With inflation fears in the US and the crypto market tanking, investors are more than a little concerned about what the short term future holds.
For now, we’re holding firm with the same two positions we had open a fortnight ago, and still keeping an eye on the global markets in anticipation of any ETFs that look suitable for our goals.
Open Positions
Marstons PLC: This stock didn’t move much after the reopening of pubs in the UK for indoor drinking but the future could be bright as the population gains in confidence to start socialising as they did in the pre-pandemic days.Last week Marstons posted half-yearly results and it was grim. The six-month period leading up to May 17 will likely be the worst for a long time if everything continues to get back to normal. We had hoped for the hospitality sector to bolster itself over the last week but overall performance was much weaker than expected. That said, we intend to hold this position until the next round of reopening occurs in the UK on June 21. Summer is also late arriving in the UK which could be another reason why pubs haven’t been selling like they thought they would this last week.
Bitcoin: There’s no change to the plan to hold some bitcoin in our portfolio for the long-term; but readers can’t have failed to have seen the carnage in the crypto markets over the last week or so.
First it was Elon Musk tweeting his disapproval over the environmental wastage stemming from bitcoin mining. This immediately sent the price into freefall. Now we have the Chinese government stating their intent to crackdown on all cryptocurrency mining and trading.
The People's Bank of China released a statement saying that digital tokens would no longer be accepted as a form of payment by Chinese financial institutions. This news was yet another slap in the face for investors at the end of an already steep 35% drop in the price of bitcoin. To make matters worse, the government in China's Inner Mongolia Autonomous Region requested that citizens report anybody who was running a mining operation.
Where Is the Crypto Market Heading?
There have been tons of snippets over the last fortnight, each giving us news from finance industry insiders. Ark Investment Management CEO Cathie Wood gave an interview to Bloomberg TV and said it’s her opinion that bitcoin will reach $500,000 in the future, and that now it is only “on sale.”She continued by adding that solar energy will solve the environmental concerns over cryptocurrency mining, and the adoption of this technology will likely now be accelerated.
Ethereum was another casualty last week, losing half of its value at one point. After firmly establishing itself as the “number two” cryptocurrency the picture hasn’t been quite so clear during 2021. This brings us to the man who has caused most of this shift—Elon Musk. The Tesla boss has shared his support for dogecoin, helping the price rise enormously, but the reverse has been true for bitcoin and ethereum.
Is the future of crypto dependent upon business and celebrity figures and what they have to say? Musk has made a lot of enemies over the last few weeks: investors are convinced that he is treating the whole industry as something to joke around with.
Before long we are probably going to see regulation established on a more serious basis. So far governments haven’t bothered too much, not seeing blockchain technology as any kind of a threat. Now though, with China’s lead, things might start changing quite quickly.
