A positive day for stocks is building after the Federal Reserve pledged to keep policy accommodative until the economy is on its feet. And investors remain hopeful that U.S. lawmakers will get a stimulus deal done.
To be sure, equities have had a pretty decent 2020, considering the misery brought on by the COVID-19 pandemic. But the S&P 500’s
year-to-date gain of 14% has nothing on how one group of alternative assets have been faring.
Up over 200% this year, cryptocurrency superstar bitcoin
sailed to a new record of $22,000, tapping above $23,000 at one point early on Thursday, a day after reaching above $20,000. And we’ve got a couple of fresh calls on the cryptocurrency that indicate it may have much, much further to go.
Try $400,000, says Scott Minerd, chief investment officer of investment bank Guggenheim Partners, who made that prediction to Bloomberg News late on Wednesday.
Minerd said his bank started allocating toward bitcoin when it was at $10,000, and while that becomes challenging as the price is now closer to $20,000, “our fundamental work shows that bitcoin should be worth about $400,000.”
The leap from here to $400,000 is based on “scarcity and relative valuation to such as things like gold as a percentage of GDP [gross domestic product]. Bitcoin actually has a lot of the attributes of gold and at the same time has an unusual value in terms of transactions,” said Minerd.
Wall Street wasn’t exactly hot for bitcoin in the early days, but interest from institutional investors has been growing as they look for ways to shield from the threat of future inflation. Larry Fink, the founder and chief executive officer of the world’s largest asset manager BlackRock, said earlier this month that bitcoin could possibly turn into a global market asset.
Another big bull on bitcoin, Goldman Sachs alumnus Raoul Pal, tweeted early on Thursday that he sees bitcoin 10 times higher a year from now. His December 2021 target is $250,000, Pal said in an emailed comment.
However, not everyone agrees with the Bitcoin bulls:
are holding gains after a batch of data, while European equities
are mostly higher, and Asian markets had a mostly positive day. Oil prices
are higher and the pound
is rising on post-Brexit deal hopes and ahead of the outcome of a Bank of England policy meeting.
Extra doses in vials of the COVID-19 vaccine from drug company Pfizer
and its partner BioNTech
could boost the U.S. supply by 40%. The Food and Drug Administration approved the use of leftover vaccines, which were being reported by pharmacists. The first case of an allergic reaction to the vaccine has been reported by an Alaska health worker.
French President Emmanuel Macron has tested positive for COVID-19, tossing several other European leaders into quarantine after they came in contact with him. A Hong Kong police dog is also now in quarantine after contracting coronavirus.
“We’re still talking and I think we’re gonna get there.” That was Senate Majority Leader Mitch McConnell on Wednesday afternoon, after leading lawmakers failed to reach a deal. Talks will roll on for Thursday.
Some parts of the U.S. Northeast are bracing for 2 feet of snow on Thursday.
A beloved “Lord of the Rings” actor has now been vaccinated against COVID-19.
Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.
Want more for the day ahead? Sign up for The Barron’s Daily, a morning briefing for investors, including exclusive commentary from Barron’s and MarketWatch writers.