Is Gold the Safest Place to Invest During Times of Widespread Market Uncertainty?

As a result, we’ve seen the performance of gold rise to nearly unprecedented levels, but is the precious metal still the place to go for safe-haven investing?

Gold’s reputation as a safe space to store wealth during times of economic downturns remains unscathed as the commodity continues to outperform other markets in the wake of the recent inflation-driven cost of living squeezes being experienced around the world.

As we can see from the value of gold over the past five years, the commodity has continually rallied in the wake of wider market uncertainty. Although it experienced a similar dip that was felt across the market as the extent of the Covid-19 pandemic became fully known, gold’s recovery was so strong that the asset soared to new all-time highs by the summer of 2020.

Although the asset’s momentum has tapered off in the months that have followed, news of Russia’s invasion of Ukraine prompted more investors to take their money out of traditional stocks and fiat currencies and instead align it with the precious metal.

Compared to just five years ago, the price of gold has grown by some 55.11% in spite of a highly volatile stock market in the wake of factors amounting to inflation, the pandemic, and geopolitical tensions.

Does gold’s recent performance indicate that the asset is the safest place for investors to turn to as the stock market continues to reel from widespread uncertainty? Let’s take a deeper look at what to expect from the archetypal safe haven commodity:

Is Gold a Safe Investment During Times of Geopolitical Conflict?

Despite the value of gold climbing to within $30 USD of its all-time high in the immediate aftermath, Warren Buffett has warned against investors looking to sell off their stocks in order to sit on their liquidity or to invest in assets like gold or bitcoin in response to the outbreak of war. Buffett firmly believes that the best way to navigate these times of uncertainty is to invest in businesses to build wealth over time.

The world-renowned investor and Berkshire Hathaway CEO told CNBC that he had no interest in selling his stocks.

“If stocks are cheaper, I’ll be more likely to be buying them,” Buffett explained. “You’re going to invest your money in something over time. The one thing you could be quite sure of is if we went into some very major war, the value of money would go down.

“I mean, that’s happened in virtually every war that I’m aware of,” he added. “So the last thing you’d want to do is hold money during a war.”

Despite Buffett’s confidence that investing in stocks will provide more growth potential over time, the recent rise of inflation rates has negatively impacted stocks and shares around the world.

The subsequent sell-offs for these stocks have presented the market with a fresh problem that wasn’t present during the 2014 invasion of Ukraine. With this in mind, holding wealth in gold may still be a good choice for investors whilst markets continue to suffer from volatility.

Could Bitcoin Challenge Gold’s Dominance?

Bitcoin has long been heralded as ‘digital gold’ due to its functionality as a more agile store of wealth. After all, BTC can be stored in blockchain wallets and sent and received all around the world almost instantly.

Although it’s seen some exceptional growth during its relatively short lifespan, BTC has struggled in the wake of record-breaking inflation rates – owing to mass investor sell-offs prompted by the cost of living squeeze.

Despite bitcoin’s reputation as a safe haven asset, the cryptocurrency’s well-documented volatility has led to more investors choosing to opt-out of holding the asset during market downturns.

Maxim Manturov, head of investment advice at Freedom Finance Europe, has suggested that the future of bitcoin remains bright as adoption opportunities for the asset continue to grow.

“Cryptocurrency is currently one of the most attractive alternatives to investing in stocks, bonds, and commodities. Cryptocurrencies are generally highly volatile, which means investors can generate high returns. Yet, with volatility come greater risks,” Manturov noted.

“You no longer need a crypto wallet in order to trade cryptocurrencies. In 2021, large funds have started rolling out ETFs with direct or indirect links to crypto assets. Some of the largest and most popular Crypto ETFs include ProShares Bitcoin Strategy ETF, Grayscale Bitcoin Trust (GBTC), Amplify Transformational Data Sharing ETF (BLOK) and Grayscale Ethereum Trust (ETHE).”

Today, cryptocurrencies like BTC carry plenty of potential, and their respective ETFs are set to open up unprecedented investing opportunities without the need for investors to immerse themselves into the crypto landscape.

Although this may point to a bright future for bitcoin, gold’s outperformance in 2022 ensures that it remains a relatively safe bet during these jittery times for global markets. Until we see more confidence returning, it’s likely that bullion will remain a tried and tested safe haven asset.

Grayscale CEO Ready To File Lawsuit Against SEC for Bitcoin Spot ETF

Key Insights:

  • Grayscale CEO Michael Sonnenshein stated they’re open to all options to get a spot Bitcoin ETF.
  • He said that the SEC is not doing everything it can for the investors currently.
  • GBTC continues to trade at a heavy discount of 26.22%.

As the broader market hit recovery in the last 24 hours, a lot of attention went back to crypto. But the more significant issue, as highlighted by Grayscale’s CEO Michael Sonnenshein is the lack of clearer investment methods for crypto.

And for the same, he believes the approval of a spot Bitcoin ETF is necessary.

Grayscale Wants Spot Bitcoin ETF

In an interview with Bloomberg, Sonnenshein discussed the ongoing dilemma around the approval of a spot BTC ETF and how the SEC dragging the decision around it is only preparing Grayscale to take any route necessary to make it happen.

Since the announcement in October last year, Grayscale has been doing everything to make sure that the request of converting the Grayscale Bitcoin Trust (GBTC) into an ETF plays in its favor.

But the Securities and Exchange Commission has only been delaying the process. Commenting on the same, Sonnenshein said,

“It’s really important that investors know that we have and will continue to advocate for them but their voice can actually be heard through this process as well. And so the SEC has opened up this comment period for investors to advocate why they want an ETF.”

He believes that it is essential for investors to actively support the ETF since, currently, GBTC has investors across all the 50 states of the USA with more than 800k accounts.

This could not only tip the decision to their corner but also keep the SEC’s primary concern intact. Adding to the same, Sonnenshein said,

“Every single day that it [GBTC] is trading and being bought and sold by investors and is not being folded into the familiarity and the protections of the ETF wrapper we really don’t feel that the SEC is doing everything they can to actually protect investors. “

The next date for this decision is set in July, and upon being asked if Grayscale would go down the path of an APA lawsuit in case of rejection, Sonnenshein stated,

“I think all options are on the table.

GBTC Today

Even if a GBTC ETF is approved, it will need to be alluring enough to actually gather investors, and GBTC’s current state is far from that.

Despite the multiple rallies since last year, GBTC has been slipping consistently and is presently trading at a massive discount of 26.22%.

Grayscale Bitcoin Trust (GBTC) is trading at a 26.22% discount | Source: Ycharts

While Sonnenshein believes that post-conversion into ETF, investors will realize the true potential of GBTC, and those willing to stick around for the long term will be able to reap benefits of the same.

As of today, multiple well-performing ETFs such as the ProShares Bitcoin Strategy ETF (BITO), VanEck Bitcoin ETF (XBTF), and Valkyrie Bitcoin ETF (BTF) already exist. Thus taking on them would be a big challenge for Grayscale when its ETF comes out.

