Bitcoin euphoria puts other retail bets in shade
If you wondered why 18-year old twitterati and seasoned speculative traders alike have bet on bitcoin`s surge towards $20,000 this week, look no further than the comparison with the past year`s new stock exchange floatations.
As the below chart shows, the exchange-traded fund of Renaissance Capital that tracks a basket of newly floated companies after their initial public offerings has delivered a more than respectable 36 percent return so far in 2017.
That surpasses the S&P 500 index`s <.spx> 20 percent rise and is far better than last year when IPOs trailed behind an overall index fuelled by the Trumpflation trade and the cheap funds being pumped into markets by central banks.
Chennai Cyclone Michaung: Foxconn, Pegatron, Hyundai suspend operations due to floods, cyclonic conditions
Ranbir Kapoor starrer Animal joins Rs 200 crore club in 3 days; closes in on Shah Rukh Khan's Jawan's record
SBI Amrit Kalash FD Scheme: This SBI fixed deposit scheme offers highest return than its other FDs; 400-day investment; calculations and more details
Mizoram Assembly Election Result 2023: MNF races towards majority; here is the list of winners and losers
Bihar Board Date Sheet 2024 for Class 10 and 12 announced; check schedule and how to get admit cards
(For a graphic of the IPO ETF vs S&P 500 click http://reut.rs/2jxWIrw)
Next to Bitcoin, however, it might as well be flat. The cryptocurrency has risen 1700 percent in value in the same period.
(For a graphic of the Bitcoin vs IPO ETF vs S&P 500 click http://reut.rs/2jznjVg)
That means $1000 invested in the U.S. IPO ETF at the beginning of this year was worth $1360 on Tuesday. Preferring bitcoin would have left the average amateur market punter with $17,545.
The cryptocurrency has faced harsh criticism for lack of transparency and Wall street is largely divided on how it wants to view the currency. Several banks and central bankers have warned against its meteoric rise in its value.
Chicago-based derivatives exchange Cboe Global Markets
Goldman Sachs has been arguing for some months that the lack of liquidity and increased volatility of bitcoin mean in the long run it cannot rival gold as a convincing term store of value.
The market cap for bitcoin is still just $275 billion versus the world`s $8.3 trillion worth of gold.
(For a graphic of Bitcoin vs Gold vs Oil click http://reut.rs/2yi8yas)
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)