Oxymoronic “Speculative Safe Havens”

Your opinions on top-of-mind issues in the U.S. and bitcoin:

“I think Congress could go to work on Social Security (as part of the debt solution). Even if they just moved the doomsday date out 20 years or so they would be hailed as heroes.”

Our next reader shares his observation on crypto:

“I do not see bitcoin as a safe haven, but rather as a low-profile way for wealthy individuals to move money between jurisdictions where it is otherwise difficult. As the price goes up from such demand, others see the rising price and jump on board. Thus, I see it as more of a highly-volatile speculation than a safe haven.

“I think it worth noting that bitcoin (over its short history) tends to make a high, drop 75-90%, and then go on to make a new high that is 100-300 times higher than the most recent low.

“I’m not expecting that it will do so again, but if it did, we’d be looking at the price of a bitcoin topping between $300,000 and $1,000,000.

“It’s probably worth a small speculation, clearly with money you can afford to lose.”

If you’ve taken a flyer on bitcoin, let us know how that’s worked out for you.

Your Rundown for Wednesday, May 15, 2019:

Fake Meat, Fake Currency, Fake Safety Plays?

“Some unlikely bedfellows in the green… emerged Monday, even amid the worst day on a intraday basis for the SPX this year,” says an article at Bloomberg.

We’d argue the bedfellows in question are not unlike at all.

First, Beyond Meat (BYND) is one of the few IPOs on the scene this year actually killing it. (On second thought, that’s probably a poor analogy for a purveyor of meat substitutes.)

On its first day of trading — May 2 — Beyond Meat shares rocketed 163% and then slowly came back to earth. Monday, even with extreme market volatility, shares rose 8%. Tuesday? Another 14%.

Bloomberg points out: “Some of [Beyond Meat’s] strength could likely be attributed to its status as a consumer staple (though is it more tech?).” Consumer staples being a conventional safe haven for investors.

An unconventional safety play, bitcoin, has also gone on a tear recently with 11-straight days in the green. “Crypto fans pushed the currency up more than 26% on a day of concern for risk assets,” says Bloomberg.

How are these two assets similar? Beyond Meat, while technically a consumer staple, is a fledgling IPO that’s never turned a profit; with this year’s spate of “deadbeat” IPOs — not unusual. As for bitcoin, no question it’s speculative.

Why do you think investors are turning to speculative safe havens? And, yes, that’s an oxymoron.

Market Rundown for Wed. May 15, 2019

S&P 500 futures are down 18 points to 2,820.75.

Oil’s down 0.71 to $61.07 per barrel.

Gold’s added $2.80 to its price at $1,299.10.

Bitcoin is down this morning by $35.11 to $7,944.08.

Have a day. We’ll talk tomorrow.

For the Rundown,

Aaron Gentzler

Aaron Gentzler

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Aaron Gentzler

Aaron Gentzler is the publisher of Seven Figure Publishing. He is also the editor of The Rundown and has been with Agora Financial / Seven Figure Publishing since 2005. He's been covering technology and markets for over a decade.

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