Tag: crypto currencies

Carl Icahn says may get into cryptocurrencies in a ‘big way’, BFSI News, ET BFSI

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Activist investor Carl Icahn is interested in getting into cryptocurrency in a “big way,” and may eventually put more than $1 billion into an alternative currency.

While Icahn hasn’t bought any cryptocurrency yet, the billionaire investor said in a Bloomberg TV interview that he studies Bitcoin, Ethereum and the crypto sector as a whole to determine where the opportunities are. Alternative currencies are gaining popularity as a natural manifestation of inflation in the economy, he added.

Any criticism around cryptocurrency having no underlying value is a “little wrong-headed,” Icahn said.

“Well, what’s the value of a dollar? The only value of the dollar is because you can use it to pay taxes,” he said. “I’m looking at the whole business, and how I might get involved in it.”

Icahn also said he believes people are looking at alternative currencies because parts of the equities market are being traded at “ridiculous prices.” He referred not only to those being driven up as so-called meme stocks, but also certain strategies being offered by money managers.

“I don’t think Reddit and Robinhood and those guys are necessarily bad, I think they do serve a purpose,” Icahn said. “Money is funneling back into companies. Some of these companies might be OK, but a number of them, the risk-reward is absurd.”



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JP Morgan says gold will suffer for years because of bitcoin, BFSI News, ET BFSI

Personal Finance

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By Eddie Spence

The rise of cryptocurrencies in mainstream finance is coming at the expense of gold, says JP Morgan Chase & Co.

Money has poured into Bitcoin funds and out of gold since October, a trend that’s only going to continue in the long run as more institutional investors take a position in cryptocurrencies, according to the bank’s quantitative strategists including Nikolaos Panigirtzoglou.

JP Morgan is one of the few Wall Street banks that’s predicting a major shift in gold and crypto markets as digital currencies become increasingly popular as an asset class. The trend poses a problem for bulls in precious metals markets over the coming years if investors move, even a small slice, of their allocations away from gold and into crypto.

“The adoption of bitcoin by institutional investors has only begun, while for gold its adoption by institutional investors is very advanced,” wrote the JP Morgan strategists.

The Grayscale Bitcoin Trust, a listed security popular with institutions, has seen inflows of almost $2 billion since October, compared with outflows of $7 billion for exchange-traded funds backed by gold, according to JP Morgan.
JP Morgan’s calculations suggest Bitcoin only accounts for 0.18 per cent of family office assets, compared with 3.3 per cent for gold ETFs. Tilting the needle from gold to bitcoin would represent the transfer of billions in cash.

One way to play the theme is buying one unit of Grayscale and selling three units of the SPDR Gold Trust, the bank said.

“If this medium to longer term thesis proves right, the price of gold would suffer from a structural flow headwind over the coming years,” wrote JP Morgan’s strategists.

In the short term though, there’s a good chance that Bitcoin prices have overshot and gold is due for a recovery, the bank said. For Bitcoin, momentum signals have deteriorated, which will likely cause selling by investors that trade on price trends.

Bitcoin has fallen 6 per cent since closing at an all-time high of $19,462.14 last week.



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