Pre-commercialization Today: Bitcoin has just passed another hurdle. He can still stumble

What’s happening: A majority of lawmakers have approved a proposal by Salvadoran President Nayib Bukele that will allow bitcoin to be used as legal tender in the country alongside the U.S. dollar. The law states that “all economic agents accept bitcoin as a means of payment when it is offered by the buyer of a good or a service”.

It’s a bold move that should be applauded by bitcoin fans. But that might not help prices stabilize, with some strategists warning that the digital coin could dip to $ 20,000, where it was trading in December 2020.

Remember: After nearly touching $ 65,000 per coin in April, bitcoin, which is notoriously volatile, crashed and was last trading above $ 34,000. Analysts fear that breaching the psychologically important level of $ 30,000 could fuel the sale.

It traded for $ 31,025 this week after U.S. investigators recovered millions of cryptocurrencies paid as ransom to hackers who shut down the Colonial Pipeline last month.

Jeffrey Halley, senior market analyst at Oanda, has warned his clients that bitcoin could hit $ 22,000 in the next few days if the sale continues, while Rich Ross, technical analyst at Evercore ISI, believes $ 20,000 is over. the table if the digital currency exceeds $ 29,000.

The wild swings in the price of bitcoin are giving some institutional investors – a growing force in the market – cold feet.

British wealth manager Ruffer has abandoned his position in bitcoin amid fears over the recent speculative frenzy. After taking a position of around $ 600 million in November, when bitcoin was trading at nearly $ 15,000, the company began selling its stake in 2021, making a profit of $ 1.1 billion. Ruffer completed its release in early April, when bitcoin was trading at $ 55,000.

“It just seemed like this would be a nicer time to look aside than in the trenches,” Duncan MacInnes, chief investment officer at Ruffer who helped manage his stake in bitcoin, told the FT, who first reported the news.

This does not mean that everyone has turned bearish. Analytics firm MicroStrategy announced this week that it is selling $ 500 million in junk bonds so it can buy additional bitcoin. And Michael Sonnenshein, the CEO of Grayscale Investments, told me in a recent interview that his clients weren’t afraid of falling crypto prices.

“When investors find periods when prices collapse or fall back, they will opportunistically use those declines… to create positions,” Sonnenshein said.

He expects pension funds, insurance companies and other professional investors to continue exploring bitcoin as an asset class.

“I think institutional adoption continues to grow exponentially,” Sonnenshein said.

A new meme share class is emerging

You are familiar with GameStop (GME) and AMC (AMC). But after a hectic week of trading for these stocks, attention is starting to drift further away.

The latest: Chattering on Reddit’s popular WallStreetBets forum increases Wendy’s and Clover Health shares.

Wendy’s (MAGNIFYING GLASS) Stock jumped 26% Tuesday and is up 5% in pre-market trading on Wednesday. Reddit users have spoken about the company’s irreverent social media feed and its “chicken tendencies.” WallStreetBets users have long focused on “tendies”, a reference to earnings or benefits made on an investment.

Clover Health jumped 86% on Tuesday and is still soaring 22% in pre-market trading. The healthcare company went public in January when it merged with a specialist acquisition company, or SPAC, created by famous venture capitalist Chamath Palihapitiya.

The startup now tops Vanda Research’s ranking for tracking retail investments. Wendy’s is in fourth place.

Note of caution: Lordstown Motors, an electric truck startup that generated a lot of hype after merging with a PSPC in 2020, warned on Tuesday that it was almost short of money and may be forced to close its doors the following year.

Lordstown Motors shares are down 63% from a recent peak in February – a reminder that the company’s fundamentals can still catch up with online fan favorites eventually.

Corporate America is not meeting its commitment to diversity

The level of diversity on the largest boards of directors in the United States has never been higher. But it is still far from being comparable to what the American company looks like, reports my colleague of CNN Business Jeanne Sahadi.

White women and minorities made up 38% of Fortune 500 board seats in 2020, up from 34% in 2018, according to a new study published this week by the Alliance for Board Diversity in collaboration with Deloitte.

Since 2010, the number of companies with more than 40% diversity (including women) has almost quadrupled.

Yet the average growth rate of minority representation on Fortune 500 boards has remained unchanged – at less than 0.5% per year – since 2004.

“The progress made in global diversity is in large part due to the increase in the number of white women on boards of directors,” the study notes.

Look at this space: The “retraining rate” of board members, that is, one person on multiple boards, has decreased for all groups. But in 2020, more than a third of the various board seats were still held by people on multiple Fortune 500 boards.

following

Campbell Soup (CPB) and Vera bradley (VRA) publish the results before the US markets open. GameStop (GME) follows after the close.

Coming tomorrow: The latest European Central Bank meeting comes as policymakers keep a close watch on whether the economic recovery triggers unhealthy inflation.