Bitcoin prices are not in great shape. Many investors and observers wonder if the first cryptocurrency in market value will soon return to its highs posted last November or if it is off to a period of decline known as crypto winter.
Well, if bitcoin now makes everyone agree on one aspect of cryptocurrency, it is its reputation.
Over the past few weeks, bitcoin has had victories on this front. Crypto is no longer seen in a bad light by the Biden administration given the presidential executive order that advises federal agencies/regulators not to stifle innovation.
The White House has also revived the idea of a digital dollar.
And then there are the classic finance superstars, who one after another say they got it wrong about digital currencies, and more specifically bitcoin.
After the hedge-funder Ken Griffin, it is the turn of the king of bonds, Bill Gross, to swear allegiance to bitcoin. In a recent interview with CNBCGross claimed to have invested in bitcoin.
“I just think, you know, cryptocurrencies are a bubble. I think there are survivors,” Gross said. “I think we need an alternative to the dollar as we’ve seen over the last two weeks and you know there will be multiple survivors and I’m invested in bitcoin to a small extent.”
Not a fan of NFTs
Gross does not say how many bitcoins he owns or when he bought them.
He explained trying to choose among the winners of the new finance. And while he seems to believe in bitcoin, non-fungible tokens don’t.
“The NFT phenomenon is the same way and reminds me of when my kids used to collect Beanie Babies,” Gross said.
Gross, 77, co-founded California-based Pimco in 1971 and rose to the top of the financial world after building it into a fixed-income giant. In 2014, he left the firm following clashes with other executives
The financier has a complicated history with crypto-currencies and in particular with bitcoin.
The young retiree Gross was initially open to bitcoin.
Back in 2016, the king of bonds thought bitcoin could be a safe-haven asset for investors fleeing volatility and falling interest rates.
“Bitcoin and blockchain technologies privately agreed among a small group of global banks are just a few examples of attempts to stabilize the value of their current assets in terms of future purchasing power,” he wrote on Bloomberg in October 2016. “Gold would be another example – a historical relic that it is. In any case, the current system is starting to be challenged.
But in the midst of cryptomania in December 2017, Gross completely changed his tune. He felt that bitcoin was a poor substitute for both fiat and gold. He justified his decision on the fact that it was difficult to use bitcoin to make payments.
“It’s not really a monetary alternative right now,” Gross said. Recount Bloomberg Television. “Buying a bag of groceries at the grocery store is going to be a bit difficult.”
Bitcoin would also not be an alternative investment in times of economic crisis, according to Gross. The famed financier also reiterated that bitcoin’s high volatility was one of the reasons it would not serve as a viable store of value.
Gross Likes Meme Stocks
Five years later, he has changed his tune again. But he is not alone.
By becoming a bitcoin investor, Gross joins a list of big names in traditional finance converting to digital currencies.
“Crypto has been one of the great stories in finance over the past 15 years. And I’ll be clear, I’ve been on the side of the naysayers during that time,” billionaire Ken Griffin recently said. “But the crypto market today has a market capitalization of around $2 trillion in round numbers, which tells you that I wasn’t right on that call.”
“I have a very small percentage on my portfolio to diversify,” billionaire and hedge funder Ray Dalio said in February.
In the same interview with CNBC, Gross also confirms that he continues to bet on the same stocks, which are also popular with crypto fans, especially on Reddit forums.
“I always negotiate GameStop (EMG) – Get the Class A report from GameStop Corp. and AMC (CMA) – Get the Class A report from AMC Entertainment Holdings, Inc.. These are lottery ticket stocks,” the investor said Thursday in a wide-ranging interview with Brian Sullivan.
“The volatility of these options that I deal with is so high that if you sell the options out of the money, it costs GameStop about $120. Now I sell four month calls at $200 and capture $12 or $13 per option because the volatility is around 120%,” Gross added.
The GameStop and AMC frenzy rocked Wall Street in January 2021 as retail investors piled into these stocks and options, causing massive short-term cuts that burned many short-dated hedge funds.