By Barbara Kollmeyer
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 /zigman2/quotes/210599714/realtime SPX +2.38% 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 /zigman2/quotes/31322028/realtime BTCUSD +0.35% 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:
Stock futures /zigman2/quotes/210407078/delayed YM00 -0.43% /zigman2/quotes/209948968/delayed ES00 -0.48% /zigman2/quotes/210219788/delayed NQ00 -0.42% are holding gains after a batch of data, while European equities /zigman2/quotes/210599654/delayed XX:SXXP +1.84% are mostly higher , and Asian markets had a mostly positive day. Oil prices /zigman2/quotes/209723049/delayed CL00 -1.37% are higher and the pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.4022% is rising on post-Brexit deal hopes and ahead of the outcome of a Bank of England policy meeting.