During a discussion at the Exchange conference in Las Vegas, which gathered around 2,000 investment advisors and asset managers, Dominic Rizzo, a global technology portfolio manager at R. Rowe Price—a firm that oversees more than $1 trillion in assets—remarked that now is an opportune time to consider bitcoin investments.
He compared the price of bitcoin to traditional commodities and suggested that investors should adopt a similar mindset. “Bitcoin has consistently traded near its average mining cost. If you view it as a conventional commodity, historically, it’s a favorable time to invest when the price is close to its mining cost,” he stated.
In conventional commodity investing, when the extraction or mining cost is similar to the spot price, it often indicates that the commodity’s price may have hit a bottom or has limited potential for decline. This is a scenario that contrarian investors seek out in the commodities space, as negative sentiment might already be factored into the price when this happens. Rizzo appears to reference this dynamic for bitcoin when paralleling commodity cycles with bitcoin pricing.
As noted by MacroMicro, the current average mining cost for bitcoin is approximately $84,770, while the current spot price is around $87,000.
Capitalizing on the Blockchain and AI Revolution
Rizzo also expressed his belief that blockchain technology and digital payments are vital components of fintech and artificial intelligence (AI).
“As the world becomes more interconnected, we’re shifting from cash to digital payments… I believe digital payments are at the forefront of making transactions efficient and applying software solutions in areas that traditionally have not utilized them,” he remarked.
He noted that blockchain is a significant part of this transition, and he advocates for investors to have some exposure to it, whether through shares in companies like Coinbase or Robinhood, or by investing in cryptocurrencies and miners taking advantage of the AI advancement.