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Bitcoin Gets Major Boost From U.S. Megabank

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Morgan Stanley is the first large U.S. bank to give its wealth management customers a way to buy bitcoin funds.

The large bank, a giant in investment and wealth management with $4 trillion in total assets under management, told its people in a Wednesday message that they are creating three funds that give ownership of bitcoin, according to insiders.

The move is a big step for the mainstream adoption of bitcoin as an asset, and was made by Morgan Stanley after their clients demanded access to the digital asset, said the sources, who did not want to be identified.

Bitcoin’s recent rally has put pressure on Wall Street firms to consider jumping into the new asset class.

But, for now, the company is only letting its top clients invest into the asset: The bank considers it only appropriate for investors with “greater risk tolerance” and who have at least $2 million in funds at the bank. While investment firms need $5 million in assets to qualify. And for both, the accounts must be older than 6 months.

But even if clients have the account and assets to get access to the new funds, Morgan Stanley is capping their bitcoin investments to 2.5% of total net worth.

Two of the funds being created are from Galaxy Digital, while the last is a partnership between bitcoin firm NYDIG and FS Investments.

The FS NYDIG Select Fund and Galaxy Bitcoin Fund LP require a minimum of $25,000, while the Galaxy Institutional Bitcoin Fund LP requires $5 million.

Clients can possibly make investments next month, after the bank’s advisors finish training tied to the new offerings, said sources.

Meanwhile, earlier this month, JPMorgan filed official papers related to their new investment linked to a basket of crypto-exposed stocks like MicroStrategy, the firm that holds a significant amount of bitcoin, and payments company Square.

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Amazon Swallows Up Another Leading Industry

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Amazon.com is now the top seller of clothes in the nation, according to new data from Wells Fargo, as the tech leader earns more profits during the pandemic.

Wells Fargo says the company’s U.S. sales of shoes and clothing, including third-party Amazon-hosted stores, increased by 15% in 2020, hitting $41 billion.

“While this was just a modest growth of 15%, we think demand for clothing was harmed by the pandemic,” the report read.

Still, that number is 20%+ greater than Walmart,
which ranked in at the second spot. And accounts for 11%-to-12% of all clothing sold in the nation as well as 34%-to-35% of all clothing sold online.

Just six other firms sold $10 billion or greater in clothing: TJ Maxx parent TJX Cos., Macy’s Inc., Target Corp., Kohl’s Corp., Gap Inc., and Ross Stores Inc.

Wells Fargo predicted that clothing sales on Amazon will reach $45 billion in 2021, a “modest” 10% increase, with customers buying clothes in stores as the virus passes.

Wells Fargo also said it expects online sales of clothing to be flat this year, although that would still place sales higher than pre-coronavirus levels.

Amazon’s U.S. gross merchandise volume in all industries excluding Whole Foods was $290 billion in 2020, an increase of $9 billion.

“Given that their addressable market increased by $180 billion, this means Amazon was around 50% of online clothing’s sales growth in 2020,” the report said.

The recent Adobe Digital Economy Index discovered that coronavirus gave the e-commerce industry a bump of $183 billion dollars in 2020.

“The pandemic gave us a rare change in online shopping, around a 20% boost, and future income growth will build off this. 2022 is anticipated to be the first trillion-dollar e-commerce year,” Adobe wrote.

Amazon stock has gone up by 71% over the past 12 months, beating the S&P 500,
which is higher by almost 56% for the period.

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Legendary Investor Stuns Crypto Fans In This Interview…

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During an interview with The Korea Economic Daily, legendary investor Howard Marks spoke about many different topics including alternative assets and investments like Bitcoin.  

He spoke about how investors were “deemphasising bonds and stocks” because the returns were gone. This led them into “alternative assets”. 

Marks mentioned that most Americans have their 401K, but that these funds were mostly invested into traditional markets rather than alternative vehicles. He said the US government will “find a way” to let 401Ks get exposure to more alternative assets. 

He then suggested that people who want to get exposure to more assets should buy stocks of companies that are currently investing into them.  

