By: Matt Garrott
Markets hate uncertainty and with the U.S. Presidential election decided, one source of uncertainty has been removed. Instead of being barraged with political ads on TV and radio, we are back to hearing about the latest cure for moderate to severe restless elbow, its side effects, and a warning not to take the cure if you’re allergic to it.
The domestic equity markets rallied this month, but it was bitcoin that grabbed headlines as it jumped to almost $100,000. Interest in bitcoin and other cryptocurrencies spiked along with the price, so now is a good time to review our stance on the space.
We continue to consider cryptocurrencies as speculative trades, not investments. The use cases for them are debatable and often rely on a network effect of crypto adopters being in place for true realization. Regulators are jockeying with each other to stake their jurisdiction in the space, but have been hesitant with specific controls.
Large institutional ETF providers finally got approval to launch some crypto ETFs which makes it easier to buy and sell. This goes against the spirit of cryptocurrency, however, as ETF holders don’t own the keys to the coins they buy via ETF. No one knows where crypto will go from here. Innumerable crypto projects have fallen to $0, been abandoned by developers, or exposed as fraud. At the same time, bitcoin itself has exploded in price. We put it in our “Too Hard” pile of investment pitches, but will continue to follow the space and welcome any comments or questions that our clients or friends may have.
