Bitcoin tipped to ‘replace bonds’, ‘meme’ traders face further headwinds
By John Shepard
12:03, 1 March 2021
Bitcoin (BTC) has found support at the $44,000 level after further selling over the weekend. BTC traded at a low near $43,000 as ‘whale’ investors continued to take profits in the coin.
ARK Invest founder, Cathie Wood, has made a bold statement by suggesting that Bitcoin can replace bonds in the financial markets. Her comments are the latest sign that ‘visionary’ companies and investors are seeing the future of blockchain.
Wood said: “You think about the traditional 60/40 stock-bond portfolio, but look what’s happening to bonds right now. If we are ending a 40-year secular decline in interest rates, that asset class has done its thing. What’s next? We think crypto could be the solution”.
Wood’s Ark Invest has been one of the hottest investment funds in the market after their commitment to Tesla (TSLA) stock and other disruptive technologies. The recent activity in BTC will ensure that other corporations are interested in cryptocurrencies and the latest dip may see announcements down the line that investments have been made.
Cardano (ADA) is now the third largest cryptocurrency in the market after the coin continued to climb, while Ripple (XRP) has remained under pressure from an SEC lawsuit. Cardano has also leapfrogged above Tether to a market cap of $40bn.
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SEC halts trading in 15 penny stocks
The US Securities and Exchange Commission (SEC) halted trading in 15 companies on Friday, with the move said to protect investors from a "coordinated attempt" by social platforms to "artificially influence their share prices."
The move affected a band of penny stocks, which usually have low volume. The regulator has acted after the recent GameStop (GME) trading mania, which may be leading to copycat attempts to drive prices beyond the fundamentals.
Price action returned to GME stock last week after opening around $40 and soaring to highs at $180. The price then sold off on Friday to close at $101.74, but it highlights that investors are still prowling. AMC Entertainment (AMC) also saw an almost 100 per cent move on the week but settled for a close of $8.00.
Keith Gill, the trader at the centre of GameStop’s bullish rally has said he doubled his investment in the stock and that helped to boost the price, while there was speculation that Chewy founder Ryan Cohen, who has a large amount of GME stock, would make an announcement soon.
The fact that the SEC is actively clamping down on smaller shares is reason to be cautious on the so-called ‘meme stocks’.
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