Bitcoin reaches a 14-month high
Bitcoin (BTC) is on another astronomical rally, rising 22% in just over a week to reach a 14-month high of $9,300. The stock has skyrocketed 141% this year and outperformed all asset classes after weakness last year wiped out most of its gains from 2017.
Despite being mercurial, Bitcoin has been a surprising safe haven this year as stocks have been choppy amid trade war fears. As Treasury yields have been low, investors have been turning to other assets for a quick buck. Bitcoin has also been boosted by its institutional support.
Facebook’s cryptocurrency plans
Cryptocurrencies’ latest rally may be due to Facebook’s interest in having its own cryptocurrency. Although a Facebook cryptocurrency would present Bitcoin with competition, it could make cryptocurrencies more appealing overall.
From a portfolio management perspective, Bitcoin’s low correlation with bonds, equities, and gold makes it appealing. However, its extreme volatility entails risk.