We’ll forgive you if you’ve deleted those files from your brain, but Bitcoin is slowly creeping back into the collective investing consciousness of late. Why? Well, more than doubling from $3,500 to $7,000 in starts to put you back in the conversation.
Q1 hedge fund letters, conference, scoops etc
2019 Returns…
Bitcoin $BTC: +111%
REITs $VNQ: +20%
Nasdaq 100 $QQQ: +18%
Oil $USO: +16%
S&P 500 $SPY: +16%
Small Caps $IWM: +13%
EAFE $EFA: +12%
Investment Grade $LQD: +9%
High Yield $HYG: +9%
EM $EEM: +5%
Bonds $AGG: +5%
Commodities $DBC: +5%
Gold $GLD: +4%
Cash $BIL: +1%— Charlie Bilello (@charliebilello) June 8, 2019
The doubling of Bitcoin and its flirtation with the $9,000 handle again means prices are the highest they’ve been since May of 2018, and about 220% higher than it was in May of 2017, if you can believe it. Although the Wall Street Journal warns that “The [Bitcoin price] gain may be less about demand for bitcoin and more about problems at the embattled exchange Bitfinex.” (mayyybe related to something like this).
One market is paying particular attention to this move, the CME Bitcoin futures contract, which had its best month since launching in May, with the average daily volume reaching more than 13,600 contracts. That’s equal to $515 million notional value or 68,000 equivalent bitcoin, up 27 percent when compared to the month of April. On May 13, bitcoin futures traded a record single-day volume of 33,677 contracts (168,000 equivalent bitcoin or $1.3 billion notional value) while on May 28, BTC hit a record open interest of 5,190 contracts.
It’s not all rainbows and lollipops, though. The CBOE, who was first to market with a Bitcoin futures contract, has shut down their Bitcoin futures product due to lack of interest. This is likely more of a winner take all effect happening between the two exchanges than a commentary on the need/desire to hedge Bitcoin, but is worth noting none the less.
Meanwhile, some futures trading managers are getting more and more involved in the growing futures market, with one manager able to post a 20%+ month in May [Past performance is not necessarily indicative of future results]. Call or email us at invest@rcmam.com for more details on this program’s strategy.
PS – In May 2019, Bitcoin even rivaled google searches for terms like Trump and Old Town Road (if you know, you know).
(Red=Trump)
(Red=Old Town Road)
Article by RCM Alternatives
