S&P 500 closes at record high in best week since February as investors brush off inflation concerns

Traders work on the floor of the New York Stock Exchange (NYSE)
Traders work on the floor of the New York Stock Exchange (NYSE)

US stocks closed higher on Friday with the S&P 500 notching a record high. The benchmark index’s enjoyed its largest weekly gain since February.

Stocks pushed higher after the latest batch of economic data showed an unexpected stagnation in personal spending last month and inflation ticking higher but less than expected.

Core PCE inflation, which strips out volatile food and energy prices, jumped 0.5% in May, coming in below the median estimate of 0.6%. The gauge gained 3.4% year-over-year. The Federal Reserve uses the core measure as its primary gauge of inflation and has indicated will let inflation run above 2% for some time to facilitate a stronger labor-market recovery.

Here’s where US indexes stood at the 4 p.m. ET close on Friday:

Chris Zaccarelli, Independent Advisor Alliance chief investment officer, said the inflation data will likely not impact the Federal Reserve’s current plans for tapering and rate hikes. The most recent Fed official speeches suggest the central bank could begin a tapering plan in the next 6-12 months and raise rates as soon as 18 months from now, he said.

“Despite the change in direction of Fed policy, the current state of near-zero interest rates and $120/billion per month in asset purchases has created extremely loose financial conditions, which in conjunction with the vaccines and re-opening process, is what has allowed the stock market to hit all-time highs,” Zaccarelli added.

Bank stocks ended higher with Wells Fargo and Bank of America each up over 2% after the Federal Reserve said lenders had passed stress tests and could resume stock buybacks and dividend payments.

Nike soared as much as 15% after crushing earnings, while Virgin Galactic gained as much as 22% after gaining FAA approval to fly customers to space.

Bitcoin hovered around $32,000. Guggenheim’s Scott Minerd said the cryptocurrency could grind lower to around $15,000 before bottoming. He said investors shouldn’t rush in now.

West Texas Intermediate crude was up 0.9% to $73.97 per barrel. Brent crude, oil’s international benchmark, gained 0.8%, to $76.21 per barrel, at intraday highs.

Gold climbed 0.10% to $1778.50 per ounce.

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Riot Blockchain, Coinbase, and other cryptocurrency stocks gain as bitcoin nears $40,000

Bitcoin 2021
Bitcoin 2021

  • Stocks tied to the cryptocurrency space jumped in early morning trading Monday as bitcoin rallied near $40,000.
  • Bitcoin rallied to its highest point in over two weeks after Elon Musk tweeted Tesla would accept payment in crypto once mining uses cleaner energy.
  • Mining stocks Riot Blockchain, Marathon Digital Holdings, and Bit Digital jumped.
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Stocks tied to the cryptocurrency space jumped in early morning trading Monday as bitcoin rallied near $40,000.

Mining stocks Riot Blockchain and Marathon Digital Holdings climbed 8.19% and 7.7%, respectively. Meanwhile, cryptocurrency exchange Coinbase was up 2.8%.

Cryptocurrency stocks often move in tandem with bitcoin’s price. Bitcoin hit $39,746 on Monday – the highest point in over two weeks – after Elon Musk tweeted Tesla would accept the cryptocurrency as payment again once the energy used for mining shifts to more sustainable sources.

“When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions,” the electric-vehicle maker CEO said in a tweet.

Bitcoin was trading 9.44% higher around $39,310 on Monday as of 8:30 a.m. ET.

Other crypto-focused names were trading higher Monday, with blockchain technology company Ebang holdings up 4.12% and mining company Bit Digital up 5.43%.

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Gold prices are at a 3-month high relative to bitcoin as the Fed continues monetary-stimulus efforts

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  • Spot gold rose to $1,853.12 an ounce on Monday, the highest point since February 10.
  • Gold’s price relative to bitcoin is now at a three-month high as the cryptocurrency sells off.
  • Investors are flocking to gold amid fears of rising inflation and a weakening dollar from the Fed’s stimulus efforts.
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Gold prices rose to a three-month high Monday morning as investors have flocked to the safe-haven asset amid continued Federal Reserve stimulus that’s weakened the dollar.

