Reporter Li Di
As people around the world are anxiously waiting for the results of the US election, Bitcoin and gold have gone crazy.
Gold futures stood above the $1950/oz mark, while Bitcoin rose by more than $1,000, breaking through the $15,000 mark, setting a new high in the past three years.
Many voices in the market believe that no matter who wins, safe-haven assets such as gold and bitcoin are the winners. Powell’s speech also released a signal of easing and boosted the rise of safe-haven assets.
Recently, Grayscale Assets, US payment giant Square and other institutions have increased their positions in Bitcoin significantly. A Bitcoin fund that surged by nearly 9% last night has also risen by more than $2 billion this year. While investors are increasing their positions on a large scale, the voice of multi-bitcoins is endless.
But Dario, the founder of Bridgewater Fund, is questioning the hedging function of Bitcoin. He also said that “even gold is not always a reliable safe-haven asset.” In the latest speech, he is firmly optimistic about the RMB.
The gold futures station hit the 1950 mark, and Bitcoin broke $15,000, a new high in the past three years
Gold futures have stood above the $1950/ounce mark.
Gold spot also broke through $1950 per ounce.
Silver futures also rose, rising nearly 7%.
Last night, safe-haven assets have begun to rise. In the early hours of this morning, Powell’s speech further boosted the rise of gold and silver.
The Fed is temporarily “holding no action” in terms of interest rates. Fed Chairman Powell said that the economic outlook is very uncertain; if things deteriorate and tools are still needed, we will make adjustments.
Fxstreet analyst Yohay Elam said Powell said that the pace of economic recovery has slowed, which suggests that the Fed is ready to take action.
MarketWatch analyst Greg Robb said that the Fed did not take immediate action to help the economy, but once again promised to use all its tools, it is expected that the Fed will take more easing measures before the end of the year.
On November 5th, Bitcoin also rose strongly, rising by more than one thousand U.S. dollars during the day, breaking through 15,000 U.S. dollars, the highest level since January 2018.
No matter who wins gold is a winner?
According to CNBC, Coast Capital’s CIO James Rasteh believes that no matter who wins the US general election, gold will benefit, because it means that the US government will likely launch a large-scale fiscal stimulus plan.
Rasteh said that the fiscal and monetary policies of Trump and Biden are almost identical. “The differences portrayed by the two policies are more imaginary than real.” In other words, once the fiscal stimulus plan is launched, trillions of dollars will be printed, and all this will eventually have a very positive impact on gold.
Frank Holmes, CEO of US Global Investors, holds the same view. He believes that given the Fed’s balance sheet expansion and other factors, investors should consider buying physical assets and gold. Holmes predicts that the price of gold will rise to $4,000 per ounce by 2023.
Juan Carlos Artigas, director of the research department of the World Gold Council, also believes that no matter who wins, loose monetary policy is seen as an important factor in ensuring a proper economic rebound.
One Bitcoin fund rose by nearly 9%, and this year’s scale has increased by more than 2 billion US dollars
Bitcoin broke a new high in more than two years, and the GBTC fund that specializes in investing in Bitcoin also rose sharply.
Since the beginning of this year, the fund has grown fiercely, with an increase of over US$2 billion. Recently, ETFStore chairman Nate Geraci tweeted that since December 2017, the assets under management of Grayscale Bitcoin Trust (GBTC) have increased by more than 2.8 billion U.S. dollars, including 2 billion U.S. dollars in 2020, and outperformed those currently listed in the US 97% of exchange-traded funds (ETF).
Public information shows that Grayscale Bitcoin Trust was launched by Grayscale Assets in April 2018. It is known as “the first publicly listed security to invest in Bitcoin alone and obtain value from the price of Bitcoin.” Grayscale Assets is the world’s largest encrypted asset management company. As of October 27, the total scale of Grayscale Asset Management has reached 7.5 billion US dollars.
Many institutions have recently purchased a large amount of Bitcoin
On the occasion of the US general election, Grayscale Assets is continuing to increase its position in Bitcoin. According to China Times, on November 2, Grayscale Investments’ Grayscale Bitcoin Trust holdings increased its holdings by 722 BTC, and the total holdings reached 481712 BTC. This is the 14th consecutive work of Grayscale Investments. Continue to increase holdings of Bitcoin daily.
On October 8, Square, a payment company founded by Twitter CEO Jack Dorsey, announced that it had purchased 4,709 bitcoins for US$50 million (that is, an average of US$10,600 per bitcoin).
Also in October, Forbes stated that the asset management company Stone Ridge recently confirmed that it had purchased 10,000 bitcoins through the New York Digital Investment Group (NYDIG).
Currently, NYDIG manages two Bitcoin funds, namely Institutional Bitcoin Fund LP and Bitcoin Yield Enhancement Fund LP, each with a scale of more than 100 million U.S. dollars.
On October 21, British financial technology company Mode Global Holdings announced that it will hold up to 10% of Bitcoin in its reserves. Mode will become the first public company in the UK to hold a large amount of Bitcoin.