BITO: Rising Tensions in Europe Creates Opportunities for Bitcoin

At launch time, the cryptocurrency was valued at $65K compared to $38.7K today. However, after the dip to the $35K level suffered in the final week of January, things are looking better for BITO, which, it must be mentioned does not invest in bitcoin directly. Still, as seen in the orange chart below, the ETF’s share price is closely correlated to bitcoin‘s, depicted here in purple.

Comparison
Comparison of price performance

My aim with this thesis is to analyze BITO’s performance in the last month when it gained 15.63% compared to the S&P’s negative 2.39% (-2.39%). This period coincided with the Russian aggression against Ukraine and the imposition of economic sanctions by the United States and its allies.

Invasion and economic sanctions benefiting bitcoin

First, the concept of an economic sanction against countries that go against U.S interests whereby their foreign currency reserves are frozen is not something new. Some of these sanctions remind us of the ones imposed on Huawei two years back and which hit the Chinese telecom giant so hard that it lost billions of dollars of sales. Iran has also been previously impacted by sanctions which severely curbed the ability of its banks to trade in foreign currencies.

This time, America and its allies have gone a step further by punishing Russia which happens to be the world’s eleventh-largest economy by nominal Gross Domestic Product and a giant natural gas exporter. Some of the country’s banks have been barred from utilizing the Swift banking network, which severely limits their ability to receive or issue payments worldwide.

Other measures include drastically limiting Russia’s access to European capital markets and crucial technologies including semiconductors, electronic components, and software. Additionally, sanctions that were intended to hit individuals in Mr. Putin’s circle of power like freezing of their assets mostly in European territories have unfortunately reverberated on ordinary citizens as they queued to withdraw foreign currency from local banks.

Moreover, Russia which has about $630 billion of reserves in dollars is being prevented from accessing it. This is a huge amount and means that the idea of the dollar being viewed as a worldwide reserve currency plus a safe store of value is now jeopardized and only applies to countries that abide by U.S. values and interests. This level of currency weaponization is something unprecedented and paves the way for alternative means of transacting or stores of value, with one of them being cryptos.

Also, many are turning to cryptos because of practical benefits.

First, in light of their own currency losing value similarly to ice melting in the sun, crypto represents a safe store of value for Russians and Ukrainians alike. Second, if you are a Ukrainian refugee, it’s easy to transport as people only need to memorize the seed phrase. In comparison, gold and paper-based currencies like dollars or the European euro can be easily stolen by corrupt border guards. Storing bitcoins on an exchange constitutes some risk but is still better than transporting paper or metals.

Furthermore, cryptocurrency donations have poured in to support pro-Ukraine groups with NGOs, and volunteer groups have received 30 million dollars in form of cryptocurrencies since the Russian invasion. Bitcoin donations are also pouring in to support Ukraine’s military because it’s quick and easy, as it bypasses national financial and monetary regulations.

Thus, crypto-assets have emerged as an alternative funding method as they enable cross-border donations that circumvent financial institutions that might otherwise block payments. Also, at this stage, it is hard to see any action by U.S. regulators which may impede the flow of money into Ukraine.

BITO both as investment and trading tool

Increased flow levels led to higher bitcoin demand, but, BITO’s underlying fund does not invest directly in the digital coin as I mentioned above. Instead, as the first U.S. bitcoin-linked ETF, it provides exposure to bitcoin futures contracts. Now, a contract is normally a term used for the commodities market and allows investors to speculate on a product’s future price in order to gain from short-term price movements without holding it. In the case of BITO, it is bitcoin.

As per the fund managers, BITO “also offers investors an opportunity to gain exposure to bitcoin returns in a convenient, liquid and transparent way”.

However, historically speaking, the fund has failed in its objective to provide capital appreciation, at least for those who have held it from inception as illustrated by an initial investment of $10K being worth less than $7K today.

capital appreciation
Growth of $10K invested in BITO (www.proshares.com/our-etfs/strategic/bito)

Still, due to the liquidity factor and the fact that it is volatile, BITO can enable traders to achieve considerable gains. An example is an investment done around October 27 when the share price was around $38 being valued at $43 just two weeks later.

For this matter, BITO’s average daily share volume at 8 million is nearly eight times more than the Valkyrie Bitcoin Strategy ETF (BTF) which was incepted just days after BITO and also holds future contracts. The ProShares ETF has $676 million of assets under management compared to only $33.58 million for its peer. Both ETFs charge fees of 0.95%.

comparing
Comparing BITO and BTF (seekingalpha.com/symbol/BITO/peers/comparison)

Thus, investing in bitcoin futures contracts through BITO allows investors to better profit from short-term price movements regardless of the long-term direction and this is helped by the fact that crypto enjoys international recognition, making it suitable for everyone at anytime and anywhere in the world.

The risks and the long term rationale

However, keeping and paying with bitcoin comes with risks as the value of a currency is largely dependent on people’s trust. The trust level shot up with the events in Ukraine mainly due to erosion in confidence in traditional or fiat currencies caused by uncertainty. However, cryptocurrencies remain largely unregulated, extremely volatile, and not completely immune to hacker attacks due to the fact that they are digital in nature.

Still, relativizing risks, I consider that in view of heightened tensions in Ukraine, high-inflation concerns in Europe due to rising energy costs, and the euro losing ground against the dollar, there are more opportunities for bitcoin which is based on blockchain software residing on a decentralized network of computers around the globe.

Thus, virtually available bitcoin now looks relatively less vulnerable compared to physical currencies sitting in central banks whose dollar assets may not prove useful when most needed, depending on whether their leadership is aligned with the West.

The above factors should gradually contribute to making crypto assets more central to finance and payments.

Therefore, given the possibility of other countries being sucked into the conflict, there could be wider adoption of crypto somewhat similar to El Salvador where there was a decision to adopt bitcoin as legal tender last year. Even if governments do not go that far, some Eastern European leaders may order their central banks to diversify some of their dollar assets into bitcoins as a precautionary measure.

There is another factor that should increase demand for digital assets.

For this purpose, in addition to the crowd funding aspect, whereby the objective is to raise funds from common people for supporting Ukrainians, there are also projects based on Non-Fungible Tokens or NFTs.

Thus, OpenSea, the largest NFT marketplace is hosting a collection of unique artworks by Artists for Peace and collectors can bid for about 60 pieces in Ethereum (ETH-USD) with the proceeds going towards supporting the Ukrainian people. Now, Ethereum is different from bitcoin, but, as the second cryptocurrency by market valuation, its wider usage should give support to the crypto world in general.

Coming back to BITO, for those who have held to their investments, the ETF represents a safe way to remain invested in the cryptocurrency without risk of theft or misappropriation.

Finally, my bullish stance is firstly reinforced by crypto breaking its correlation with (or decoupling from) the tech sector as I had initially pointed out in my article on the Grayscale Ethereum Trust (OTCQX:ETHE) two weeks earlier. Hence, BITO (in blue) is now outperforming the Invesco QQQ Trust (QQQ).

Chart Data by YCharts

Second, according to Zero Hedge, there are reasons to think that the surge in bitcoin’s value and by ricochet BITO’s share price was more the result of investors expecting a surge in demand from Russia than an actual increase. Thus, more crypto demand should sustain the ETF’s upside. Meanwhile, demand for gold as a safe haven asset is up showing that established hedging mechanisms still work.

