Maybe some good news for Bitcoin, Crypto stocks
It’s been a trying year for bitcoin, other digital currencies and crypto-correlated stocks, and while the near-term outlook is split between some renewed optimism and expectations of an extension of the “crypto winter.”
Clearly, weary investors and crypto followers would prefer to see optimism turn into concrete results, because if that happens, the benefits could be widespread, including accruals to exchange-traded funds such as Invesco Alerian Galaxy Crypto Economy ETF (SATO) and Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC).
Both ETFs have exposure to Grayscale Bitcoin Trust BTC (GBTC). From there, the lineups are, in various forms, chock full of crypto-correlated stocks. In other words, BLKC and SATO make for predictable but potent takers should bitcoin and other digital assets bounce back.
Count Morgan Stanley Chief Investment Officer (CIO) Mike Wilson among the market observers who are short-term bullish on bitcoin.
“Following the correlation between the two markets, some market experts forecast future price trends. According to Morgan Stanley’s CIO, Michael J. Wilson, the US will soon have a short-term rally of 16%. The bear market expert noted that the price rise would only be possible without an official recession or earning capitulation,” reports NewsBTC.com.
If a key technical indicator for the broader market is reached or exceeded, risk assets could come back into vogue, potentially sparking a rally in crypto-correlated stocks, lifting BLKC and SATO in the process.
“According to Wilson, the U.S. stock market will witness a short-term recovery. This presents the possibility of the S&P 500 hitting the 200-week moving average (WMA), according to Bloomberg,” according to Bloomberg. NewsBTC.com. “Due to the unfavorable macroeconomic conditions and the effects of the increased interest rates, the index fell this year. However, the current price movement of Bitcoin has not been too impressive.”
As for the S&P 500 seeing a significant near-term rally, that would be relevant to BLKC in particular because the ETF’s 60 stock components include many S&P 500 names. These include Walmart (NYSE:WMT), JPMorgan Chase (NYSE:JPM), International Business Machines (NYSE:IBM), Microsoft (NASDAQ:MSFT), Intel (NASDAQ:INTC) and Nvidia (NASDAQ:NVDA), among others. .
As for bitcoin’s price itself, which could have a profound impact on both BLKC and SATO, it continues to hover around the $20,000 range. Bulls believe a move to $23,000 could add upside, but some traders are in wait-and-see mode until that happens.
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The opinions and forecasts expressed herein are solely those of Tom Lydon and may not materialize. Information on this website should not be used or construed as an offer to sell, a solicitation of an offer to buy or a recommendation for any product.
