What happens: A majority of legislators have approved a proposal by Salvadoran President Nayib Bukele that allows Bitcoin to be used as legal tender in the country alongside the US dollar. The law states that “all economic actors will accept Bitcoin as a means of payment when offered by the buyer of a good or service.”
It’s a bold move that will likely be cheered by Bitcoin fans. But it might not help stabilize prices as some strategists warned that the digital coin could fall towards $ 20,000, where it was trading in December 2020.
Remember: after the notoriously volatile Bitcoin hit nearly $ 65,000 per coin in April, it crashed and was last trading above $ 34,000. Analysts fear breaking the psychologically important $ 30,000 mark could fuel the sell-off.
It trades at just $ 31,025 this week after U.S. investigators recovered millions in crypto paid in ransom to hackers who shut down the Colonial Pipeline last month.
Jeffrey Halley, a senior market analyst at Oanda, has warned customers that Bitcoin could hit $ 22,000 in the coming days if sales continue, while Rich Ross, a technical analyst at Evercore ISI, believes that $ 20,000 on the If the digital currency exceeds $ 29,000.
Wild swings in the price of Bitcoin are giving some institutional investors – an increasingly important force in the market – cold feet.
UK wealth manager Ruffer has given up its Bitcoin position over fears over the recent speculative frenzy. After taking a position of roughly $ 600 million in November when Bitcoin was trading near $ 15,000, the company began selling its stake in 2021 and made a profit of $ 1.1 billion. Dollar. Ruffer completed his exit in early April when Bitcoin was trading at $ 55,000.
That doesn’t mean everyone has gone bearish. Analytics firm MicroStrategy announced this week that it is selling $ 500 million in junk bonds to buy additional bitcoins. And Michael Sonnenshein, the CEO of Grayscale Investments, told me in a recent interview that his clients weren’t put off by the drop in crypto prices.
“When investors find periods when prices collapse or retreat, they will opportunistically use those setbacks … to build positions,” said Sonnenshein.
He expects pension funds, insurance companies and other professional investors to continue exploring Bitcoin as an asset class.
“I think institutional acceptance continues to grow exponentially,” said Sonnenshein.
A new class of meme stocks is emerging
The latest: Chatter on Reddit’s popular WallStreetBets forum is driving Wendy’s and Clover Health stocks soar.
Clover Health was up 86% on Tuesday and is up another 22% in pre-trading. The healthcare company went public in January by merging with a special purpose acquisition company (SPAC) founded by popular venture capitalist Chamath Palihapitiya.
The startup is now at the top of Vanda Research’s rankings, which tracks retail investments. Wendy’s holds 4th place.
Lordstown Motors stocks are down 63% from a recent high in February – a reminder that business fundamentals can still ultimately catch up with online fan favorites.
Corporate America does not keep its promise of diversity
The level of diversity on America’s largest corporate boards has never been higher. But it is still a long way from being on par with US society, reports my CNN business colleague Jeanne Sahadi.
Since 2010, the number of companies with more than 40% diversity (including women) has almost quadrupled.
Still, the average growth rate of minority representation on Fortune 500 boards has remained unchanged since 2004 – at less than 0.5% per year.
“The advances in overall diversity are largely due to the increase in white women on boards,” the study found.
Note this area: The board member “recycling rate” – that is, one person serving on multiple board members – has decreased for all groups. But in 2020, more than a third of the various board seats were still occupied by people who served on multiple Fortune 500 boards.
Coming tomorrow: the latest meeting of the European Central Bank takes place as policy makers watch closely to see if the economic recovery sparks unhealthy inflation.