Gold has for centuries been perceived as the ultimate store of value. However, some institutional investors are now rethinking this notion. One such institution is BNY Mellon Fund.
The institution, one of the oldest in the U.S, has stated that its micro-cap market segment has been underperforming due to its failure to invest in crypto-firm Microstrategy. The company added that its funds would have returned better investments had it taken some exposure to Bitcoin.
The firm’s sentiments come after its small-cap fund returned 35% between 1st September 2020 and February 28th, 2021. While this is an impressive return, it underperformed other key indices such as the Russell 2000, which registered a return of 41.7% in the same period.
The firm’s regrets for not jumping into the crypto bandwagon are evident in its SEC filings. In its filing, BNY Mellon stated that its fund performance was affected by its failure to invest in Microstrategy, whose stock has shot up considerably after it invested over $3 billion in Bitcoin.
The firm also noted that its performance had been hurt by its investment in Alamos Gold, a gold mining company that underperformed due to sluggish gold prices.
Data shows that firms with some level of exposure to Bitcoin through Microstrategy have performed well all through. That’s because the value of Microstrategy stock has skyrocketed by over 300% since it announced that it was buying heavily into Bitcoin.
After missing out on Microstrategy, BNY Mellon is not leaving anything to chance. The firm has announced that it is taking part in a Series C funding round for Fireblocks, a crypto custody company.