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Christopher Wood’s decision to hold his Bitcoin investments despite its price rise reflects a broader belief in the cryptocurrency’s long-term potential.
As of November 23, the price of one Bitcoin stands at $98,675.62
Bitcoin has been on an impressive upward trajectory, recently nearing the $100,000 mark. As of today, the price of one Bitcoin stands at $98,675.62, marking a significant increase of 7% in just the last week. This surge follows a global market rally that began with Donald Trump’s unexpected victory in the US presidential election and has continued into 2024. Notably, among the investors capitalising on this boom is Christopher Wood, the global head of equity strategy at Jefferies. Despite the massive increase in Bitcoin’s value, Wood is not ready to sell his holdings, even at nearly $100,000 per coin. So, why is he holding on?
Wood’s Bitcoin Investment Strategy
Wood, who is known for his bullish stance on various assets, has a long-term vision for Bitcoin. He holds a significant portion of his investment in the cryptocurrency through a US dollar-denominated pension fund portfolio, which includes 10% in Bitcoin. Interestingly, when this fund first made its Bitcoin purchase in December 2020, the cryptocurrency was priced at just $22,779. This represents a massive paper gain of more than 300% on that original investment. Despite Bitcoin’s impressive growth, Wood has expressed that he intends to hold his position until the price reaches $150,000, which he believes is the right level for profit-taking.
In a recent note titled “Greed and Fear,” Wood emphasised that $150,000 per Bitcoin would be the target price at which he would begin to consider selling some of his holdings. His decision to hold on, even as Bitcoin approaches $100,000, is rooted in his belief that the cryptocurrency will continue to rise due to several factors, including anticipated regulatory changes in the US.
Wood’s Confidence in Bitcoin’s Continued Growth
One key reason behind Wood’s decision to stay invested in Bitcoin is his conviction that regulatory changes in the US will support the cryptocurrency’s further appreciation. Wood points to statements made by Donald Trump, who, as the former president, hinted at potential changes in US crypto regulation, specifically through the Securities and Exchange Commission (SEC). Wood is particularly optimistic about the involvement of Howard Lutnick, a prominent figure in Trump’s transition team and a known crypto supporter, who could influence policy changes favoring digital assets.
Wood’s strategy contrasts with many traditional investors who remain cautious about Bitcoin’s volatility. However, Wood believes that the digital asset will continue to benefit from favorable regulatory shifts, especially as more institutions and even governments begin to embrace blockchain technology and cryptocurrency.
Bitcoin’s Exceptional Return Over the Past Year
Over the past year, Bitcoin has delivered extraordinary returns to its investors, with an increase of 164%. A year ago, the price of one Bitcoin was hovering around $37,000; today, it is almost triple that value. This dramatic increase has made Bitcoin an attractive investment option for both retail and institutional investors looking for high returns. Despite this, Wood is not yet ready to cash out, convinced that the price could soar even higher in the near future.
While some investors may view Bitcoin’s rise as a signal to sell, Wood maintains that there is still room for growth. His target price of $150,000 reflects his belief in the long-term potential of Bitcoin, even though it remains volatile in the short term.
Bitcoin vs. Gold: Wood’s Perspective
Despite Bitcoin’s success, Wood is not of the opinion that Bitcoin will replace gold as the world’s primary store of value. While Bitcoin has gained significantly, gold has also seen strong returns in 2023, with increases of 73% against the yen, 54% against the renminbi, and 40% against the euro. Gold’s performance continues to outperform many traditional assets, and Wood does not foresee Bitcoin dethroning gold anytime soon.
Nonetheless, Christopher Wood’s decision to hold his Bitcoin investments despite its significant price increase reflects a broader belief in the cryptocurrency’s long-term potential. While the asset has already proven to be a highly profitable investment, Wood sees further upside ahead, bolstered by anticipated regulatory changes and growing institutional interest. For now, he remains patient, waiting for Bitcoin to reach $150,000 before cashing out – a target that, in his view, is still well within reach.
