For Immediate Release
Chicago, IL – November 21, 2023 – Today, Zacks Investment Ideas feature highlights YPF YPF, MSCI Argentina ETF ARGT, ProShares Bitcoin ETF BITO, Coinbase COIN and MicroStrategy MSTR.
3 Reasons Bitcoin's Momentum Is Just Beginning
Whether it be a game of pool, a "2-minute drill" for a football team, or the stock market, momentum can play an integral role in technical and fundamental outcomes. On Wall Street, one can trace the heart of price trends to fundamental momentum. For stocks, this usually means increasing earnings expectations, leading to more investor interest. For other assets, it can mean scarcity and a better use case. Either way, all price trends are birthed when buying pressure outweighs selling pressure and momentum picks up. Bitcoin, which is up ~125% year-to-date and is the world's most popular cryptocurrency, is one such asset class gaining momentum. Below are three reasons the Bitcoin momentum may just be beginning:
International Adoption & Real-World Use on the Rise
Last night, hyperinflation-plagued Argentina shocked the world by electing a wild-haired, chainsaw-wielding Libertarian candidate named Javier Milei. After embracing socialism for years, an inflation rate of more than 100% a year pushed citizens of South America's second-largest economy to move in a completely different direction and try something new politically. Years of money printing, currency devaluation, and corruption have collectively brought the country to a tipping point, disrupting the delicate balance between money supply and economic output. Investors cheered the news and sent domestic juggernauts like oil juggernaut YPF higher by ~34% and the MSCI Argentina ETF higher by more than 10% in volume which tracked 9,800% above average in early trading.
As is the case throughout history, crisis tends to lead to opportunity for investors. In the case of Argentina, the real opportunity may be in Bitcoin. Because Argentina is in such financial trouble, the economic picture remains muddled regardless of who's in office. However, the election results are bullish for Bitcoin for two main reasons. First, Milei is the second pro-Bitcoin presidential candidate in Latin America to gain office (El Salvador's Nayib Bukele was the first).
Between the two shocking election outcomes and a wave of US politicians embracing Bitcoin, the momentum is shifting politically on a grand scale. Second, and most importantly, Bitcoin is being used in the real world to stave off inflation. The evidence? Following the election news, Bitcoin hit new highs in three inflation-plagued countries, including Nigeria, Turkey, and, of course, Argentina. The evidence is clear: world citizens are gravitating toward Bitcoin because of its inflation-resistant protocol (there will only ever be 21 million coins, while countries around the world print money endlessly). Year-to-date, Bitcoin is up a robust 351% versus the Argentine Peso.
Bitcoin Supply is Stagnant
Over the weekend, Bitcoin analyst Will Clemente pointed out that"88% of Bitcoin supply hasn't moved in at least three months." In other words, many investors seem to be shifting to a long-term mindset. Because Bitcoin has a fixed supply, as the remaining supply wanes and investor demand increases, Bitcoin should rally further.
Long-awaited approval of ETFs will likely mean a quantum leap for the Bitcoin asset class. With juggernauts such as Fidelity applying for ETFs, demand will soar from both institutions and retail investors should the ETFs be approved (they likely will be). In the meantime, Bitcoin proxies such as the ProShares Bitcoin ETF, Coinbase and MicroStrategy should benefit dramatically.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report