Taking into consideration these factors I am bullish on BITO for the long term, but do not exclude a surge to $30 by mid-2022, a level last reached at the end of December. This should be also driven by more support from institutions like Citadel, the largest U.S. market maker which is now more favorable to bitcoin.

Finally, at $23.53, BITO is currently available at a slight discount to NAV of $0.03.

Valkyrie’s Bitcoin Mining ETF to be Rolled Out on Nasdaq

With Bitcoin prices picking up pace a new Bitcoin mining backed ETF is set for listing on February 8. As per reports, the Valkyrie Bitcoin Miners ETF received approval for listing on the Nasdaq exchange, according to a Monday filing with the Securities and Exchange Commission (SEC).

Another Bitcoin ETF

Valkyrie Investment filed a post-effective amendment for the Valkyrie Bitcoin Miners ETF on January 26, after which the firm sought immediate acceleration of its effective date. For now, the Bitcoin Miners ETF will begin trading on the Nasdaq on Tuesday under the ticker WGMI. 

According to a January filing with the SEC, the investment vehicle will not offer direct exposure to Bitcoin (BTC), but at least 80% of its net assets will be through securities of companies that ‘derive at least 50% of their revenue or profits’ from BTC mining or providing the hardware or software related to mining. Furthermore, the filing added that Valkyrie would invest up to 20% of the ETF’s net assets in companies holding ‘a significant portion of their net assets’ in Bitcoin.

Reportedly, Nasdaq joined the request in the late hours of Monday since the exchange approved the fund to list. On the same, the Valkyrie CEO Leah Wald was reported as saying that ‘an increased focus and desire to gain exposure to Bitcoin miners from investors’ prompted the company to apply to the SEC to offer the exchange-traded fund. 

Another BTC Bull Run?

Soon after the ProShares Bitcoin Strategy ETF (BITO) in the New York Stock Exchange, Valkyrie became the second asset manager to offer a Bitcoin Futures ETF in US markets in October 2021. At that time the approval of a future BTC ETF gave a decent push to Bitcoin spot prices triggering a BTC bull run. 

After the launch, BITO finished in the top 15 ETF launches of all time after trading $250 million worth of shares in its first 15 minutes, while on the second day it became the fastest ETF ever to hit $1 billion in assets.

Over the last year, various Bitcoin futures ETFs have been approved and the high market interest in the ETFs are indicative of rising institutional interest in the asset. That said, the same also strengthens BTC’s long-term narrative as an investment instrument. 

As for Bitcoin’s spot price, BTC was up over 15.61% in the last week trading at $44,319 at press time. Bitcoin’s renewed uptrend sparked considerable retail interest too as trade volumes noted a decent uptick. Furthermore, on the back of the BTC gains the global crypto market cap was once again above $2 trillion noting, a 6.43% increase over the last day.

The SEC Boots Yet Another Bitcoin ETF, Delays Decision By Two Months

The US Securities and Exchange Commission on Tuesday has yet again postponed its decision to approve or deny a Bitcoin exchange-traded fund (ETF) proposal, this time from asset manager NYDIG.

The regulator said in a notice that the deadline to approve or reject NYDIG spot bitcoin ETF was previously January 15, which has been delayed to March 16.

The commission finds it appropriate to designate a longer period to issue approval or disapproval so that it has adequate time to consider the proposal. If approved, this will be the first spot-based Bitcoin ETF in the US.

NYDIG, Stone Ridge Asset Management’s bitcoin spin-off firm, filed its Bitcoin ETF with the US financial watchdog in February last year, hoping that 2021 will be the year the SEC approves the first such ETF.

SEC and Bitcoin ETF Delays

The Securities and Exchange Commission delaying its decision and ultimately rejecting Bitcoin ETFs isn’t new. Last month, the regulator rejected investment firm Kryptoin’s proposal for a spot Bitcoin ETF, just weeks after disapproving VanEck’s application.

SEC Chair Gary Gensler has quoted investor protection as one of the major concerns behind these delays and rejections.

Alternatively, several Bitcoin futures ETFs that track the value of Bitcoin futures have been approved by the SEC and are up and running. For instance, ProShares Bitcoin Strategy ETF or VanEck Bitcoin Strategy ETF were given the green light recently.

Bitcoin Spot ETF

While the SEC has been more accepting of futures-based Bitcoin ETFs, a Bitcoin spot ETF could be considerably different. They are directly pegged to the market value of Bitcoin itself and a better product for long-term investors.

Such a Bitcoin spot ETF hasn’t been approved in the US so far. The SEC is clear about the need for a crypto regulatory framework in place and a better plan for investor protection, before approving a Bitcoin spot ETF.

ProShares to Launch New Metaverse ETF Tracking Industry Heavyweights Meta, Apple, and Nvidia

ProShares, an investment firm renowned for launching the Bitcoin Futures ETF in the U.S., has now set its sights on the fast-evolving Metaverse universe.

In a December 28 filing with the U.S. Securities and Exchange Commission (SEC), ProShares declared its intention to launch a new metaverse-focused ETF. Dubbed the ‘ProShares Metaverse Theme ETF,’ the product will focus on tracking the Solactive Metaverse Theme Index (SOMETAV).

The index reflects the performance of multiple public companies offering metaverse-related products and services. It features some top-weighted stocks such as Apple, Meta, and Nvidia.

SOMETAV also tracks the performance of companies operating in online gaming, the creative economy, and the manufacture of metaverse-related devices such as V.R. headsets.

The ETF prospectus from ProShares highlights the growing popularity of the metaverse, an online virtual world that has become a key buzzword in recent months.

Big Companies Are Jumping on the Metaverse Train

The rapidly evolving metaverse trend has attracted some big names over the past few months. In October, social media giant Facebook rebranded to Meta, citing its ambition to create a virtual environment offering gaming and NFT trading features.

More recently, several prominent asset managers have decided to capitalize on the booming metaverse sector, which analysts from Reports and Data estimate could hit $872 billion in 2028.  Last month, metaverse appetite hit new heights as two Canadian firms launched two ETF products based on the emerging virtual world on the same day.

Meanwhile, the Roundhill Ball Metaverse has enjoyed tremendous success with the launch of its ETF, drawing in a staggering $916M from investors since June. Proshares now looks set to become the latest entity to join the metaverse sector, assuming financial regulators green light their ETF filing.

Metaverse: The Next Big Tech Platform

Per a recent Bloomberg report, the metaverse industry has reached $2.2 billion in a few months and is estimated to become an $800B industry. Some analysts view the metaverse as the next big tech platform that could propel the crypto industry to new heights.

The metaverse creates an online 3-D virtual environment that merges virtual, augmented, and physical realities into one immersive platform. The emerging world promises to transform virtual social experiences, e-commerce, gaming, NFT trading, and much more.

One expert points to recent developments in the metaverse universe as a sign that the sector is well primed to evolve and grow. Todd Rosenbluth, the director of ETF research at CFRA, told Bloomberg:

“I don’t know if the Metaverse theme has legs, but investors believe in it. Given the success of the ETF META, we are likely to see more products come to market that offer a unique twist on this long-term theme.”