Spot gold rose 0.5% to $1,853.12 an ounce on Monday, reaching the highest point since February 10, according to Bloomberg. The price movement came as bitcoin sank to nearly $42,000 after Elon Musk suggested Tesla may sell its holdings.

The ratio of gold’s price relative to bitcoin is up to the highest point since early February. One Bitcoin is now equivalent to about 23 ounces of gold bullion, down from a record of 36 ounces in April, according to Bloomberg data.

It’s likely that many investors may be buying gold as an alternative to a weakening dollar. The Federal Reserve has promised to keep interest rates near zero for the foreseeable future, which could weaken the US currency and strengthen the case for gold.

Gold has also been historically viewed as a hedge against inflation, and Wall Street has grown increasingly concerned that inflation will overheat as the US emerges out of the pandemic.

Cryptocurrency bulls argue that bitcoin’s fixed supply makes it an even better hedge against inflation than Gold, but recent price movements in both assets question this narrative.

Last week, when key inflation data came in significantly higher than expected, bitcoin fell 7% in one day, moving in the exact opposite direction as one would expect an inflation hedge to move. Bitcoin experts say they’re not concerned about day-to-day movements in the historically volatile cryptocurrency’s price.

Read more: UBS says to buy these 42 ‘new momentum’ stocks that are poised to outperform in a rising inflation environment

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A Canadian bitcoin ETF has attracted $823 million in just 3 weeks since launching as crypto demand remains strong

bitcoin

A Canadian bitcoin exchange-traded fund that has only been trading publicly for three weeks has amassed $832 million ($1 billion Canadian dollars) in assets under management.

The 3iQ CoinShares bitcoin ETF launched on April 19 and is the fastest bitcoin ETF in Canada to reach 1 billion Canadian dollars in AUM, according to a press release. The fund trades on the Toronto Stock Exchange under the ticket “BTCQ.”

The rapidly growing ETF demonstrates that investor demand for bitcoin isn’t slowing down, despite other cryptocurrencies like ether and Dogecoin gaining recent attention. Despite pulling back from it’s all-time-high above $64,000, Bitcoin is still up 97% year-to-date, hovering at $58,000 as of Friday afternoon.

“Reaching $1 billion[CAD] in only three weeks speaks to the enormous market demand for bitcoin,” said Fred Pye, Chairman & CEO of 3iQ. “The pace of its growth is yet another milestone in 3iQ’s goal to provide investors with more ways to gain exposure to the largest digital asset in the world.”

The 3iQ CoinShares fund isn’t the only bitcoin ETF that’s seen a stellar first few weeks of trading. The Purpose Bitcoin ETF hit $1 billion in assets under management one month after it started trading earlier this year.

The success of Canadian funds and the swelling market capitalization of bitcoin above $1 trillion has investors wondering if the US SEC will finally approve a fund in the states. The US regulator is currently reviewing applications for at least nine bitcoin ETFs, though a decision to green light a launch may have to wait until at least mid-June.

The 3iQ CoinShares Bitcoin ETF gained 3.7% Friday.

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Grayscale confirms it will convert its popular bitcoin trust into a ETF

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Bitcoin’s meteoric rise has boosted crypto hedge funds

  • Grayscale confirmed its intent to convert its flagship bitcoin trust into an ETF.
  • In a blog post Grayscale said it always intended for the trust to become an ETF when permissible.
  • The announcement should relieve recent selling pressure GBTC shares, Fundstrat said.
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Grayscale Investments said in a blog post Monday it’s “100% committed” to converting its flagship Grayscale Bitcoin Trust into an exchange traded fund.

The world’s largest digital asset manager confirmed its intent to re-apply with the US SEC to offer an ETF after previous failed attempts to win approval.

“First and foremost we wish to make clear: we are 100% committed to converting GBTC into an ETF,” Grayscale said.

The Grayscale Bitcoin Trust was launched in 2013 and has been the go-to option for investors who want to add bitcoin exposure to their portfolio without directly buying the digital asset.

