin serves as a smart hedge or a risky gamble depends on each company’s capital strategy, tolerance for volatility, and long-term vision.

On May 28, 2025, the U.S. Department of Labor rescinded its 2022 guidance that had discouraged 401(k) plans from offering cryptocurrency investments, signaling a return to investment neutrality. 

The original 2022 Release had raised concerns in the benefits industry by implying heightened fiduciary scrutiny for crypto, leading to legal challenges, though it was ultimately deemed nonbinding. Despite lacking legal force, the 2022 guidance effectively chilled crypto’s inclusion in retirement plans, with GAO data showing minimal adoption and crypto exposure limited mostly to self-directed brokerage windows. 

Under the Trump administration, broader federal policy shifted to encourage digital asset innovation, with agencies like the SEC relaxing enforcement and facilitating clearer frameworks for crypto. While the Labor Department has not explicitly endorsed crypto in 401(k)s, it now stresses fiduciaries must evaluate all investment options contextually and prudently. 

Finsum: Whether this neutral stance extends to other investment types or persists beyond the current administration remains an open question.

Bitcoin recently surged past $110,000, signaling strong investor confidence in blockchain technology as a foundation for the future of money. Rebecca Walser of Walser Wealth Management believes this marks the beginning of a long-term upward trend, even if short-term volatility causes retrenchments similar to gold during liquidity crunches. 

She emphasizes that fluctuations—especially during periods of economic stress, trade negotiations, or capital raises—shouldn’t shake conviction in Bitcoin’s potential. 

Walser argues this evolution will eventually disrupt traditional fiat systems and require a fundamental shift in how banking operates. In her view, Bitcoin, as the original and most established digital asset, is poised to lead this transformation despite the expected market ups and downs.

Finsum: As central banks explore digital currencies and private cryptocurrencies like Ethereum and Dogecoin gain traction, blockchain is emerging as the inevitable backbone of global finance.

Bitwise CIO Matt Hougan believes the long-observed four-year cryptocurrency cycle may be breaking down, suggesting this cycle could be “bigger and last longer” than expected. Traditionally, crypto markets follow a rhythm of three bullish years followed by a correction, often tied to Bitcoin halving events or macroeconomic shifts. 

Hougan argues that despite recent regulatory headwinds, the foundational infrastructure—like stablecoins, DeFi, and tokenization—has quietly strengthened and is now poised to accelerate. He likens the industry to a “coiled spring,” ready to expand rapidly as regulatory barriers are lifted, especially under more crypto-friendly political leadership. 

While he acknowledges the potential for a correction driven by speculative excess, Hougan believes any downturns will be more muted and short-lived than in past cycles. 

Finsum: With maturing markets and a broader, more value-focused investor base, could 2026 bring another crypto winter—or simply the next phase of a longer growth era.

As traditional 60/40 portfolios face challenges from high interest rates, large deficits, and geopolitical uncertainty, BlackRock suggests evolving asset allocations by incorporating alternatives like liquid alts, gold, and bitcoin. Their Target Allocation model portfolios follow a structured process—sourcing, screening, and sizing—to thoughtfully reconfigure bond-heavy portfolios for modern conditions. 

This involves reducing standard bond exposure in favor of bond-like alternative strategies such as market neutral or merger arbitrage, while preserving resilience in recessionary scenarios. 

Screening over 500 liquid alt funds, BlackRock emphasizes operational quality, performance consistency, and true diversification potential before inclusion. Ultimately, portfolio sizing is optimized to align with investor risk profiles, often making alternatives a significant component—up to half of the fixed income portion in balanced portfolios—while adjusting for more conservative or aggressive strategies.

Gold and bitcoin, though more volatile, should be considered for diversification, with gold typically replacing bonds and bitcoin funded from equities.