- Citi Private Bank's David Bailin says bitcoin "is going to do well" due to the "level of interest."
- The CIO said crypto can be a part of the smaller, "opportunistic side" of clients' portfolios.
- Bailin also warned investors of the inefficiency of many bitcoin investment vehicles.
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Citi Private Bank's Chief Investment Officer David Bailin told Yahoo Finance on Wednesday that bitcoin be a part of the "opportunistic side" of any portfolio.
In the interview, Bailin said that he believes bitcoin "is going to do well because of the level of interest that's coming from everyone," but noted the cryptocurrencies' rise scares him "on a fundamental basis."
The private wealth manager explained how his firm is dividing customers' portfolios into a "core" side and an "opportunistic" side. The "core" side will represent 85% or more of total holdings and be focused on "fundamental investing."
The "opportunistic" side is where clients might elect to purchase bitcoin. However, Bailin said that if investors do choose to buy bitcoin, they should be careful in how they go about it.
The Citi Private Bank CIO warned that bitcoin funds and trusts "can be a very, very inefficient way" to invest in the digital currency.
Bailin said he was looking at alternative ways to invest in bitcoin for his clients, including a "total return swap" that could allow them to "invest in the price appreciation of the actual digital currency."
Bailin added that although bitcoin may be the talk of the town, he sees better opportunities for clients in "unstoppable trends" like big data, satellite technology, solar, and more.
The CIO said these "giant unstoppable trends, as we call them, are really wonderful investment opportunities, that are probably in the long term, or in my view definitely in the long term, way better than bitcoin."
Although no one is calling Bailin a crypto bull, the CIO is the latest of several institutional investors to come out with a more bullish tone on bitcoin.
Investing legend Howard Marks softened his stance toward the digital currency in a video interview with The Korea Economic Daily on Monday and said that his initial response to bitcoin was a "knee-jerk reaction."
Bitcoin traded down 2.77% on Wednesday as of 11:22 a.m. ET.