In the blog post, the investment company said that it always intended for its fund to become an exchange-traded fund when permissible. Grayscale first submitted an application for a bitcoin ETF in 2016 but ultimately withdrew iy because it determined the regulatory environment wouldn’t allow for a bitcoin ETF.

Now, several firms including Fidelity, NYDIG, and VanEck have applied for bitcoin ETFs in the US in the hopes that 2021 will finally be the year the SEC approves one.

“While several firms have submitted Bitcoin ETF applications in the form of an S-1 or 19b-4 to the SEC, we are confident in our current positioning and engagement with the SEC,” Grayscale said. “Today, we remain committed to converting GBTC into an ETF although the timing will be driven by the regulatory environment.”

Grayscale also said that the management fee of the GBTC fund will be “reduced accordingly” when the trust is converted to an ETF.

According to Fundstrat‘s lead digital asset strategist David Grider, the plan to convert the fund should relieve recent selling pressure on GBTC shares and will re-energize demand from bitcoin investors who are willing to contribute to the GBTC trust again.

“We think this is a very positive move for Grayscale to maintain its position as a leader as the largest listed Bitcoin product and this announcement should help close the negative premium gap,” Grider said in an email.

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US stocks dip as yields rise on Biden’s spending plan and pace of economic recovery

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US stocks were slightly lower at the open on Tuesday and bond yields rose as investors awaited President Joe Biden’s spending plan and continued to assess the fallout from the Archegos Capital Management implosion.

The 10-year Treasury yield continued its march higher, rising by 5 basis points, to 1.77%, its highest in 14 months, since the start of the pandemic just over a year ago.

“We believe the recent rise in nominal government bond yields, led by real yields, is justified and reflects markets awakening to positive developments on the faster-than-expected activity restart combined with historically large fiscal stimulus – all helped by a ramp-up in vaccinations in the U.S.,” a team of strategists from the BlackRock Investment Institute said.

Biden is expected to deliver a speech on infrastructure spending on Wednesday. The plan could include as much as $4 trillion in new outgoings and more than $3 trillion in tax hikes, sources told The Washington Post.

Here’s where US indexes stood after the 9:30 a.m. ET open on Tuesday:

Bitcoin rose above $59,000 as PayPal announced it would allow US consumers to use their cryptocurrency holdings to pay at millions of its online merchants. Bitcoin has added nearly $8,000 to its price in the past week.

West Texas Intermediate crude fell by 1.6%, to $60.55 per barrel. Brent crude, oil’s international benchmark, was down 1.35% to $64.11 per barrel.

Gold dropped 1.5%, to $1,687.40 per ounce.

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A luxury US hotel chain will accept bitcoin, dogecoin, and other cryptocurrencies as payment

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The bitcoin price broke past the vaunted $50,000 mark for the first time on Tuesday


Cryptocurrency users will now be able to pay for their hotel rooms with bitcoin, dogecoin, and ether when they stay at a Kessler Collection hotel.

The luxury hotel group, which owns hotels in Alabama, Colorado, Georgia, Florida, North Carolina and South Carolina, announced on Tuesday that it will accept cryptocurrencies including the meme-token dogecoin as forms of payment.

“This move will make it easier for guests traveling globally, both in time saved from going to a local currency exchange and in money saved with a lower exchange rate,” said Kessler Chief Financial Officer, Fravy Collazo.

The announcement comes as more institutions like Tesla and the Dallas Mavericks pledge to adopt cryptocurrencies as payment.

While Dallas Mavericks owner Mark Cuban has stated that dogecoin has no intrinsic value and is simply a “fun” asset, his NBA team is now the largest dogecoin merchant in the world. Last week he announced that the team has completed more than 200,000 transactions with the token.

Customers at Kessler Collection hotels will be able to pay in bitcoin, bitcoin cash, ether, dogecoin, as well as stablecoins USDC, Binance USD, Gemini Dollar, and PAX.

However, with many bitcoin investors preaching the message of “HODL,” which means holding the cryptocurrency in the long-term and avoiding selling, it’s hard to imagine the hotel chain will see a huge surge of bitcoin payments following this announcement.

