Chris Wood of Jefferies Investment Firm Cuts Exposure to Gold for Bitcoin

Investment firm Jefferies trims exposure to gold for the first time in years in favour of bitcoin (BTC).

Christopher Wood Cuts Exposure to the Yellow Metal

According to a report by Business Standard, Chris Wood, global head of equity strategy at investment company Jefferies is poised to reduce exposure to the time-tested precious yellow metal in favor of bitcoin.

Specifically, Wood will be cutting the gold position in his long-only asset allocation for U.S. dollar-based pension funds to 45% from 50% and given 5% space to BTC.

However, this does not mean that Wood is no longer bullish on gold. Rather, he said that he will add more BTC to the fund should the premier cryptocurrency drop significantly from its current price range.

“The 50 per cent weight in physical gold bullion in the portfolio will be reduced for the first time in several years by five percentage points with the money invested in Bitcoin. If there is a big drawdown in bitcoin from the current level, after the historic breakout above the $20,000 level, the intention will be to add to this position,” Wood wrote in his weekly note to investors, GREED & fear.

It is worthy of note that previously, the head of equity strategy at Jefferies had refrained from investing in BTC out of a fear of hacking and that it could be declared illegal due to its use for nefarious purposes.

For bitcoin, the year 2020 couldn’t be more dramatic. After bottoming out at sub $3,000 price during the onset of the coronavirus pandemic in March this year, the world’s largest cryptocurrency has made a remarkable comeback and is now breaching its ATH-values almost every other day.

From its March 2020 low, BTC has surged a mammoth 474% and has risen 214% year-to-date (YTD), according to data.

Institutional Interest Rising in BTC

Chris Wood’s bullish sentiment toward bitcoin extends the rising institutional interest in BTC.

As previously reported by BTCManager, business intelligence firm MicroStrategy is now planning to extend $400 million of convertible bonds to purchase more BTC.

Similarly, the CIO of global investment firm Guggenheim Partners recently spoke to Bloomberg opining that bitcoin should be valued at $400,000.