Former Bitcoin opponent says crypto is an effective hedge against currency debasement

Financial industry veteran George Ball believes investors would be prudent to allocate a “small part” of their portfolio to cryptocurrencies — marking a major departure from his previous stance towards digital assets. 

In an interview with Yahoo Finance, Ball described cryptocurrencies like Bitcoin (BTC) as an “attractive” option for investors looking to hedge against currency debasement. His comments came as Congressional lawmakers mulled a $1.9 trillion relief bill that would put provide up to $1,400 in direct stimulus payments to Americans impacted by Covid-19.

“I've never said this before, and I've always been a blockchain, cryptocurrency and Bitcoin opponent. But if you look now, the government cannot stimulate markets forever, the liquidity flood will end," Ball said.

He continued:

"With the cryptocurrencies, I think there is a fundamental hydra-headed shift that makes them attractive as a part, a small part, of almost any portfolio.”

If higher inflation leads to currency debasement over the long term, Ball said, “then the cryptocurrencies have a great deal of allure.”

Ball, who served as Chairman of Prudential Financial between 1982 and 1992, began to change his tune on Bitcoin in August 2020 when he told investors that now was the time to seek exposure to the digital asset. At the time, one Bitcoin was worth roughly $12,000. It's presently valued at just over $48,000. 

Wall Street veterans like Ball are warming to cryptocurrencies as they’ve watched Bitcoin pull a 5x move in less than six months. Institutions like JPMorgan and Morgan Stanley are eyeing the Bitcoin market, whereas firms like BNY Mellon have already started to custody the digital asset.