“If you are optimizing for growing your investments, a better question is ‘why would you go on vacation if you can invest those funds in crypto?’,” Thomas Perfumo, Head of Business Operations and Strategy at Kraken told Insider. “An investor could otherwise simply purchase and transfer additional crypto without reducing their holdings, all within minutes or hours.”

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78% of institutional investors are not planning on investing in cryptocurrencies, though a majority say crypto is ‘here to stay,’ JPMorgan survey finds

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  • A JPMorgan survey of 3,400 institutional investors shows a majority do not plan to invest in or trade cryptocurrencies. 
  • However, 58% of investors surveyed said cryptocurrencies are “here to stay.”
  • The survey is the latest look into institutional sentiment on cryptos as more firms enter into the space.
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An overwhelming majority of institutional investors surveyed by JPMorgan said they do not plan to start investing or trading cryptocurrencies, though 58% said crypto is “here to stay.”

In a survey of roughly 3,400 investors representing 1,500 institutions around the work, 11% of investors said their firm either trades or invests in crypto, while 89% said their firm doesn’t.

Out of the investors who answered “no,” 78% of investors said it’s “not likely” their firm will trade or invest in crypto, while 22% answered “likely.”

The survey sheds a light on the state of institutional investor interest in cryptocurrencies. While bitcoin’s parabolic rise has garnered the attention of institutional and retail investors alike, the institutional community remains somewhat divided on the future of crypto. 

When asked: “What is your opinion on Crypto?” 14% answered “probably rat position squared (something to avoid,)” while 7% said it “will become one of the most important assets.” 58% of investors said it’s “here to stay,” and 21% answered that crypto is just a “temporary fad.” 

Almost all investors (98%) said they believe fraud in the crypto world is “somewhat” or “very much prevalent.” 

Multiple well-known Wall Street behemoths are taking in interest in cryptocurrencies and bitcoin. Most recently, a unit of Morgan Stanley said it’s exploring whether to invest in cryptocurrencies, according to Bloomberg. Morgan Stanley also has a 10.9% stake in MicroStrategy, which gives the bank indirect exposure to 7,681 bitcoin. 

BlackRock has authorized two of its funds to invest in bitcoin futures, while JPMorgan strategists have a theoretical price target of $146,000 for bitcoin.

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Tech stocks slide as inflation fears mount amid strong labor-market data

FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 19, 2020. REUTERS/Lucas Jackson/File Photo

US stocks opened lower on Thursday morning, with the tech-heavy Nasdaq sliding as investors mulled how better-than-expected jobless data would impact inflation. The 10-year Treasury yield rose to 1.45%, around the highest level in a year. 

730,000 Americans filed for unemployment in the week that ended Saturday. That’s lower than the 825,000 initial jobless claims economists surveyed by Bloomberg were expecting. 

“The sharp drop in jobless claims likely is due to people in states hit hardest by last week’s huge storm, especially Texas, having better things to do than make jobless claims,” said Ian Shepherdson, Pantheon Macroeconomics chief economist. “We expect a rebound next week. The trend seems to be about flat, but we remain of the view that claims will soon start to trend down, slowly at first but then more quickly as the reopening of the economy accelerates in April and May.” 

Continuing claims, which track Americans currently receiving unemployment benefits, dropped to 4.4 million for the week that ended February 13. Economists projected continuing claims to decline slightly to 4.5 million.

US durable goods orders rose 3.4% in January, beating analyst estimates of 1.1%.

Here’s where US indexes stood after the 9:30 a.m. ET open on Thursday:

Stocks popular among Reddit traders rallied in premarket trading Thursday. GameStop surged another 67% in early trading on Thursday after the stock more than doubled the previous day. The stock rose to $152.70 per share as of 8 a.m. ET, after closing 104% higher at $91.71 on Wednesday. AMC Entertainment rose 15%, Express Inc climbed 14%, and Koss gained 98%.

Coinbase is seeking a direct listing on the Nasdaq, according to paperwork the company filed with the SEC on Thursday. The largest cryptocurrency exchange in the US said revenue surpassed $1 billion in 2020. 