NUGO: Growth Has a New ETF

I came across the Nuveen Growth Opportunities ETF (NYSEARCA:NUGO) while reading a report by ETFGI, an independent research and consulting provider providing insights on the entire global industry of ETFs and ETPs listed globally. Also, out of the top 10 most active funds by net new assets, NUGO, which had been incepted only on September 27, gathered $1.63 billion, representing the largest individual net inflow. It outperformed many well-established names like the SPDR Blackstone/GSO Senior Loan ETF (SRLN) with inflows of only $562.16, coming at second place.

https://static.seekingalpha.com/uploads/2021/12/26/49663886-16405368201872425.png

Source: Table prepared with data from etfgi.com

Interestingly, NUGO also beat the newly incepted ProShares Bitcoin Strategy ETF (BITO) which garnered a lot of media attention lately, and, tellingly, the above figures predate the volatility period engulfing crypto-currencies, signifying that they were benefiting from relatively higher inflows than currently.

The reason for NUGO’s higher inflows

Investigating further as to why NUGO collected as much as 34.5% (1,632/4,731) of the top-ten list of money inflows, the main reason was Nuveen’s parent company, TIAA moving funds from the “$13.7 billion” TIAA-CREF Large-Cap Growth Index fund to NUGO. This strategic re-allocation of assets to NUGO reflects Nuveen’s outlook on areas of opportunity in global equities and is aimed at improving risk-adjusted returns and enhancing retirement outcomes for investors.

Taking a bird’s eye view, EFGI’s report also mentioned that actively managed funds in these two investment vehicles (ETFs and ETPs) brought net inflows of $63.72 billion from the start of the year to November 2021, compared to only $33.06 billion for the same period in 2020. This represents nearly a 100% increase.

Now, these actively managed funds generally carry a higher expense ratio or the fees charged by the fund managers compared to more passively managed funds like for example, the SPDR S&P 500 ETF (SPY). My reason for considering SPY is that it shares some common holdings with NUGO like Microsoft (MSFT), Apple (AAPL), Tesla (TSLA), and Meta Platforms (FB) as shown in the table below with SPY to the right.

https://static.seekingalpha.com/uploads/2021/12/26/49663886-1640536820367116.png

Source: Table prepared from nuveen.com and ssga.com.

Coming to the expense ratio, as an active fund implying more work to rebalance the portfolio, NUGO carries an expense ratio of 0.55% compared to only 0.09% for SPY as a passive ETF. The latter comprises 505 holdings with an AUM of $442.6 billion, a huge amount when compared to NUGO’s total net assets of only $3.3 billion. Also, SPY comes with a 1.22% dividend yield whereas NUGO has not announced any distributions yet.

Looking at NUGO’s performance and risks

Still, for growth-oriented investors who pay relatively less attention to quarterly dividends, two key factors remain performance and risks. For this purpose, I analyzed the three-month performance of SPY and NUGO and found that the latter lived up to “growth” wording in its name by delivering better performance, at 7.76% compared to 7.38% for the SPDR ETF. Now, some may affirm that this 0.38% underperformance is not much given SPY’s much lower fees.

However, as seen by NUGO’s chart in orange below, it delivered intermediary performances of up to 11%-12% on two occasions in November whereas SPY was mostly stuck around the 7% mark. More importantly, this performance has been delivered at a lower degree of volatility with the orange chart not descending below SPY’s green chart during abrupt market fluctuations as was the case in mid-November and the beginning of December.

https://static.seekingalpha.com/uploads/2021/12/26/49663886-16405368204352078.png

Source: tradingview

This is explained by the fact that NUGO charges higher fees and seeks long-term capital appreciation through a concentrated growth portfolio primarily investing in U.S. stocks with market capitalizations of at least $1 billion. The investment team also looks for metrics like attractive earnings growth, strong relative valuation, attractive cash flows, and significant long-term returns.

Furthermore, unlike traditional ETFs NUGO makes use of a “proxy portfolio”, instead of publishing its portfolio holdings on a daily basis. Instead, it discloses the daily holdings of a portfolio transparency substitute (which the fund managers refer to as the “Proxy Portfolio”). This is designed to reflect the economic exposure and risk characteristics of the actual portfolio on any given trading day, allows for the efficient trading of Fund shares, and shields the identity of the Fund’s full daily portfolio holdings.

Conclusion

Looking ahead, the volatility grappling the market is likely to continue in the first quarter of 2022 due to inflationary pressures becoming more evident. To this end, one of NUGO’s constituents, payment processor MasterCard (MA) has taken a hit recently on concerns of rising COVID cases causing a dent in travel and related services. This is due to people tending to swipe their cards more often when changing destinations, thus generating transaction income for MasterCard. Now, the fact that many flights have been canceled on both sides of the Atlantic as Omicron spreads rapidly means less transaction revenue.

Still, I see the exposure to semiconductor names like NVIDIA (NVDA) to be a huge positive for NUGO due to the usage of chips in everything from datacenters, solar panels, electric vehicles, 5G, and crypto mining activities. Along the same lines, that 12% exposure to Microsoft (MSFT), on which most Wall Street analysts are very bullish and forecasting a 10% upside is another positive for the Nuveen ETF which should make it to the $29-30 level by the third quarter of 2022 as inflation fears subside gradually. Finally, I am also bullish because of the massive reallocation of assets being directed towards NUGO from Nuveen’s parent company I evoked earlier.

 

SEC Postponed Decision On Bitcoin ETFs

SEC Is Not Ready To Present Its View On Hard Asset Backed Bitcoin ETFs

Those traders who are waiting for full acceptance of hard asset backed Bitcoin ETFs will have to wait until February 2022.

According to the recent notice from the SEC which was made on December 15, 2021, the commission has decided to delay its decision on whether Grayscale Bitcoin Trust is eligible to be listed and traded under NYSE Arca Rule 8.201-E (Commodity-Based Trust Shares). SEC stated that the decision will be made by February 6, 2022. The decision on Bitwise Bitcoin ETP Trust was postponed until February 1, 2022.

The problem is that no physical-backed Bitcoin ETFs are available as SEC is not comfortable with Bitcoin as an underlying asset. Interestingly, futures-backed products like ProShares Bitcoin Strategy ETF or VanEck Bitcoin Strategy ETF were given the green light.

It will be interesting to see how SEC will defend its decision to not allow hard asset backed ETFs when it allowed futures-backed ETFs, and whether it is ready to change its stance.

Why SEC Decision On Bitcoin ETFs Will Be An Important Catalyst For The Industry

While futures-backed Bitcoin ETFs were clearly a step in the right direction, the potential SEC decision to accept hard asset backed Bitcoin ETFs would be a major mileston for the industry as it will signal that Bitcoin is a normal financial asset, like stocks or commodities.

This decision will widen the pool of potential investors and provide support to the price of Bitcoin. Other leading crypto currencies like Ethereum, Binance Coin, Solana and Cardano will benefit indirectly as investors’ interest in the crypto space should increase after the emergence of first “real” Bitcoin ETFs.

The amount of assets under management in ETFs is constantly growing, and they have become one of the main vehicles for passive investors which traditionally provide key support to markets. If SEC approves hard asset backed Bitcoin ETFs, the crypto industry will gain an additional funding source.

