2024 is becoming a great year for equity markets in the U.S. The S&P500 has returned so far almost 24% and Nasdaq 26%. On top of that, the outperformance vs Europe and China, has attracted more flows into the U.S. But the real story this year has been Bitcoin. It’s up 106% YTD, and has received a significant push after the elections. Here’s the irony: Bitcoin can be seen as a long term call option that bets on the fall of the fiat system, and particularly the fall of the U.S. dollar hegemony. On the other hand, the U.S. equity market is betting on the U.S. (and global) economy in its current form. The new system vs the old system. Can they both go up at the same time on a sustainable basis? Should they? Is the rise in Bitcoin seen as a hedge against a gradual deterioration of the current system? Or is it just the canary in the coal mine that is advising on the high levels of government debt? As we get closer to year end and investors are thinking about repositioning portfolios for 2025, how much, if at all, would you allocate to Bitcoin?
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