Hedge fund manager Hugh Hendry is taking a bullish stance on Bitcoin and predicting lower interest rates in the near future.
He notes that market strategies targeting reduced volatility always face two key risks: either major tech companies could skyrocket in value to match the country’s GDP, or interest rates could rapidly drop to zero.
Hendry’s current approach involves holding Bitcoin and options that bet on the Federal Reserve cutting interest rates below 2% by the end of 2025. While there’s a chance Bitcoin might not perform as expected while stocks rise, he’s willing to accept that risk.
He compares Bitcoin’s relatively small market cap of $1 trillion to the enormous $13 trillion value of the top tech firms, suggesting that banks should be cautious about relying on these high valuations as collateral.
Unlike stable assets like Treasury bills, stocks at these levels have historically seen sharp declines relative to GDP.
Bitcoin, the leading cryptocurrency, failed to withhold the $60,000 support level and experienced a notable decline.
Mt. Gox has recently announced that it received court approval to extend its repayment plans, leading to a surge in market confidence.
Retail engagement with cryptocurrencies has significantly increased since 2020, according to a recent report from the International Organization of Securities Commissions (IOSCO) released on October 9.
Stablecoins like USDT have become vital in Latin America, assisting people in managing ongoing economic difficulties.