Bloomberg Wealth: There comes a point in nearly every financial conversation these days when someone drops the “B” word.
Bitcoin, that is.
Maybe it’s pandemic boredom. Maybe it’s the fact that every billionaire out there wants us to know whether they hate it or love it. In any case, the cryptocurrency has been on — hmm, let’s say an… interesting… ride — over the past few weeks. So I thought I’d write you a primer on the latest. That way you’ll be ready with some (new) talking points the next time one of your friends brings up Bitcoin.
What to say about its price: Bitcoin is up, generally. It was flirting with roughly $55,000 when this email hit your inbox. And it has risen about 600% in the past year. But there’s been some turbulence of late. The price blasted past $58,000 in February, then plummeted late in the month after Elon Musk hinted that prices might be excessive. Here’s a nice quote to recite to your friends if you want to say something forward-looking:
“It wouldn’t shock to see the price make an assault on the February high of $58,350.” That’s what Chris Weston, head of research at Pepperstone Group Ltd., recently wrote in a note.
And if you want to tell people how to buy it, I wrote about that here.
How to explain its recent rise: Remember these two points:
- The U.S. stimulus may partly be to blame. Now that $1,400 checks are slated to start hitting millions of Americans’ bank accounts, there is growing talk that there will be more flows into financial markets, which could boost Bitcoin.
- But so is growing mainstream acceptance in the corporate world. China’s Meitu Inc., which makes an app that will make you look prettier on the internet, said Sunday that it had bought 379.1 Bitcoins for $17.9 million. Meanwhile Goldman Sachs Group Inc. has said it’s seeing serious demand from institutions as it tries restarting its cryptocurrency trading desk.
A guide to name dropping: Billionaires are just like us! They love weighing in on Bitcoin. You can bring up one (or more!) of the below:
Michael Novogratz: Thinks Bitcoin will probably hit $100,000 before the end of the year
Mark Cuban: His Mavericks team will begin accepting Dogecoin, a “meme” cryptocurrency that started out as a joke
Elon Musk: Recently Tweeted that Bitcoin prices “seem high.”
Bill Gates: Says that unless you’re the world’s richest person, you shouldn’t be buying Bitcoin
Dan Loeb: Has some deep thoughts on the sorts of people who are open to crypto.
How to sound intellectual and maybe even artsy/avant-garde: One of the kookier cryptocurrency trends of late has been the explosion of NFTs (non fungible tokens). People are spending millions. Lindsay Lohan (yes, of “Mean Girls” fame) is involved. NFTs are complicated and I’m not going to try to explain them here, but if you want to start a debate asking “what is art, even?” click here
