Bitcoin soared to an all-time high on Monday, hitting US$19,850 in the morning before again slipping below US$19,500 by the afternoon.
It has nearly doubled in just the past two months. The cryptocurrency has been boosted by a flurry of endorsements from traditional investors, favourable government policies, and expanded access on investment apps, as Barron’s noted this weekend.
Even traditional investors who had long spurned or ignored Bitcoin have begun reconsidering. New buyers tend to view the digital asset as a hedge against currency devaluation at a time when governments have loosened monetary policy to deal with the coronavirus. It doesn’t bother many bulls that Bitcoin remains mostly useless as a currency. Its role as an asset appears to be enough.
Scott Minerd, the global chief investment officer at Guggenheim, appears to be warming to Bitcoin. The Guggenheim Macro Opportunities Fund (ticker: GIOAX), with more than $5 billion in assets under management, said in a regulatory filing that it may invest up to 10% of its net asset value in Grayscale Bitcoin Trust (GBTC), a stock-like security that tracks the price of Bitcoin.
Bernstein analyst Inigo Fraser-Jenkins, co-head of the portfolio strategy team, wrote on Monday: “I have changed my mind about Bitcoin’s role in asset allocation. In January 2018 we declared that it had no such role. But actually, maybe we have to admit it does. What has changed is the policy environment, debt levels and diversification options for investors post the pandemic.”
One reason that analysts are changing their minds about Bitcoin is that it may serve to balance portfolio exposure for some investors. Stocks are trading at high valuations, so it makes sense to hedge exposure to them. But bonds and Treasuries have also rallied, and are trading with such low yields that there’s not much reward for the risk that investors are taking on.
Gold has also risen in recent months and is trading near a 50-year high relative valuation to other commodities, according to Jim Paulsen, the chief investment strategist at the Leuthold Group.
Paulsen recommended on Monday that clients consider Bitcoin as a way to balance their portfolios. He is impressed with how uncorrelated it has been to other assets — both stocks and things like bonds and gold. “The thing is, Bitcoin has risks, but today, so do most of the other balanced portfolio alternatives,” he wrote.
He explained more in a follow-up email to Barron’s.
“I still don’t really understand what drives Bitcoin but I am finally willing to recognize that its short history yields some beneficial attributes which I can’t find elsewhere,” Paulsen wrote. “And, unlike other balance possibilities, I am not looking to ‘buy and hold’ Bitcoin (would need to understand it better to do that), but rather looking to exploit its excessive volume in order to improve the workings of a traditional balanced portfolio in a way which is not possible if utilizing only traditional assets. My point essentially is that I am not really attracted per se to Bitcoin fundamentally, but rather only its ‘interactive’ character (including its unique excessive volatility) with stocks and other traditional assets.”
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Andy Warhol’s portrait of the late Queen Elizabeth II sold for C$1.14 million (US$855,000) at an auction last week, setting a record price for an editioned print by the Pop artist, the Canadian auction house Heffel said.
Warhol created the screenprint in 1985 based on a photograph taken by Peter Grugeon at Windsor Castle in 1975, which was released in 1977 on the occasion of the Queen’s Silver Jubilee, according to Heffel.
Queen Elizabeth II died in September at the age of 96 after a seven-decade reign, making her one of the longest-reigning monarchs in history.
The portrait features the then-reigning Queen wearing the diamond-and-pearl Grand Duchess Vladimir Tiara and a matching necklace, and a blue sash pinned with a medallion with a miniature portrait of her father, George VI, on regal blue background. The outline of the portrait was accentuated by diamond dust, which glimmered in the light.
This print is one of only two editions signed as “HC” for Hors d’Commerce (not for sale) aside from the 30 numbered editions with this colour scheme and diamond dust, according to Heffel.
The consignor acquired the print circa 1996 from Bob Rennie, a prominent Vancouver businessman and collector, according to Heffel, which declined to disclose the identities of the consignor and the buyer.
Offered as a highlight at Heffel’s 85-lot auction of Post-War and contemporary art on Nov. 24 in Toronto, the print realised a price more than double its presale estimate, and was the highest achieved by an editioned print by Warhol, the auction house said.
The previous auction record for an editioned Warhol print was for a piece from the same edition, also in the regal blue colour, sold in September at Sotheby’s for £554,400 (US$662,000), according to Heffel.
The most expensive Warhol work is his portrait of Marilyn Monroe, Shot Sage Blue Marilyn, which was acquired by gallerist Larry Gagosian at a Christie’s auction in May for US$195 million, marking a record price for a work by an American artist at auction.
Sales volumes and median prices on the rise in the N.T