Bitcoin As Insurance
By Fri, Oct 9, 2020
Hey Scoopers,
The market was up on Thursday because the stimulus package is now back on the table. — More on that in the “Overall Market” section.
Beyond the overall market, one stock rose to the skies after a good marketing deal, and an outstanding performing stock fell after expectations didn’t meet reality. — More on that in the “What’s Up?” and “What’s Down?” sections.
Oh, by the way, Bitcoin is becoming an insurance policy against possible uncertainties in the economy. — More on that in the “Water Cooler” section.
But, first, here is a recap of what happened in the market yesterday:
Market Recap
- U.S. markets: All three indices ended Thursday in the green. Scroll down to the “Overall Market” section to read more.
- Cryptocurrency: Bitcoin’s price is up slightly after Square (Ticker: SQ) announced a $50 million purchase.
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Expect The Unexpected
The S&P 500 got in front of the Nasdaq and the Dow indices. The weekly jobless claims report was disappointing. More people filed for unemployment than expected—however, the market still ended the day in the green zone. The stimulus deal is back on the table apparently. Who knows what’s on the table and what’s not. As we discussed in the latest Scoop editions, anything can happen in the news, this close to the election. Investors should expect the unexpected.
Is It Really Worth That Much?!
So, what happened?
Shares of GameStop (Ticker: GME) were up by more than 57% on Thursday. The company has been struggling to grow in the digital era. With 5,000 stores globally, GameStop has been on the list of the next possible bankrupt retailers. However, on Thursday, the news broke that GameStop and Microsoft (Ticker: MSFT) have entered a marketing partnership through which gamers can buy the new generation of Xbox consoles and 24-month access to XBox’s digital game store via a discounted monthly subscription. It’s a good deal that can bring customers to GameStop, but it has left us scratching our heads whether it enables GameStop to be 60% bigger judging based on the stock’s rally on Thursday?!
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It’s All About Expectations
So, what happened?
Shares of Domino’s Pizza Inc (Ticker: DPZ) were down by more than 6% on Thursday. The company announced its latest quarterly earnings report. Before Thursday, money was flowing in, and market sentiment was quite positive. Nothing in the report was short of excellent. Revenue was up. The company opened more than 200 net new stores, and net income was higher than last year. The problem was that the performance was lower than expected. The stock market is all about expectations, and it doesn’t matter what you do. What matters is what people expect you to do.
Why Buy Bitcoin?
So what happened?
Whatever you think of Bitcoin and cryptocurrencies, some people are super excited about its future. Included in those people is Square (Ticker: SQ) who just published a whitepaper on why it has invested $50 million in Bitcoin.
It seems Bitcoin is an insurance policy in case economic conditions turn for the worst. It’s also a way for the company to participate in the rapidly changing crypto technology. People are worried about possible economic uncertainties and are investing in Bitcoin as insurance. This is the second company doing so. Earlier in the year, MicroStrategy (Ticker: MSTR) did the same thing.
If you have any questions, or suggestions let us know by emailing us at members@tradestocks.com. We look forward to hearing from you.
About the Author
The authors of this Scoop are the editorial team at Stock Card, led by Hoda Mehr. Hoda Mehr is CEO and Co-founder of Stock Card and the host of Renegade Investors podcast. She runs a community of 40,000 stock market investors and manages Stock Card's successful flagship portfolio, Roll with Our CEO, on Stock Card Portfolio Store. Hoda is an Economist with an MBA from Concordia, John Molson School of Business. She applies behavioral economics, data journalism, and storytelling to all aspects of her work. Before starting Stock Card, Hoda worked as a strategy and insights lead at technology companies including Symantec, Aimia and Sony. Create a free account to do your stock market research easily and mistake-free: Stock Card Stock Card
