Unhedged: bitcoin is equity, not money

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Unhedged: bitcoin is equity, not money

Welcome back to Unhedged. If you have thoughts (and because today’s topic is bitcoin, many of you will), email me: [email protected]

Bitcoin is equity, not money 

Years ago I was hired, with no experience in finance, as a trainee analyst at a hedge fund. I asked my soon-to-be boss how I should prepare. He said: “Get a financial calculator and learn to use the net present value keys. That’s really all there is to it.” 

He was right. I have thought ever since in terms of streams of future cash flows, terminal values, and discount rates. Every other analytical tool I have acquired since has been secondary.

Which is why I am uneasy doing what I need to do today: write about bitcoin, an asset far beyond the comprehension of my HP-12c (millennials may now go look up what that is). The value of the stock of bitcoins fell by 29 per cent at one point today, a decline in value of $225bn. Here is the price of an individual bitcoin through the day on Wednesday (with the final tick on Tuesday included on the left) (data from Bloomberg): 

Furthermore, bitcoin and the overall market trend seemed to be linked. From Refinitiv:

Something needs to be

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