Earlier this month legendry hedge fund manager Stan Druckenmiller said he owned bitcoin.

“I have warmed up to the fact that bitcoin could be an asset class that has a lot of attraction as a store of value to Millennials,” Mr Druckenmiller said.

Billionaire hedge fund manager Paul Tudor Jones also weighed in, confirming he had take a small position and that bitcoin was in its “first innings”.

“I’m not a bitcoin flag bearer but bitcoin has this enormous contingent of really smart, sophisticated people who believe in it. You have a crowd of people who are dedicated to seeing bitcoin succeed in it becoming a store of value. “

Investment group Pendal Group is taking a stake in Bitcoin through futures contracts.  Dreamstime

Bitcoin is now trading at $US18,400 ($25,000), close to its record which is just shy of $US19,000.

The popularity is also said to be high among wealthy individuals. A survey, carried out by deVere Group, one of the world’s largest independent financial advisory organisations, found that 73 per cent of poll participants are now already invested in or will make investments in digital currencies, such as bitcoin before the end of 2022.

Corporates are also taking position, with the treasuries of listed companies Square Payments and MicroStrategy owning bitcoin.

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“We have so many clients asking us about bitcoin and what to do and how to get access. Large institutions have stayed away so far, but high-net-worth clients and wholesale investors are leading the charge,” Pendal’s Mr Gor said.

His fundamental analysis of bitcoin starts with the idea that government bonds are becoming less relevant, especially as central banks spew out trillion-dollar quantitative easing programs.

Bitcoin is a cockroach that exists. They can’t ban it out of existence.

— Pendal Group head of bond, income and defensive strategies Vimal Gor

“COVID just accelerated the large structural trends that were already in place. The first and main one was falling official interest rates and bond yields. With large scale central bank QE programs in place, bond yields are going to stay low for a very long time.”

“We think ultimately that government bonds will turn into a dead asset class, so we now have to imagine what it will be like for other assets classes when bonds are no longer relevant to hold in a portfolio.”

Investors now have to chase alpha but there are fewer places to search for this.

“Obviously commodities and cryptocurrencies have a part to play in the answer.”

Mr Gor sees bitcoin as a social construct like gold and a bet on the digitisation of the economy.

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But he thinks bitcoin is superior to gold as a social contract and store of wealth because its easier to transact, there are flat running costs, and bitcoin has a finite and decreasing supply.

“Fiat currency is not like that. It can just be printed by the central banks. We have been positioning in gold for our clients for many many years now. Now we’re doing it with bitcoin.”

Mr Gor is not a revolutionist who thinks the fiat currency system will collapse.

“The system will just evolve. Can we honestly sit here and say that in 10 years time there won’t be more digitisation and cryptocurrencies? I don’t think so.”

“So we think it’s a very clear, and cheap, call option on the ongoing digitisation of the economy. For this reason we have long exposure in bitcoin for some of our client portfolios.”

Reserve Bank governor Philip Lowe dedicated a specific section of his first speech following the country’s first formal QE program to the digitisation of the economy.

“Digitalisation,” Dr Lowe said, “is not only helping Australians deal with the pandemic, but it will also boost productivity and can help drive future economic growth.”

For Mr Gor that’s a locked in social contract.

“Bitcoin is a cockroach that exists. They can’t ban it out of existence.”