Bitcoin has been on a remarkable run, surging over 100% so far this year, with more than half of those gains coming after the U.S. election. Many believe this is due to the expectation that the Trump administration and a crypto-friendly Congress will usher in a more favorable regulatory environment for Bitcoin.
Factors Driving Bitcoin's Rise
Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily, outlines several key factors behind Bitcoin's recent price surge:
Increased Government Spending: Bitcoin's rise is a reflection of the market's belief that politicians have increased the national debt by $850 billion in the last 90 days. Bitcoin is seen as a way to protect against this debt expansion and currency debasement.
Cheap Capital and Expanding Money Supply: Expectations of lower interest rates and continued money supply growth are fueling the belief that more capital will flow into Bitcoin, driving its price higher.
Bitcoin's Reflexive Nature: As Bitcoin's price increases, it becomes less risky, attracting more institutional capital. This creates a self-reinforcing cycle that pushes the price even higher.
Stocks and Companies Benefiting from Bitcoin's Rise
Rosen highlights several categories of stocks and companies that are poised to benefit from Bitcoin's ascent:
Crypto Exchanges: Companies like Coinbase, the leading U.S. crypto exchange, are seeing increased trading volumes and revenue as Bitcoin gains mainstream adoption.
Bitcoin Miners: Miners like Hut 8, Marathon, and Riot Blockchain are well-positioned to profit from the rising Bitcoin price.
Crypto-Related Firms: Companies providing crypto ETPs (exchange-traded products), such as DeFi Technologies, can benefit from the growth in crypto assets under management.
Bitcoin Treasury Companies: Firms like MicroStrategy and others that have added Bitcoin to their balance sheets stand to gain as the asset appreciates.
The Potential for Nation-State Bitcoin Adoption
Rosen speculates that a nation-state may have already made a significant Bitcoin purchase, potentially front-running any potential U.S. government move to establish a Bitcoin strategic reserve. He believes this could trigger a "speculative attack" where countries print their own currencies to buy Bitcoin, further driving up the price.
Rosen sees the launch of Bitcoin ETFs as a crucial catalyst for unlocking significant institutional capital flows into the asset. He expects financial advisors and fund managers to start allocating a portion of their portfolios to Bitcoin through these ETF products, which will further boost demand and prices.
The Appropriate Bitcoin Allocation for Long-Term Investors
Rosen suggests that a 30-year portfolio manager might allocate anywhere from 3% to 7% of their portfolio to Bitcoin, depending on their risk tolerance and investment thesis. He notes that the days of recommending a mere 1% allocation are likely behind us as Bitcoin becomes a more established and recognized asset class.
Part 1/4:
The Rise of Bitcoin and Its Impact on Wall Street
Bitcoin Reaches New All-Time Highs
Bitcoin has been on a remarkable run, surging over 100% so far this year, with more than half of those gains coming after the U.S. election. Many believe this is due to the expectation that the Trump administration and a crypto-friendly Congress will usher in a more favorable regulatory environment for Bitcoin.
Factors Driving Bitcoin's Rise
Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily, outlines several key factors behind Bitcoin's recent price surge:
[...]
Part 2/4:
Cheap Capital and Expanding Money Supply: Expectations of lower interest rates and continued money supply growth are fueling the belief that more capital will flow into Bitcoin, driving its price higher.
Bitcoin's Reflexive Nature: As Bitcoin's price increases, it becomes less risky, attracting more institutional capital. This creates a self-reinforcing cycle that pushes the price even higher.
Stocks and Companies Benefiting from Bitcoin's Rise
Rosen highlights several categories of stocks and companies that are poised to benefit from Bitcoin's ascent:
Crypto Exchanges: Companies like Coinbase, the leading U.S. crypto exchange, are seeing increased trading volumes and revenue as Bitcoin gains mainstream adoption.
Bitcoin Miners: Miners like Hut 8, Marathon, and Riot Blockchain are well-positioned to profit from the rising Bitcoin price.
[...]
Part 3/4:
Crypto-Related Firms: Companies providing crypto ETPs (exchange-traded products), such as DeFi Technologies, can benefit from the growth in crypto assets under management.
Bitcoin Treasury Companies: Firms like MicroStrategy and others that have added Bitcoin to their balance sheets stand to gain as the asset appreciates.
The Potential for Nation-State Bitcoin Adoption
Rosen speculates that a nation-state may have already made a significant Bitcoin purchase, potentially front-running any potential U.S. government move to establish a Bitcoin strategic reserve. He believes this could trigger a "speculative attack" where countries print their own currencies to buy Bitcoin, further driving up the price.
The Role of Bitcoin ETFs in Mainstream Adoption
[...]
Part 4/4:
Rosen sees the launch of Bitcoin ETFs as a crucial catalyst for unlocking significant institutional capital flows into the asset. He expects financial advisors and fund managers to start allocating a portion of their portfolios to Bitcoin through these ETF products, which will further boost demand and prices.
The Appropriate Bitcoin Allocation for Long-Term Investors
Rosen suggests that a 30-year portfolio manager might allocate anywhere from 3% to 7% of their portfolio to Bitcoin, depending on their risk tolerance and investment thesis. He notes that the days of recommending a mere 1% allocation are likely behind us as Bitcoin becomes a more established and recognized asset class.