CFRA’s webinar series cover critical themes and topics that financial professionals and investors should consider as they outline their investment strategy. In our ongoing series, The New Normal: 2021 Outlook equity analysts explore trends and topics across key industries that are at the center of projected market changes as we transition from Covid-19 and the uncertainty of the U.S. elections to economic recovery and a period of adjustment to the new market environment.
Acclimating to the new market environment means that many investors may need to re-orient their investment approach. CFRA is here to provide timely, forward-looking investment research and the best support to investors and financial professionals. Register for this session in the webinar series and stay in the know.
Session 4: Investor's Guide to Bitcoin
After crashing 85% and being left for dead in 2018, bitcoin has recently surged to new highs, rising over 300% in 2020. Trading at approximately $35,000, it’s market cap of nearly $650 billion has surpassed Visa.
But what exactly is bitcoin? If you’ve asked five different people knowledgeable about bitcoin you have probably received five different answers. We believe bitcoin is truly something new and trying to describe it with existing terms and analogies is difficult. It is similar to trying to describe "the internet" in its early stages. We see bitcoin as a network that operates as a new kind of payment system, while the digital bitcoin tokens are increasingly being treated as an alternative money.
Many investment managers are already familiar with the alternative asset class, which encompasses anything that is not considered traditional (stocks, bonds, cash). These alternatives are attractive because they can provide returns that are not correlated with traditional stocks and bonds, they have unusual exposures or asymmetric payouts.
Alternatives are especially attractive as both bond and stock yields continue to decline, forcing investment managers to seek returns elsewhere. We think bitcoin could be considered an alternative asset class, and a small allocation has the potential to enhance return and reduce risk. In this session, moderated by Ken Leon, CFRA Director of Equity Research we heard from Chris Kuiper, CFRA Equity Analyst and he provided a crash course on bitcoin which attended to the following questions:
Vice President, Equity Analyst, CFRA
Chris Kuiper is Vice President of Equity at CFRA, conducting fundamental analysis and valuation assessments within the Consumer Finance, Capital Markets, and REITs areas.
Moderator, Director of Equity Research, CFRA
Ken Leon is Director of Equity Research at CFRA. He is responsible for analytical research as well as client servicing. As a subject matter expert, his research industries include Diversified Banks and the Housing Market, with coverage of Homebuilding, Home Improvement Retail, Home Furnishings and Real Estate Investment Trusts (REITs).