Grayscale says crypto may offer a new diversification opportunity

Grayscale said cryptocurrencies could emerge as a new investment destination as U.S. household assets are concentrated in equities at a record level while valuations in the crypto market appear relatively less demanding. The firm said about 46% of U.S. household financial assets are currently invested in stocks, with price-to-earnings ratios near historical highs. By contrast, Grayscale said the crypto market is closer to the opposite situation, with much of the leverage cleared out and investor positioning reset after a prolonged bear market. Against that backdrop, the firm said a new recovery cycle may be starting. Grayscale added the key is not to replace stocks with crypto, but to diversify portfolios that are overly concentrated in equities. With crypto fundamentals improving, it said relatively lower price levels in the market cycle may offer a diversification opportunity.