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It seems that we are at a moment where it’s essential to shed outdated perspectives (particularly for men). Let’s not dwell on the past but instead visualize a more promising future. And while you’re at it, consider investing in Bitcoin.
As a regular person, this prospect is quite daunting. Currently, Bitcoin lacks the attributes of a functional currency. Attempting to use Bitcoin to purchase a coffee or pay for taxes remains a challenge in most parts of the globe. Furthermore, it doesn’t generate yield or pay dividends, nor does it offer any ownership claim beyond its own existence. While there are rational individuals within its ecosystem, many misfits and fraudsters dominate, especially when looking past Bitcoin to the extensive array of smaller tokens and coins available.
Yet, the recent increases in Bitcoin’s value since Donald Trump’s re-election as President of the US are hard to overlook. The price has surpassed $90,000 for the first time, representing a growth of over 34 percent since Election Day just last week. A target of $100,000 by year’s end appears quite achievable. What an exciting era to witness, and a lucrative one for Bitcoin investors.
Analysts at Bernstein aren’t holding back their enthusiasm. “Welcome to the crypto bull market,” they noted in a statement on Monday. “Acquire everything you can…” They encourage those who previously hesitated to enter the crypto space due to regulatory concerns to “rethink their perspectives.”
However, UBS cautions against the unpredictability that comes with crypto investments. “We remain doubtful that crypto assets can make any significant contributions to practical and transformative applications in the real world,” they stated.
Searching for a macroeconomic rationale for crypto prices can lead one to frustration. But let’s take Bernstein’s advice and approach this differently. This surge is driven by two influential elements: sentiment and vision.
Emotional factors have always played a significant role in the fluctuations of cryptocurrency prices. In this case, Trump has affiliated himself with crypto advocates during his campaign, attending the Bitcoin 2024 conference in Nashville, which Bloomberg labeled as a “MAGA-centric crypto celebration.”
Together with his sons, he has backed a new crypto initiative called World Liberty Financial, and prominent cryptocurrency figure Elon Musk has shown significant support. Since Election Day, Dogecoin, a token often promoted by Musk, has surged by 145 percent. Musk was even appointed to lead the Government Efficiency Division (informally known as Doge).
All of these signs suggest that the forthcoming administration is supportive of cryptocurrencies and intends to regulate them minimally. The current sentiment is robust. “People are thrilled,” said Ilan Solot from brokerage Marex.
This shift in sentiment has led even traditional investors to consider the possibility of investing in cryptocurrencies. “This indicates a global realignment of portfolios,” Solot remarked.
Mr. Cartwright, a pensions consultant based in Farnborough, had even started discussions about the UK’s inaugural pension scheme—a £50 million defined benefit company scheme—before the US elections, advocating for a 3% allocation to Bitcoin within their pension portfolio.
“Pension funds and institutional investors have various asset classes,” explained Sam Roberts, a director at Cartwright. “We’re recommending that Bitcoin become a part of that mix.” An anonymous pension scheme advised by him purchased Bitcoin in October and has since reaped substantial profits.
The broader perspective suggests that a potential Trump administration may consider cryptocurrencies as a strategic necessity rather than merely a speculative venture. Robert F. Kennedy Jr., a former rival and now a possible contender for high office, emphasized at a Nashville conference the importance of bolstering national Bitcoin reserves on a level akin to gold reserves. His speech was compelling and well-researched, according to Richard Byworth of Swiss financial institution Syz Capital. The proposal includes starting with the refusal to sell crypto assets seized by the federal government over the years and potentially growing to acquire hundreds of Bitcoins daily, as proposed by Kennedy. While it’s difficult to digest proposals from someone who opposes vaccines and advocates for the removal of fluoride from water, it’s still an innovative concept.
Byworth believes that part of the recent Bitcoin buying frenzy may be attributed to other countries wanting to get ahead before the US begins to build its crypto assets. Regardless of whether this vision materializes, “they’re accumulating Bitcoin as if it’s on a purchasing card,” he said.
Those looking for a straightforward explanation of Bitcoin’s nature are likely to remain puzzled. Nevertheless, resisting the cryptocurrency revolution seems to be increasingly futile.
katie.martin@ft.com
