Market research 101
What we’ve witnessed during the last few months is just how amenable high-profile investors appear to be to the bitcoin pitch. An analogy I keep coming back to is that of a focus group—you take a small sample and expose them to a certain idea or concept, and you study their reactions. If the focus group members are representative of a larger demographic, the group’s reactions can be expected to reflect the views of that larger demographic.The results are now in; the pitch is working.So far, our focus group is still but a nibbling, early majority. As time progresses, more and more allocators will be exposed to the bitcoin pitch. The more data we have, the more we learn about the pervasiveness of the argument and can begin to reason about what the outcome will be. Bit by bit, we’re leaving the hypotheticals behind and are transitioning into a world where we can make judicious assessments of where bitcoin is going.Sonata in ₿, Allegro
In my November thoughts, I talked about the psychological impact of the bitcoin price surpassing its last peak, a.k.a. the “second nudge effect”.Between Nov 25-Dec 15 we struggled to cleanly push past the psychological $20,000 threshold, and even dipped to a low of $16,200 for a moment. Quite contradictory, this occurred amidst one of the most concentrated bullish news flows we’ve ever had. A recap:- Nov 20: BlackRock (world’s largest asset manager) CIO Rick Rieder reveals that he views bitcoin as a contender to gold
- Nov 24: Pendal Group ($73.6bn AuM) starts investing in bitcoin futures
- Nov 29: Guggenheim’s Macro Opportunities Fund ($5.3bn AuM) reserves the right to allocate up to 10% in Grayscale Bitcoin Trust
- Nov 30: AllianceBernstein’s ($631bn AuM) Bernstein Research recommends that bitcoin can comprise 1.5% to 10% of portfolios
- Dec 2: BlackRock CEO Larry Fink: “Bitcoin can possible ‘evolve’ into a global market asset”
- Dec 4: MicroStrategy Inc. buys another $50m worth of bitcoin
- Dec 9: MicroStrategy Inc. offers $550 million worth of convertible senior notes and plans to use the net proceeds to buy bitcoin
- Dec 10: MassMutual ($235bn AuM), a U.S. life insurance company, buys $100m worth of bitcoin
- Dec 15: Ruffer ($27.4bn AuM) confirms a bitcoin exposure of ~$745m, around 2.7% of the firm’s AuM