About Bitcoin, he said he had dismissed the asset back in 2017 as he thought it had no value. But he cited that diamonds, paintings or gold do not have intrinsic value either but are still valued greatly. 

Marks revealed he had been studying Bitcoin and said: 

“the supply of Bitcoin is controlled by the technology to be limited to 21.5 million coins, and there are already 19 million coins out there, so it can’t expand much more – unlike fiat currencies which can keep expanding to infinity, and the demand is rising as more investors are becoming comfortable with it and getting into the market.” 

He went on to say how good it was to be able to buy and sell Bitcoin instantly 24 hours everyday, compared to banks that had closing times that stopped wire transfers.  

Confidentiality was another plus that Marks mentioned. He said nobody would see your holdings, least of all the government.  

“Nobody can take it from you – it’s better than an emerging market currency” 

Marks concluded the interview by saying his first opinion on Bitcoin was a “reaction without knowledge”, and he admitted it wasn’t good to talk about things you don’t know.

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Democrats Push for “Debt-Deletion” — Here’s How Much..

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Democratic Senate Majority Leader Chuck Schumer, N.Y., has renewed calls for President Joe Biden to cancel $50,000 of student loan debt only days after Biden signed the $1.9 trillion relief plan into law.

Schumer said he thinks Biden has the ability to forgive up to $50,000 in student debt during his speech on the floor of the Senate, which he claimed would be a “life-changing decision.”

“President Joe Biden to his credit has proposed some loan forgiveness, up to about $10,000,” Schumer said.

Liberal Democrats have been pushing the policy as the country is weighed down by $1.56 trillion worth of student loan debt. Rep. Alexandria Ocasio Cortez, D-N.Y., Senator Elizabeth Warren, D-Mass., and Rep. Ayanna Pressley, D-Mass., are a few of the supporters of the measure.

Biden, however, has refused to give into their requests.

He responded that the policy could unfairly help people who went to expensive schools, like Ivy League universities, over other people who went to public colleges, during a CNN town hall earlier this year. Biden has stuck to his $10,000 figure.

Senator Schumer said this Monday that the $50,000 cancellation would also help solve the racial wealth gap.

The Senate Majority Leader also lauded a rule in the recently passed American Rescue Plan that would guarantee no taxes are owed on any canceled student loan debt.

Schumer compared taxing forgiven student debt to giving with one hand and taking with the other.

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Dow Breaks Another Record — But Some Are Starting To Worry

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The S&P 500 and the Dow Jones Industrial Average on Monday closed at record highs and Treasury yields stayed below one-year highs as investors analyzed inflation risks following the enactment of the $1.9 trillion relief program.

The Dow ended 174 points, or 0.53%, at a number of 32,953. The index ended higher for the seventh session in a row and reached an intraday record.

The S&P 500 rose for a fifth day, up by 0.65%, and the Nasdaq pushed ahead by 1.05%.

The 10-year Treasury lowered to 1.609% on Monday but stayed elevated. Wall Street’s confidence in a recovery was bolstered by the aid package and President Biden’s promise that all Americans would be eligible to get a coronavirus vaccine by May 1.

Many economists are claiming that inflation will increase with more stimulus. But Treasury Secretary Janet Yellen claimed inflation risks remain under control despite the stimulus.

“The greatest risk we have is a workforce that is damaged by long periods of unemployment,” Yellen said.

“People not being able to find jobs, can have a permanent effect on them. I think that is the greatest risk. Is there inflation risk? There’s a small risk. And I believe it’s manageable.”

Fears of inflation will also be on the minds of investors when the Fed meets this week. Fed Chairman Jerome Powell has stated that inflation will likely rise as the economy recovers but also says it will only be temporary.

The Fed’s two-day event starts Tuesday. And Wednesday, they will announce their decision on interest rates and Powell will hold on a press conference.

“With a Fed announcement coming this week, there might be fear increasing among traders as the market looks for signs that Chairman Powell could be moving away from his plan. But remember, coming from a record week, a small pullback would not be out of the norm,” said Chris Larkin, a managing director at E-Trade.

