“We should have bought Bitcoin, not gold.” That’s what the world’s second-richest person said this week as a cryptocurrency’s market cap surpassed that of the world’s most famous precious metal. It’s a statement that highlights a growing rift in the investing world. On one side, you have investors who believe that gold is the answer to the next recession, and that cryptocurrency has no intrinsic value. On the other side, you have investors like Warren Buffett, who think cryptocurrencies are the future of money. As usual, however, the truth probably lies somewhere in the middle.
“We should have bought Bitcoin, not gold” is an opinion piece by John F. Dicken on all-mints.com, a blog about cryptocurrencies. In the article, Dicken argues that the tech community had a great opportunity to invest in the cryptocurrency Bitcoin in 2012, but instead it was bought gold. Article Intro: In 2012, the tech community had a great opportunity to invest in the cryptocurrency Bitcoin, says John F. Dicken in an opinion piece on all-mints.com. Bitcoin was a relatively unknown currency at the time, but it was trading at less than $10. The currency has since increased in value to over $1,000 and changed the face of global finance forever. Article Intro
US financial institution BNY Mellon, the world’s largest custodian bank and asset manager, said the recent performance of one of its exchange-traded funds, or ETFs, has been significantly affected by the lack of companies investing in bitcoin.
The BNY Mellon Opportunistic Small Cap Fund (DSCVX) went from 1… September 2020 to the 28th. The fund gained 35% in February 2021, which is lower than its benchmark, the Russell 2000 Index, which gained 41.7% in the same period.
According to the US Securities and Exchange Commission, the company regrets not buying shares in business intelligence giant MicroStrategy (MSTR), which invested billions of dollars in bitcoin last year and has since paid back $4.8 billion. The papers say:
The fund’s performance also suffered from the decision not to hold MicroStrategy, whose shares jumped when the company announced it would invest in bitcoin.
The paper also noted that the fund’s position in gold mining operator Alamos Gold has deteriorated as the stock has suffered from the low gold price.
According to ETF.com, 88 ETFs currently have exposure to MicroStrategy, including the sixth-best performing 2021 fund, Amplify Transformational Data Sharing ETF (BLOK) – which has significant exposure to cryptocurrencies and is the largest holder of MSTR by distribution percentage, with 5.20% of its portfolio invested in MicroStrategy.
On average, US ETFs allocate 0.57% of their capital to MicroStrategy.
Since announcing its first bitcoin investment in August 2020, MicroStrategy has amassed $2.2 billion in BTC, with the company’s cryptocurrency rising 120% in value.
During the same period, the price of MSTR has increased by 385% from $135 to $655 at the time of writing. MSTR traded at a record high of over $1,270 in early February.
MSTR/USD as of August 2020: TradingView
The BNY Small-Cap ETF typically invests at least 80% of its assets in small-cap stocks of the Russell 2000 Index. The fund’s largest investments include North American airline SkyWest, Cloudera, a provider of business cloud services, and Acadia, a healthcare provider. About 23% of the investment goes to the industrial sector, 17.5% to healthcare, 15.9% to technology and 14.2% to financial services.
After opening around 27.5% in 2020, DSCVX fell to $16 in March as the global economic impact of the coronavirus became apparent. Since then, the fund has more than doubled in value and is now worth more than $37.
While BNY Mellon complains about the lack of exposure to MSTRs in its Opportunistic Small Cap Fund, it is making significant investments in the crypto sector, leading a $133 million Series C funding round from institutional crypto-castodian Fireblocks last month.
In February, BNY Mellon also announced plans to offer storage services for bitcoin.
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Frequently Asked Questions
Is it smart to buy Bitcoin right now?
For the uninitiated, Bitcoin is the most popular crypto-currency in the world right now, and one of the most exciting. The idea of a decentralized, digital money that is not backed by any government is a very attractive one to many tech-savvy individuals. However, Bitcoin is not without its risks. This article will explore whether it is smart to buy Bitcoin right now, given the current state of the market. If you’ve heard of bitcoin, it’s probably been in the news recently. The price of bitcoin has been soaring, which is raising some eyebrows and drawing new investors. But is it smart to buy bitcoin right now? The answer is yes and no. Investment in cryptocurrency is a risk no matter what the price is, and the fact that the value of bitcoin is rising doesn’t necessarily reflect the strength of the currency. In other words, just because a cryptocurrency like bitcoin is worth more today than it was last month doesn’t mean it will be worth more next month.
Is Bitcoin gold the same as Bitcoin?
Bitcoin is the most well-known cryptocurrency and is considered to be the leader of the pack. It has been around since 2009, and is low-cost, fast and stable. There are a few alternatives to Bitcoin, including Bitcoin Gold and Ethereum, but Bitcoin is the most well-known. There are also more than 1,000 other cryptocurrencies, but none are as well-known as Bitcoin. Back in 2009, when Bitcoin was first invented, it was commonly referred to as an alternative currency. Today, it is a digital currency, which is very different from what it used to be. The main reason why it was called an alternative currency was because it did not exist in physical form, unlike other currencies such as the US dollar and British pound. However, this is no longer the case. There are now physical versions of Bitcoin, such as Bitcoin Gold.
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