A CEO took a listed company to buy Bitcoin, just bought 2.8 billion, and made 1 billion in less than three months
In August and September this year, the listed company MicroStrategy spent a total of US$425 million (approximately RMB 2.8 billion) to purchase a large amount of Bitcoin.
In August, MicroStrategy said it had purchased $250 million in bitcoin. In September, the company’s CEO said that MicroStrategy had invested another $175 million in bitcoin.
Estimated at a price of 15,000 US dollars, the market value of the bitcoin held by the company has reached 574 million US dollars (about 3.8 billion yuan). In less than three months, it earned 35%, and it earned about 149 million US dollars (about 10 Billion yuan).
Since BlackRock, Vanguard Funds, Norwegian Government Pension and other asset management giants are all shareholders of the company, these asset management giants also indirectly hold Bitcoin.
Before the company bought Bitcoin, the company’s CEO had invested in Bitcoin with his personal assets. The CEO stated that he personally owns 17,732 bitcoins, with an average holding cost of 9882 USD per bitcoin.
According to Cointelegraph’s news on October 28, MicroStrategy’s Bitcoin investment is getting huge returns, with an estimated profit of $100 million. According to data released by crypto researcher Kevin Rooke, from the first quarter of 2017 to the second quarter of 2020, in the past three years, MicroStrategy’s gains from Bitcoin investment exceeded its actual business. The data shows that the value of 38,250 BTC held by this company at the time of purchase in August and September was approximately US$425 million. With the recent surge in the price of Bitcoin, its total value has exceeded US$525 million. In the past three and a half years, Microstrategy has received only $78 million in net income from its business operations.
Many analysts sing more Bitcoin
Recently, the voice of multi-bitcoins is endless.
Analyst Alex Krüger said that if the Democratic Party wins the Congress or Joe Biden (Joe Biden) is elected, it may boost the sentiment surrounding Bitcoin, which may rise to $16,000 in the future.
Barry Silbert, CEO of Grayscale Assets, said, “Whether Trump or Biden wins, it will benefit Bitcoin.”
Anthony Pompliano, co-founder and partner of Morgan Creek Digital Assets, a cryptocurrency investment company, said: “Bitcoin is the biggest winner in the current macro environment. As we have seen, after the market emerged from the 2008 liquidity crisis, when the Fed’s quantitative easing When policies are involved, inflation hedge assets have performed very well.”
Raoul Pal, a well-known investor, recently even stated that the price of Bitcoin may reach US$1 million, making it an asset class with a total value of US$10 trillion and may exceed the gold market.
Parr believes that the issuance of digital currencies by central banks in the future will make Bitcoin a “legitimate part of the system.” What Bitcoin can do is to completely change the global financial system by creating the “Internet of Money”. By then, the various systems will be connected and talk to each other, just like Apple’s iOS operating system and Google’s Android system.
Katie Stockton, founder of Fairlead Strategies, pointed out that “Bitcoin has seen an improvement in short-term momentum in the long-term upward trend, and the next resistance level is close to $14,000.”
He believes that if Bitcoin breaks through $14,000, the next technical level may be at a record high of $20,000. As Bitcoin currently rises above US$13,850, it is only one step away from the resistance of US$14,000. If it breaks through the $14,000 resistance level, Bitcoin is expected to rise to a record high.
Dario is firmly optimistic about the RMB and does not think Bitcoin is a good safe-haven asset
Even though Wall Street is singing more and more Bitcoin, Dario of Bridgewater does not recognize the safe-haven value of Bitcoin.
On November 2, Ray Dalio, the founder, co-chairman and chief investment officer of Bridgewater Associate, the world’s largest hedge fund, delivered a speech at the Hong Kong Fintech Week Conference and expressed his views.
Dario said at the meeting, “Currency should be an effective medium of exchange and a store of value. Bitcoin does not work.”
Dario believes that Bitcoin’s current volatility is too high to be used as a stable value storage tool, and central bank digital currency and other projects have more potential. He also mentioned that in thousands of years of history, even gold is not always a reliable safe-haven asset.
While questioning Bitcoin, Dario expressed his view of bullish RMB at the meeting.
Dario said, “You begin to see the development of China’s capital market that is open to foreign investors, you will see the internationalization of the renminbi, you will see the opening of capital accounts, and you will see the development of financial centers. It’s part of a pattern that happens over and over in history. I think it’s important for people to step back and understand this cycle.”
Dario mentioned that in the past, the global reserve currencies were the Dutch Guilder, the British Pound and the U.S. Dollar. The reason these currencies became reserve currencies was because of trade, and China is currently the largest trading nation.
Dario believes that the renminbi will not necessarily become a reserve currency soon, but the speed will be faster than everyone expected.
Dario is also optimistic about Chinese bonds and expects that the renminbi will benefit from capital inflows. The interest rate differential and economic growth differential are beneficial to the Chinese bond market.