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This Tech Stock Might Be Invincible

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The NASDAQ’s recent decline after a strong showing at the start of 2021 shows some investors were waiting to sell pricey tech stocks and get their profits at the first signal of a shift. But that has not happened to Synaptics (SYNA).

Shares of the human-interface company have more than doubled this past year, and now they’re up 42%. 

In recent weeks the stock as taken off even as the overall market stumbled. Let’s analyze the reasons why and decide whether Synaptics has room to go higher.

The biggest reason behind Synaptics’ surge is its transformation toward a high margin model. It had a 52.1% non-GAAP gross margin for its second quarter last year. That was the greatest adjusted gross margin level in the firm’s existence and a large increase over its previous 42.9% number.

Synaptics produces an assortment of tech hardware and software. But its margin gains are the result of a change in the product lineup that was done three years back.

The numbers show it is on the right track to give more margin gains. The company expects non-GAAP gross margin to be 52.5% for this quarter, which is a pretty big increase over last year’s 44.1%. 

Not surprisingly, its earnings are anticipated to go higher in the approaching years, rising greatly over fiscal 2020’s adjusted earnings of $5.95 a share.

What’s fueling the company’s success?

The Internet of Things (IoT) industry is playing a huge role in boosting Synaptics’ numbers. The company sees this segment producing 43% of its overall revenue in Q3 of fiscal 2021, which would be almost twice the previous-year period’s number of 22%. The IoT business reported 74% year-over-year revenue growth in the previous quarter as new sales increased.

Synaptics expects this IoT money flow to keep its great pace of growth and give higher profits. Management stated on their recent earnings call they expect “the overall market for IoT to continue to grow at a 10% to 15% CAGR for the next three years.” 

And the company also says its revenue run rate from “smart displays, home automation, thermostats, smartwatches, home surveillance, drones, and streaming devices” can 2x within the next year and continue to grow in the long run.

This impressive momentum should keep strong revenue and earnings growth going into the foreseeable future. Which is why investors looking for a tech stock to add to their portfolios should consider Synaptics.

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Apple Value Skyrockets — Here’s Why

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Overall, Wall Street analysts continue to be hopeful on Apple. Not much has changed with the rating and price target distribution of the stock. It is still a strong buy recommendation, with a target of around $148 a share.

But one of the most eye-catching reports came from Wedbush’s Dan Ives, known as the “the bull of bulls.” 

He believes that Apple can nearly double in the future, as it goes to a $3 trillion market cap.

At the forefront of this analyst’s prediction is the iPhone. Dan believes the 5G super cycle will be a huge win for the tech giant, and a vital upside source to revenue estimates.

A few things support this idea: nearly 350 million out of 950 million iPhones are past due for an upgrade within the 5G cycle; and Apple’s phone sales might hit 250 million sold vs. the 220 million being estimated.

And according to Citi’s Jim Suva, Apple will hit the $3 trillion mark thanks to the company’s in-development electric vehicle.

Jim says Apple’s Car will be a value creator for investors, but also warns about low margins. The automotive industry is highly competitive, which would chip away at Apple’s large 38% gross margin in 2020.

Then there is Morgan Stanley’s Katy Huberty, who also gave her predictions. She took side against the idea that the iPhone production cuts are a serious problem for Apple.

The analyst says “the supply chain data points look like noise instead of an indicator of demand”. She also uses her research team to claim that iPhone 12 orders have increased, rather than decreased.

Twitter users give their predictions

One analyst asked Twitter users what they believed was the most important topic impacting Apple this past week. Here’s their response:

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Weekend Frenzy Causes Chaos On Wall Street

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Bitcoin dipped under $60,000 yesterday, one day after reaching an all-time record of $61,950. But the on-chain data shows the uptrend could continue in the short term.

One important metric showing an optimistic near-term is the increase in stablecoin inflows into the exchanges.

