MUMBAI: Christopher Wood, renowned strategist and head of global equity strategy at Jefferies, believes that investors should buy Bitcoin whenever there is a slump as he remains “extremely optimistic” about cryptocurrency.
Wood turned heads in December when he trimmed his positions in gold to invest in Bitcoin for the first time.
“Remember that institutional ownership of bitcoin has only just begun. It should also be remembered that bitcoin rose 85 times in the 12 months after halving in November 1st 2012 and 30 times in the 18 months after halving in July 2016, “Wood said in his latest GREED & Fear report.
So far, Bitcoin has only increased 418 percent since the previous supply cut from May to June 2020, Wood said.
Bitcoin hit the headlines again this week after Elon Musk-operated electric car maker Tesla announced it had converted $ 1.5 billion of its cash holdings into bitcoin and will accept the cryptocurrency as a means of payment for its products.
Wood believes other technology companies in Silicon Valley will follow: “Where Musk is going, others will certainly follow now. Mainly because, according to GREED & Fear, tech companies want to be seen as hip in the eyes of millennials. ”
Wood believes it is only a matter of time before the Securities Exchange Commission approves the first exchange-traded fund for Bitcoin.
Indian investors are most likely to miss Wood’s planned rally in Bitcoin as the government stands ready to ban private cryptocurrencies to promote their own digital currency. The government is likely to propose a bill to this effect in parliament. However, it remains to be seen whether the government will allow investors to hold cryptocurrencies as an asset class.
Turning to India, Wood said the country is emerging as “the best story after Covid recovery” with the rapidly declining active cases in recent months and the introduction of Covid-19 vaccines.
In terms of portfolio strategy, Wood kept his cyclical sector bias, believing that rising inflation expectations in the US are a sign that the cyclical recovery is consolidating. In this context, he was optimistic about banking and energy stocks.