For a look at all of today’s economic events, check out our economic calendar.

Asset Manager Fidelity to Launch Physical Spot Bitcoin ETF in Canada

The United States Securities and Exchange Commission (SEC) has rejected numerous Bitcoin ETF applications in the past. However, that hasn’t stopped asset managers and investment firms from applying again.

More Asset Managers are Entering the Crypto Space

Fidelity, the fourth-largest asset manager in the world with more than $4 trillion in assets under management, has applied to launch a physical spot Bitcoin ETF in Canada. The ETF will track Bitcoin’s spot price, giving investors exposure to the leading cryptocurrency.

According to the Financial Times, the Fidelity Advantage Bitcoin ETF (FBTC) is designed to invest in “physical” spot bitcoin. This latest development comes just a few weeks after the US SEC rejected VanEck’s Bitcoin ETF proposal.

Todd Rosenbluth, head of ETF and mutual fund research at CFRA Research, stated that “It’s significant because the top-tier asset managers tend to be fast followers,” said Todd Rosenbluth, head of ETF and mutual fund research at CFRA Research. “They tend to take more of a wait-and-see approach towards investment trends, piggybacking on developments that have often been created by smaller, more nimble asset managers.”

The US is Still Behind on spot Bitcoin ETF

Fidelity has applied to launch a spot Bitcoin ETF in the United States, but the SEC is yet to approve the application. The US SEC has rejected numerous spot Bitcoin ETF proposals in the past, most recently the VanEck application.

According to the SEC, the cryptocurrency market is not ready for a spot Bitcoin ETF at the moment. The SEC had mentioned on numerous occasions that it still has concerns regarding the cryptocurrency market, especially in terms of price manipulation.

The regulatory agency had approved three Bitcoin futures ETFs. These funds track Bitcoin futures instead of the cryptocurrency’s spot price. The Bitcoin futures ETFs in the United States are; ProShares Bitcoin Strategy ETF (BITO), Valkyrie Bitcoin Strategy ETF (BTF) and VanEck Bitcoin Strategy ETF (XBTF).

Despite its rejection, market analysts and asset managers believe it is a matter of time before the SEC approves a spot Bitcoin ETF.

Greyscale Gets Scaled Down by Bitcoin ETFs

The recent launch of Bitcoin futures ETFs is slowly eroding their prowess as the big cheese of BTC.

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In the same time frame, Purpose Built Bitcoin ETF’s holding has grown as Greyscale continues to shrink. The fact that Greyscale’s premium in relation to their net asset value has also shrunk, currently selling at a 15% discount, is telling when you consider that in the same time span, Bitcoin has gone up in value. For this reason, their assets under management have rebounded back to just under $40 billion in Bitcoin alone.

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Their possible saving grace was their early pivot into Ethereum, and while they still have just $12.5 billion in Ethereum on their balance sheet, a number which has been steadily growing. Greyscale’s Ethereum Trust (ETHE) also follows the price of Ether much better than GBTC does Bitcoin. It won’t be long before Ethereum ETFs challenge this market as well.

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While the CME’s Ethereum futures have had a less than explosive start, I believe that ETFs will ignite a rally in Ethereum and bring Ether to a new all-time high just like Proshares did with Bitcoin. Others are less optimistic, ProShares and digital asset manager VanEck submitted filings with the SEC earlier this year to develop Ethereum-based ETFs, but they later withdrew their proposals. ProShares and VanEck both declined to comment on their decision. According to McClurg of Valkyrie, regulatory clearance before the end of next year is a “long shot” due to little trading volume in Ethereum futures markets. But hopes for first quarter of 2022 are still strong.

U.S. and E.U. regulators continue to hold outdated views of BTC;

While the third-world taking charge in the digital space race

During the recently held “Latin America Bitcoin and Blockchain Conference,” the El Salvadorian President, Nayib Bukele, came on stage looking like a character straight out of “Grand Theft Auto Vice City,” but his ambitions were closer to Alexander the great, according to the self-proclaimed dictator (jokingly) of El Salvador.

“Invest here and make all the money you want,” Bukele said in English, dressed all in white and wearing a reversed baseball cap, in the beach resort of Mizata. “This is a fully ecological city that works and is energized by a volcano.”

His plan is to build the world’s first “Bitcoin City,” funded initially by bitcoin-backed bonds. Half of the VAT levied would be used to fund the bonds issued to build the city, and the other half would pay for services such as garbage collection, Bukele said, estimating the public infrastructure would cost around 300,000 bitcoins.

As previously reported by Reuters, Samson Mow, chief strategy officer of blockchain technology provider Blockstream, told the gathering that the first 10-year issue, known as the “volcano bond,” would be worth $1 billion, backed by bitcoin and carrying a coupon of 6.5%. Half of the sum would go to buying bitcoin on the market, he said. Other bonds would follow.

After a five-year lock-up, El Salvador would start selling some of the bitcoin used to fund the bond to give investors an “additional coupon,” Mow said, positing that the value of the cryptocurrency would continue to rise robustly.

The bond would be issued on the “liquid network,” a bitcoin sidechain network. To facilitate the process, El Salvador’s government is working on a securities law, and the first license to operate an exchange would go to Bitfinex, Mow said.

Crypto exchange Bitfinex was listed as the book runner for the bond on a presentation behind Mow.

©Thegoldforecast.com

 

5 Best Cryptocurrency ETFs to Buy

Introduction to Bitcoin and cryptocurrencies

Bitcoin and cryptocurrencies have gained traction in recent years. What started with Bitcoin has grown to become a $3 trillion industry, with thousands of cryptocurrencies now available to investors all over the world.

Cryptocurrencies have become investment assets available to both retail and institutional investors. The entry of institutional investors into the cryptocurrency space has created the need to launch crypto-focused funds, allowing them to gain direct and indirect exposure to BTC and other cryptocurrencies.

What are ETFs?

An exchange-traded fund (ETF) is a security designed to track a cryptocurrency, an index, sector, commodity or other types of assets. Unlike the regular cryptocurrencies that are traded on crypto exchanges, the crypto ETFs are bought and sold on stock exchanges like regular stocks. An ETF can be designed to track the performance of anything ranging from an individual stock, commodity or asset to a large and diverse collection of securities.

An exchange-traded fund (ETF) is a type of security that tracks an index, sector, commodity, or other assets, but which can be purchased or sold on a stock exchange the same way a regular stock can. An ETF can be structured to track anything from the price of an individual commodity to a large and diverse collection of securities. ETFs can even be structured to track specific investment strategies.

Top five crypto ETFs to buy now

There are numerous ETFs that track the performance of cryptocurrencies. Here are the top five ETFs that give you exposure to cryptocurrencies.

ProShares Bitcoin Strategy ETF (BITO)

This is the first cryptocurrency-focused ETF approved in the United States, and it generated a lot of buzzes. The ProShares Bitcoin Strategy ETF tracks the performance of Bitcoin futures contracts. The funds hold different Bitcoin futures contracts and have grown to have more than $1.4 billion in assets under management barely a month after it was approved by the US SEC. The BITO ETF has a 0.95% annual expense ratio or $95 for every $10,000 invested. Thus, making it one of the best Bitcoin futures ETFs currently available to investors. As Bitcoin’s adoption continues to increase, BITO’s value would increase as more institutional investors seek to gain exposure to BTC.