The entrance of more capital into the cryptocurrency market might further increase Bitcoin’s momentum.

When Bitcoin enters discovery and reaches a new record-high, the interest naturally increases.

There is a ton of liquidity in this fast-moving market, making this the perfect opportunity for whale investors to sell and take profit on their investments.

Filbfilb, a technical analyst that is pseudonymous, said that deposits into exchanges and high futures market funding rates were seen before the decrease.

High BTC inflows into exchanges possibly led to the decrease because large investors often deposit Bitcoin into exchanges when they plan on selling.

Therefore, the selling pressure from large investors and high futures funding rate was possibly the reason behind yesterday’s pullback.

How the BTC rally can continue

Despite the stop in the rally, exchange stablecoin inflow is increasing again, according to the latest data.

And given the way crypto exchanges handle stablecoin withdrawals and deposits to and from bank accounts, this shows that sidelined capital might be seeking to get back into Bitcoin.

And throughout last week, the one missing piece to the BTC rally was stablecoin inflows.

When Bitcoin increases without also seeing a rise in stablecoin inflows, it increases the possibility of an unfounded uptrend and a short-term downturn.

If capital continues to move back into the market, there is a high potential for further Bitcoin momentum and a broader rally.

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JPMorgan Quietly Stashes Away Load Of This Currency

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The financial giant JPMorgan Chase has finished paperwork with the SEC to start a debt instrument linked to eleven crypto-focused businesses.

The new debt instrument will give investors exposure to a pool of crypto-centered firms, according to their new filing with the United States SEC.

The firm’s Cryptocurrency Exposure Basket (Mar 2021) is said to be an “unequally weighted pool containing eleven Reference Stocks of companies” that work directly and indirectly with cryptocurrencies.

The instrument divides 20% to MicroStrategy, the firm with 91,064 BTC in its possession. It also gives exposure to Riot Blockchain (15%) and Square (18%), two companies with large exposure to Bitcoin. PayPal Holdings and Nvidia Corporation each make up 15% of the pool.

AMD, Intercontinental Exchange, Taiwan Semiconductor Company, Overstock.com, CME Group and Silvergate Capital are also included in the group.

JPMorgan announced that payouts are based upon how the pool of companies perform. The lowest possible investment is $1,000 with a maturation time of May 2022.

The new investment is one of many options for larger investors to get access to the surging cryptocurrency market. Institutional investors are already rushing to digital currencies, which helps to explain the price support of Bitcoin in recent months. The top digital currency was valued as high as $54,888 this week.

If the recently started Canadian Purpose Bitcoin ETF is any hint, investors are experiencing a big desire for digital assets. The fund had almost $100 million in volume after its opening recently, putting it on the path to go beyond $1 billion in assets after its first week. 

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Bitcoin Enters Billion-Dollar Industry

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Bitcoin has entered the hospitality industry with a luxury hotel chain adopting the cryptocurrency as a form of payment.

The Kessler Collection, a hotel brand, has started accepting Bitcoin and other cryptocurrencies.

According to a statement issued this week, the chain has partnered with payment service BitPay to start accepting Bitcoin.

Other cryptos being accepted include Dogecoin (DOGE), Ether (ETH), USD Coin (USDC), Binance USD (BUSD), Paxos Standard (PAX), and Gemini dollar (GUSD).

The hotel chain is now the latest luxury company to join with BitPay to enable crypto payments for their customers.

Fravy Collazo, the company’s CFO, says allowing crypto payments will also aid in reducing the forex burden on international customers. Stating that:

“This is among the most innovative ideas in the industry currently. I think cryptocurrency will only gain more acceptance, and joining with BitPay lets us offer more choices to our customers.”

Indeed, from travel agencies to airlines, several parts of the hospitality industries have quickly adopted cryptocurrency payments.

The coronavirus pandemic and its impact on travel has also accelerated the change towards digital currency amid the prioritization of contactless protocols.

In its 2020 report, crypto travel agency Travala reported that 68% of bookings for the month of February were with digital currencies.

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