Coin toss
by Andrew Hardy, CFA
Digital gold or “index for money laundering1 ”? Fiat currency hedge or irrational mania? Bitcoin divides opinion more than most, but the bulls are in the ascendency at present and the 12-year old cryptocurrency is gathering many new followers as a result. Its 6-fold increase in price in the last year has been the driver; creating a FOMO (fear of missing out) effect whilst also increasing the size of its market, which reached $1 trillion over the weekend, to a level where institutions begin to consider it more seriously. While we expect that cryptocurrencies will become more mainstream over the coming years, we’ve never held Bitcoin in portfolios, nor do we have any plans to include it. I’ll provide a few thoughts around this here.
Market Snapshot
- Global equities returned -0.4% last week whilst global bond yields rise.
- The Pfizer-BioNtech vaccine is reported to be 89.4% effective in preventing Covid-19 infections according to an Israeli study.
- Brent crude oil rose 0.8% to $62.9 a barrel.
- Gold fell -2.2% to $1784.3 per ounce.