BITO ETF chart. Source: FXEMPIRE

Valkyrie Bitcoin Strategy ETF (BTF)

The Valkyrie Bitcoin Strategy ETF (BTF) is also a Bitcoin futures ETF that was launched a few days after BITO was approved by the SEC. BTF trades on the NASDAQ stock exchange and, similar to BITO, doesn’t invest directly in Bitcoin. Rather, BTF holds front-month Chicago Mercantile Exchange Bitcoin futures. BTF has nearly $60 million in assets under management with a 0.95% expense ratio. This ETF is set to become even more popular amongst investors as Valkyrie plans to launch more crypto-focused funds over the coming months and years.

BTF ETF chart. Source: FXEMPIRE

VanEck Bitcoin Strategy ETF (XBTF)

The VanEck Bitcoin Strategy ETF gained the SEC’s approval in October but was launched on the CBOE exchange today. It is the third Bitcoin futures ETF available in the United States and is expected to gain adoption due to VanEck’s reputation as one of the leading investment firms in the country. XBTF debuted today on the NASDAQ stock exchange and is trading around the $60 per share mark. It could surge higher over the coming weeks and months as the demand increases.

Purpose Bitcoin ETF (BTCC)

While the US is yet to approve a single spot Bitcoin ETF, its North American neighbor Canada has already approved a few. The Purpose Bitcoin ETF (BTCC) is one of the largest spot Bitcoin ETFs in the world, with more than $1 billion in assets under management. BTCC’s price could rally higher over the coming years as more investors seek ETFs that have direct exposure to Bitcoin, especially as the United States continues to reject the launch of similar funds.

Amplify Transformational Data Sharing ETF (BLOK)

Amplify Transformational Data Sharing ETF (BLOK) is a fund that invests roughly 80% of its total assets in stocks engaged in the development of blockchain technologies. BLOK doesn’t track an index but rather focuses on various value and growth stocks within the cryptocurrency space. Some of BLOK’s top holdings include MicroStrategy, PayPal, Coinbase and Square. This fund has an expense ratio of 0.71%, a one-year return of 195%, and currently has more than $1 billion in assets under management. BLOK’s value could increase from its current $59 per share as the underlying stocks continue to perform due to the cryptocurrency market growing bigger over the coming months and years.

VanEck’s Bitcoin Futures ETF to Start Trading Tomorrow Following Spot ETF Rejection

The VanEck Bitcoin Strategy exchange-traded fund is set to go live tomorrow, a few days after the SEC rejected the firm’s spot Bitcoin ETF proposal.

XBTF to Start Trading Tomorrow

An official notice by the Chicago Board Options Exchange (CBOE) revealed that the VanEck Bitcoin futures ETF would start trading tomorrow, November 16. The CBOE said it is pleased that an ETF will be listed on its platform and will begin trading as a new issue on November 16, 2021.

The VanEck Bitcoin strategy ETF will trade on the CBOE under the ticker symbol XBTF starting tomorrow. The VanEck Bitcoin futures ETF joins the other two already approved by the United States Securities and Exchange Commission (SEC)

The US SEC approved the ProShares Bitcoin Strategy ETF and the Valkyrie Bitcoin Strategy ETF last month, and they are already trading on US stock exchanges. The SEC also approved the VanEck Bitcoin strategy ETF last month, but the investment firm delayed its launch.

This latest development comes a few days after the SEC rejected VanEck’s spot Bitcoin ETF application. The United States regulatory agency has always maintained that it is concerned about possible manipulation in the Bitcoin market, and that would affect investors.

The United States has rejected numerous spot Bitcoin ETF proposals in recent years and could reject the others currently on its table. The rejection comes despite Bitcoin’s market cap now over $1 trillion and Canada and Brazil both having Bitcoin ETFs.

BTC/USD chart. Source: FXEMPIRE

BTC Still Struggling Below $65K

The leading cryptocurrency reached a new all-time high above the $69k last week. However, BTC has been struggling around the $65k region over the past few days. At press time, BTC is trading at $64,189 per coin, down by 0.07% over the past 24 hours.

Despite its recent performance, the short and medium-term outlook for BTC remains positive. Several analysts and market participants expect BTC to reach at least $100k before the end of the year.

US SEC Rejects the VanEck Spot Bitcoin Exchange-Traded Fund

The United States Securities and Exchange Commission has announced that it had rejected the VanEck Bitcoin ETF proposal.

US SEC Rejects Another Spot Bitcoin ETF Proposal

The United States Securities and Exchange Commission (SEC) announced earlier today that it had rejected a bitcoin exchange-traded fund run by VanEck. The ETF sought to track the spot movement of Bitcoin’s price.

This latest development doesn’t come as a surprise as the SEC has made it clear on numerous occasions that it fancies approving a spot Bitcoin ETF at the moment. The regulatory agency has always maintained that it is concerned about possible manipulation in the Bitcoin market, and that would affect investors.

The VanEck Bitcoin ETF proposal was filed by the Cboe BZX Exchange in March. CBOE wanted to list the VanEck Bitcoin ETF and sought to become the first fund that was tracking Bitcoin’s spot price in the United States.

While the US continues to reject Bitcoin ETF proposals, Canada is already leading the way in the market as it has approved a few Bitcoin and Ether ETFs. American institutional investors like Ark Invest are gaining exposure to spot Bitcoin ETFs in Canada.

The rejection comes barely a month after the SEC approved the first futures-based bitcoin ETFs: the ProShares Bitcoin Strategy ETF and the Valkyrie Bitcoin Strategy ETF. The SEC said it prefers to approve ETFs that track Bitcoin futures instead of Bitcoin’s spot price.

BITO and BTF Dip After SEC’s Rejection

The ProShares Bitcoin Strategy ETF (BITO) and Valkyrie Bitcoin Strategy ETF (BTF) have been trading in the red zone since the SEC rejected the VanEck Bitcoin ETF proposal. BITO and BTF are currently the two existing Bitcoin-related ETFs in the United States.

BITO ETF chart. Source: FXEMPIRE

At press time, BTF is down by 1.34% and is trading at $25.32 per share, while BITO is trading at $45.15, down by 1.23% over the past few hours. The ETFs could drop lower by next week as the market adjusts to the SEC rejection news.

Regulators Rebuff VanEck’s Spot Market-Based Bitcoin ETF

The U.S. Securities and Exchange Commission (SEC) has given the thumbs down to a VanEck bitcoin spot market ETF. The fund would have tracked the leading cryptocurrency directly rather than via the futures market. The securities watchdog had until Nov. 14 to make a call.

Even though it was a longshot, bitcoin investors were holding out hope that the SEC would see reason. VanEck’s application has been sitting on the SEC’s desk since the end of last year. It was filed by the CBOE BZX Exchange. Jan van Eck, CEO of the global investment manager, expressed his disappointment on Twitter.

 

Holding Out Hope

The crypto community had reason to hope. The SEC did not stand in the way of the ProShares Bitcoin Strategy ETF (BITO) from making its debut last month. The ProShares version gives investors exposure to the futures market rather than direct exposure to bitcoin. So it seemed fitting that perhaps SEC chairman Gary Gensler and crew might be persuaded to allow investors to gain direct exposure to BTC via an ETF.

