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Thursday, October 21, 2021

Bitcoin to $100K+? Don’t rule it out

Bitcoin (BTC-USD) “hodlers” are looking awfully prescient these days.

A rough summer swoon followed by a whipsaw start to the fall is now starting to give way to a cryptocurrency’s moment in the sun. With the introduction of a new exchange-traded fund this week and more lining up at the gate, bitcoin rocket to a new record high near $67,000 on Wednesday suddenly putting levels at (or above) $100,000 into play.

Big investors are moving to cash in on the bitcoin boom with dizzying speed. 

Over the last couple of days, Grayscale Investments and Valkyrie both announced plans to issue ETFs of their own, with the latter coming to market as early as this week, according to a company spokesperson. Meanwhile, bond giant Pimco revealed plans to incrementally boost its investment in crypto, CIO Daniel Ivascyn told CNBC in an interview.

In a twist of irony, the ProShares Bitcoin Strategy ETF (BITO) amassed more assets under management within two days than the gold-based SPDR ETF (GLD) did — a point crypto enthusiasts made with undisguised glee.

Bitcoin hasn’t quite yet achieved safe-haven status (it’s still way too volatile, a point we’ve made before in the Morning Brief) but there’s no denying that the market is sending a powerful signal about the future of digital coins.

And it can be directly traced back to two separate yet related events: China’s heavy-handed crypto crackdown, which put the U.S. on the fast-track to becoming a global center for Bitcoin mining, and Securities and Exchanges Commission Chair Gary Gensler declaring his support in principle for crypto-based ETFs, even as his agency gets criticized for its regulation efforts.

However inadvertently, the self-described lover of romantic comedies may have helped investors big and small embrace their love of digital coins.

“There are three important things about this [bitcoin] ETF narrative-wise,” CoinDesk Managing Director Emily Parker told Yahoo Finance Live.

“It’s a sign of legitimacy. … It is opening up bitcoin exposure to a new class of investors. … It’s a sign of some degree of regulatory friendliness,” Parker added.

According to MoffettNathanson senior equity analyst Lisa Ellis, the market was expecting a “far steeper and more protracted decline in crypto assets” after the spring sell-off. “The fact we’re actually back here above 60,000… is a really positive outlook,” she told Yahoo Finance Live.

To be sure, the sector is still not for the faint of heart or thin in pockets, with UBS pointing out that growth opportunities in digital coins are suited “only for highly risk tolerant and speculative investors.”

Still, it’s hard to deny that the nascent ETF boom is a milestone in bitcoin’s grudging yet growing acceptance. Is $100,000 — or even higher — the next stop?

Don’t rule it out.

By Javier E. David, editor at Yahoo Finance. Follow him at @Teflongeek

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What to watch today

Economy

  • 8:30 a.m. ET: Initial jobless claims, week ended Oct. 16 (297,000 expected, 293,000 during prior week)

  • 8:30 a.m. ET: Continuing claims, week ended Oct. 9 (2.548 million expected, 2.593 million during prior week)

  • 8:30 a.m. ET: Philadelphia Fed Business Outlook, October (25.0 expected, 30.7 in September)

  • 10:00 a.m. ET: Leading Index, September (0.4% expected, 0.9% in August)

  • 10:00 a.m. ET: Existing Home Sales, September (6.09 million expected, 5.88 million in August)

Earnings

Pre-market

  • 6:00 a.m. ET: Danaher (DHR) is expected to report adjusted earnings of $2.16 per share on revenue of $7.03 billion

  • 6:00 a.m. ET: Dow Inc. (DOW) is expected to report adjusted earnings of $2.56. per share on revenue of $14.25 billion

  • 6:00 a.m. ET: Alaska Air Group (ALK) is expected to report adjusted earnings of $1.36 per share on revenue of $1.94 billion

  • 6:30 a.m. ET: Valero Energy (VLO) is expected to report adjusted earnings of 94 cents per share on revenue of $25.13 billion

  • 6:30 a.m. ET: AT&T (T) is expected to report adjusted earnings of 79 cents per share on revenue of $40.48 billion

  • 6:45 a.m. ET: Quest Diagnostics (DGX) is expected to report adjusted earnings of $2.88 per share on revenue of $2.45 billion

  • 6:45 a.m. ET: Southwest Airlines (LUV) is expected to report adjusted losses of 26 cents per share on revenue of $4.64 billion

  • 7:00 a.m. ET: American Air Lines (AAL) is expected to report adjusted losses of $1.03 per share on revenue of $8.94 billion

  • 7:00 a.m. ET: Pool Corp. (POOL) is expected to report adjusted earnings of $3.84 per share on revenue of $1.37 billion

  • 8:00 a.m. ET: Union Pacific (UNP) is expected to report adjusted earnings of $2.48 per share on revenue of $5.39 billion

Post-market

  • 4:00 p.m. ET: Intel (INTC) is expected to report adjusted earnings of $1.11 per share on revenue of $18.36 billion

  • 4:05 p.m. ET: Whirlpool (WHR) is expected to report adjusted earnings of $6.12 per share on r revenue of $386.20 million

  • 4:10 p.m. ET: Chipotle Mexican Grill (CMG) is expected to report adjusted earnings of $6.35 per share on revenue of $1.94 billion

Politics

  • President Joe Biden is headed to Baltimore today for a CNN town hall. Today’s trip comes after a similar journey to Scranton, Penn., Wednesday to push the provisions of both the bipartisan infrastructure deal and the reconciliation package.

  • Treasury Secretary Janet Yellen is presiding over a meeting of the Financial Stability Oversight Council. Two big items on the agenda today are climate change, with a new report expected to be released, and cryptocurrency, with an update on stablecoins planned.

Top News

European markets slump after China’s Evergrande falls 14% [Yahoo Finance UK]

U.S. FDA clears Moderna and J&J boosters, backs ‘mix-and-match’ strategy [Reuters]

Tesla 3Q earnings top estimates after deliveries set record high [Yahoo Finance]

Oil slips from 7-year high with key U.S. storage hub in focus [Bloomberg]

Yahoo Finance Highlights

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