Investing.com - The world’s largest asset manager BlackRock warned that investors should only consider cryptocurrencies if they are prepared to lose everything in its weekly report on Monday.
While cryptocurrencies, such as bitcoin, could gain wider appeal over time they are still too volatile to have a place in mainstream investment portfolios any time soon, according to BlackRock’s global Chief Investment Strategist Richard Turnill.
"We don't see them becoming part of mainstream investment portfolios soon," he said, adding that their volatility makes U.S. stock market turbulence during the financial crisis "almost look placid."
"We see cryptocurrencies potentially becoming more widely used in the future as the markets mature. Yet for now we believe they should only be considered by those who can stomach potentially complete losses," Turnill said.
He indicated that BlackRock is warming to the long-term potential of the underlying blockchain technology.
Blockchain, a distributed ledger technology, enables secure peer-to-peer transactions and may offer “disruptive potential” for a wide range of industries from logistics to pharmaceuticals and financial services, he noted.
However, it still needs to overcome significant hurdles to reach its “promising future,” he added.
“Cautious on bitcoin and bullish on the underlying blockchain technology -- this is an emerging consensus among policy makers and business leaders,” Turnill said.