Regulators have also tipped their hand to the fact that as long as they would lose sleep over the risk of market manipulation, they would not allow a bitcoin spot-market ETF. The regulatory pendulum has swung in that direction, and investors will have to live to fight another day.

Crypto index funds company Bitwise revealed in recent days that the firm has withdrawn its application with regulators for a bitcoin futures ETF. The firm still has a spot-market bitcoin ETF filing pending.

 

In addition, Grayscale Investments is looking to convert its bitcoin trust into a spot-market ETF. According to reports, the firm is hopeful that regulators will approve its filing by next summer.

Buying the Dip

The bitcoin price is falling in response, having tumbled 4% at last check to approximately $62,700. Bitcoin was knocking on the door of $70,000 just a couple of days ago, and the latest declines are a reminder of just how volatile the crypto market can be.

The bitcoin price might be down but it is not out. Investors are already discussing the opportunity to buy the dip. If the bullish bitcoin price forecasts come true, bitcoin won’t be trading at these levels for long.

 

Bitcoin Bulls Dig in Heels as Google Investment Arm Backs Digital Currency Group

Leading digital asset investment firm Grayscale Investments is a gauge of institutional demand for cryptocurrencies, especially bitcoin. The Grayscale Bitcoin Trust boasts $39.7 billion in assets under management (AUM). Now the parent firm has received a ringing endorsement from some high-profile names in Silicon Valley.

In a rare funding round, Digital Currency Group, Grayscale’s parent company, has attracted some major investors, including a division of tech giant Google, that are betting on the further adoption of bitcoin and other major cryptocurrencies. SoftBank led a $700 million secondary round into DCG with participation from CapitalG, which is the growth fund of  Google parent company Alphabet, as well as Ribbit Capital and others. For its part, Google’s Capital G has $3 billion in AUM.

The massive round values DCG at $10 billion and represents one of the few times that Grayscale’s parent company has raised outside capital. Prior to this round, DCG had raised a total of $25 million in funding.

The firm doesn’t appear to have its sights set on going public, according to DCG CEO Barry Silbert cited by CNBC.  DCG is on track to generate more than $1 billion in revenue in 2021.

Bitcoin Bet

The participation of Google’s CapitalG, among other backers, comes in the midst of bitcoin’s bull cycle in which the flagship cryptocurrency has recently attained a fresh all-time high. Market leaders are convinced that bitcoin has more runway for gains before the year is over.

Bitcoin’s dominance currently hovers at 44% while Ethereum’s is just over 19%. While meme coins in particular have been trading more independently from bitcoin of late, institutions are generally drawn to bitcoin first given its track record and acceptable regulatory status, as evidenced by the recent approval of a BTC futures ETF.

Grayscale Pursues Bitcoin ETF

Now that regulators have allowed a bitcoin futures ETF to trade, Grayscale has its sights set on converting its bitcoin trust to a spot-market ETF. According to Grayscale’s global head of ETFs, David LaValle, cited by Bloomberg, the firm is confident that the SEC will green-light its bitcoin ETF application by July 2022.

Since the ProShares Bitcoin Strategy ETF (BITO) launched in October, the bitcoin price set a fresh all-time high of close to $67,000. It has since pulled back from that level but remains above the psychologically sensitive $60,000 threshold.

The bitcoin Fear & Greed Index is flashing “greed” with a reading of 74 as investors expect wide-scale adoption to boost prices further.

Leveraged Bitcoin ETFs? SEC To Deny Valkyrie’s Proposal

The United States SEC has approved two Bitcoin futures ETFs in recent weeks, but it is not open to approving leverage Bitcoin ETFs.

US SEC To Dismiss Valkyrie’s Leverage Bitcoin ETF Proposal

The United States Securities and Exchange Commission (SEC) is reportedly not in favor of approving leveraged bitcoin exchange-traded funds (ETF). This latest development comes after the regulatory agency approved two Bitcoin futures ETFs a week ago.

According to the Wall Street Journal, the regulator had asked at least one asset manager not to proceed with plans for a leveraged bitcoin exchange-traded fund. The media outlet cited sources close to the matter.

Per the report, the SEC said it would only approve BTC-related products that provide exposure to futures contracts. The SEC is only interested in approving Bitcoin  ETFs similar to the ones it approved last week.

Investment firm Valkyrie has submitted a proposal to the US SEC seeking to launch a leveraged Bitcoin ETF. Valkyrie wants to offer a 1.25x leveraged bitcoin futures ETF. However, the SEC doesn’t want an ETF that is comprised of borrowed funds.

The regulatory agency approved two Bitcoin futures ETFs last week. The ProShares and Valkyrie Bitcoin futures ETFs started trading on the NYSE Arca and NASDAQ exchanges, respectively, last week. However, the broader crypto market is still expecting the regulator to approve an ETF that tracks Bitcoin’s spot price.

The SEC has been hesitant to approve a Bitcoin spot ETF due to concerns of price manipulation within the crypto space.

Bitcoin Climbs Above The $60k Level Again

Bitcoin reached a new all-time high above $67k last week. However, the leading cryptocurrency has lost some of its value since then. It dropped below the $60k level yesterday as the broader cryptocurrency market encountered a correction.

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BTC/USD chart. Source: FXEMPIRE

However, BTC has started to recover some of its value. BTC is currently up by 3.4% and is trading above the $61k mark at the time of writing this report.

Investment Firm ProShares Launches Three New ETFs

ProShares, one of the leading investment firms in the United States, has launched three new exchange-traded funds (ETFs) in an attempt to expand its product base.

ProShares Introduces Three New ETFs

ProShares, a premier provider of ETFs, announced earlier today that it had launched three new ETFs. The exchange-traded funds, dubbed ProShares On-Demand ETF (OND), ProShares Smart Materials ETF (TINT), and ProShares Nanotechnology ETF (TINY), add to the company’s rising number of investment products.

So far this year, ProShares has launched six thematic ETFs, taking its total to 12 at the moment. In a press release earlier today, ProShares CEO Michael L. Sapir said the latest ProShares Thematic ETFs provide their investors with new and effective ways to gain exposure to companies that are changing the world through innovation.

The launch of these ETFs comes a month after the investment firm launched three other ETFs, ProShares S&P Kensho Cleantech ETF (CTEX), ProShares S&P Kensho Smart Factories ETF (MAKX) and ProShares Big Data Refiners ETF (DAT).

ProShares’ Bitcoin Futures ETF Is Currently Underperforming

ProShares became the first investment firm to launch a Bitcoin futures ETF last week. The Bitcoin ETF (BITO) recorded more than $1 billion in transaction volume in its opening two days, indicating a huge demand for the cryptocurrency-focused exchange-traded fund.

bito
BITO chart. Source: FXEMPIRE

Due to the huge demand for the ProShares Bitcoin ETF (BITO), the trading limit available for the futures on the CME exchange will be breached before the end of the month. As a result, investors would not have access to the futures until next month.