Analysts at investment giant Pimco said in a Wednesday note the US economy could grow by 7.5% in 2021 – a rate not seen since the 1950s – as a result of President Joe Biden’s $1.9 trillion stimulus package.

Berkshire Hathaway vice chairman Charlie Munger blasted Robinhood, slammed SPACs and dismissed bitcoin at the Daily Journal annual meeting Wednesday afternoon. Here are the highlights.

Bitcoin climbed above $51,000 Thursday morning.

Oil prices were lower. West Texas Intermediate crude fell 0.62%, to $62.83 per barrel. Brent crude, oil’s international benchmark, fell by 0.61%, to $66.61 per barrel.

Gold fell around 1%, to $1,780.10 per ounce. 

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Americans are becoming increasingly bullish on cryptocurrency as bitcoin soars to new records

Bitcoin.
Bitcoin miners are seeing gold despite the cryptocurrency’s recent fall.

  •  A new study of 30,000 Americans reveals 50% view cryptocurrencies as safe investments.
  • The survey also revealed 57% of investors think companies should accept crypto as payment.
  • Though crypto enthusiasts have mixed opinions on whether bitcoin will ultimately serve as a medium of exchange or simply a store of value.
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Bitcoin’s record-breaking rally to a $1 trillion market capitalization on Friday has increased the buzz around cryptocurrencies. Debates on whether these are worthy investments have flourished among investors, analysts, and the public. 

Despite critics arguing against the legitimacy of these assets, a new study reveals that cryptocurrencies are viewed as safe investments by 50% of Americans. Additionally, 41% of those surveyed said investing in the stock market and cryptocurrencies are equally risky investments. 

Conducted by Piplsay, a global consumer research platform, the study surveyed over 30,000 people in February on their views on digital currencies.

“The crypto bull run has seized the attention of millions of people who previously had never considered digital currencies like Bitcoin to be an alternative asset,” said Pavel Matveev, CEO of Wirex, a digital payments platform. “Bitcoin and other currencies are intended to have several uses, not least ease of exchange, purchase, and liquidity.” 

The survey also revealed that 57% of Americans think major companies should start accepting cryptocurrencies as payments. In a separate survey of 1,050 Americans conducted by DealAid, 50% of investors said they would be willing to pay for products using bitcoin. 

Some companies this year have already taken steps towards accepting cryptocurrency as a means of payment. PayPal in October 2020 said it will start allowing people to use cryptocurrencies starting this year, while Tesla announced in January it plans to start accepting bitcoin as payment. Investment banks JP Morgan and Morgan Stanley have both also expressed interest in considering cryptocurrency as payment.

Critics however are quick to argue that the volatility of cryptocurrencies makes them poor medium of exchange.

“If you bought a $50,000 Tesla with four bitcoins on October 1st, that purchase now has an opportunity cost of $212,000, because bitcoin’s dollar price has risen from $10,000 to $53,000 in those four and a half months,” said Robert Minter, Director of Investment Strategy, Aberdeen Standard Investments. “That type of volatility is unsuitable for transacting in an economy.” 

Bitcoin has skyrocketed in recent days, surging 60% this month alone. Ethereum, the second-largest cryptocurrency by market value, also soared to record highs Thursday. Even dogecoin, a cryptocurrency that began as a joke, has been gaining traction in recent weeks

“Bitcoin’s market cap hitting $1 trillion demonstrates the mainstreaming of cryptocurrency as a store of value,” said Adam Liposky, Ecosystem Operations Lead at Pocket Network, a blockchain data ecosystem for Web3 applications. “We expect that Bitcoin is only the first of many $1TR market caps that we’ll see in the blockchain economy.”

Enthusiasts argue bitcoin may exist solely as a form of value akin to “digital gold,” while other forms of digital currencies will emerge as forms of payment. 

Mike Venuto told Insider he doubts “we will ever buy coffee with bitcoin.” 

“This excitement obscures the reality of the original bitcoin thesis of decentralization, replacing the trusted third party and banking the unbanked,” Venuto, who manages an approximately $1 billion ETF, said. “The focus now seems to be the store of value argument from the limited supply.”

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