Despite its excellent debut, the shares of the BITO ETF are currently down by 5.52% since the market opened a few hours ago. BITO is currently trading at $37.85 per share. The decline in the ETF’s value could be tied to Bitcoin’s underperformance in the market over the past 24 hours. BTC‘s price has dropped below the $60k level for the first time in days. The dip below $60k comes just a week after Bitcoin reached a new all-time high price above $67,000.

Gold Retraces Modestly as Dollar Strength Dampens any Daily Gains

As of 4:45 PM EDT gold futures basis most active December 2021 contract is down two dollars, or -0.11% and is fixed at $1782.10. Concurrently spot or Forex gold is currently jumping between fractional losses and fractional gains. Currently spot gold is fixed at $1,782.55 approximately +0.05% or one dollar on the day.

gold oct 21

Considering that the dollar is currently up just over ¼% it is clear that any decline today can be directly attributed to a stronger dollar. Currently the dollar index is up 25 points, or +0.27%, and fixed at 93.785.

Looking at a daily candlestick chart we can see that gold is currently above its opening price. Gold opened trading at $1782.50 and traded to a high of $1790.40 and a low of $1776.80. That means when compared to yesterday’s trading range gold has had a higher high and a higher low, although it closed just below Wednesday’s closing price.

Gold did not have much competition from either U.S. stocks or cryptocurrencies. In the case of the cryptocurrencies, after hitting an all-time high yesterday Bitcoin futures declined by almost 6% ($3,980) and are fixed at $62,685.

After launching the first Bitcoin futures ETF yesterday, ProShares Bitcoin strategy (BITO) declined by 5.61% with the ETF currently priced at $40.64 per share.

U.S. equities were mixed with both the NASDAQ Composite and Standard & Poor’s yielding moderate gains today. The NASDAQ gained +0.62%, and after factoring in today’s gain of 94.0217 is currently fixed at 15,215.70. The Standard & Poor’s 500 gained 13.59 points, or +0.30%, and is currently fixed at 4549.78. The Dow Jones Industrial Average closed, in essence, unchanged with a decline of -0.02%, or a loss of 6.26 points, and is fixed at 35,603.08.

According to Reuters News, today’s fractional decline in gold prices was a result of choppy trading as the precious metal continues to be pressured by rising yields on U.S. bonds. However, gold prices were supported by reports about China that indicated that they are also experiencing upticks and inflation and an extremely troubled real estate(housing) market.

Reuters also spoke to Phillip Streible, Chief Market Strategist at Blue Line Futures in Chicago who said, “The Fed is going to taper and yields are going to make an all-time high so there is no reason for people to park their money in a nonyielding safety asset like gold.”

They also spoke about the double-edged sword that is inflation, Federal Reserve actions as inflation rises (a bullish component for gold prices) reduce stimulus coupled with higher interest rates which will reflect higher yields on U.S. government debt instruments will raise the opportunity cost of holding nonyielding bullion (a bearish component for gold prices).

It seems for the moment until the Federal Reserve convenes for its next FOMC meeting on November 2, gold will continue to trade in a range-bound manner reflecting the dynamic crosscurrents. Dollar strength and higher yields in U.S. debt will continue to pressure gold lower, and inflationary concerns will continue to be supportive of gold prices.

For those who would like more information, simply use this link.

Wishing you, as always, good trading and good health,

Gary Wagner

 

Bitcoin Hits A New All-Time High Above $67k, Eyes The $70k Level Next

The world’s leading cryptocurrency has reached a new all-time high for the first time in months and could be gearing up to surge higher over the coming days.

Bitcoin Finally Sets A New All-Time High Above $67k

Bitcoin has had an extraordinary performance since the start of the month. The leading cryptocurrency has seen its price rise by more than 30% over the past three weeks. Yesterday, the leading cryptocurrency reached another milestone after setting a new all-time high above $67k.

According to the data obtained from Coingecko, Bitcoin reached a new all-time high at $67,276.79. This new achievement came as BTC’s price rose by more than 7% yesterday. It is the first time Bitcoin is reaching a new all-time high level since April 2021.

Following the rally, Bitcoin’s market cap surged to nearly $1.4 trillion. Bitcoin’s price has slightly retreated, and it is now trading around $66k per coin. With a market cap of $1.2 trillion, Bitcoin has a market dominance level of 44.5%.

btc
BTC/USD chart. Source: FXEMPIRE

BTC wasn’t the only coin that has been rallying since yesterday. Ether crossed the $4,300 level and is heading towards a new all-time high if it can maintain its current momentum. Thanks to the performance of other cryptocurrencies, the total cryptocurrency market cap is now approaching $2.8 trillion

Bitcoin Eyes The $70k Level

Following its latest rally, BTC could be looking to surge higher in the coming hours and days. If Bitcoin can build on its current momentum, then it could touch the $70k level over the next few days.

The ProShares Bitcoin futures ETF coming to the market helped boost Bitcoin’s performance. The VanEck Bitcoin futures ETF is coming in the next few days, and that could provide a further boost for Bitcoin in the short term.

Many market experts and analysts expect Bitcoin’s price to reach the $100k level before the end of the year. BTC’s price would need to rise by more than 40% from its current price to attain that level.

MicroStrategy Shares Rise as Bitcoin Bet Pays Off

Enterprise software company MicroStrategy was a first-mover to adopt bitcoin on its balance sheet. The company made the move over a year ago, and it has paid off in spades as its bitcoin investment has ballooned in size.

Now that the bitcoin price has attained a fresh all-time high of more than $65,000, MicroStrategy’s stock is rallying too. Shares of MicroStrategy increased 4.2% on Wednesday to $758. So far this year, the stock has nearly doubled. And over the past 12-month period, the stock has climbed more than 300%. In the same period, the bitcoin price has soared over 400%.

MicroStrategy’s stock reclaimed some lost ground after falling on Tuesday, the day that the ProShares bitcoin futures ETF started trading. MicroStrategy is considered another way for investors to play the cryptocurrency market, especially if they don’t want to take the plunge into bitcoin just yet.

Bitcoin Portfolio

MicroStrategy owns more than 114,000 bitcoins on its balance sheet. The value of the investment has about doubled in size from approximately $3 billion to over $6 billion. And according to MicroStrategy CEO Michael Saylor, the company is holding tight.

MicroStrategy is not the only company with bitcoin on its balance sheet. A year ago, Jack Dorsey’s payments company Square followed suit. After pouring more than $200 million into bitcoin in total, Square’s holdings are valued at $530 million, reports indicate.

Now Square is exploring the launch of a bitcoin mining operation, which is the process by which new coins are created and the network is secured. A recent tweet by Dorsey of the number “705742” has the cryptocurrency community convinced that it is bitcoin related, though the Square and Twitter CEO is keeping his cards close to the vest.

More Potential Gains Ahead

Both MicroStrategy and Square could potentially ride the crypto wave higher next week when a second bitcoin futures ETF is expected to make its debut. The VanEck Bitcoin Strategy ETF, which will trade under the ticker symbol XBTF, has received the regulatory clearance to begin trading in the coming days.

 

The investment management firm is also waiting on pins and needles for the U.S. SEC’s verdict on a VanEck “physical bitcoin” ETF, a decision that according to director Gabor Gurbacs is expected in November.