Bitcoin is a must have in your portfolio: Expert – Yahoo Finance

Greg Swenson, Brigg Macadam Founding Partner, joins Yahoo Finance to discuss the outlook on the crypto market amid the push for crypto regulation and investment opportunities in the overall market.

KRISTIN MYERS: I want to continue this market conversation now with Greg Swenson, founding partner at Brigg Macadam. So, Greg, I want to first just start here on Bitcoin and cryptocurrency. I'm going to ask you about Gary Gensler's comments in just a moment. But I was reading through your notes. We're seeing right now Bitcoin down over 3%. Actually, almost 4% right now. Now, in your notes, you mentioned that Bitcoin, you called it a great inflation hedge. Why so bullish on Bitcoin as an inflation head, especially considering the amount of volatility that we have seen in Bitcoin and in cryptocurrency just even in the last two months?

GREG SWENSON: Yeah, that's a great question, Kristin. And yes, there has been plenty of volatility in Bitcoin. I mean, it's off almost 50% from its all-time high earlier this year. And you saw a lot of short covering even-- even last week. I think on the 25th, it went up to 48 at one point because of the massive liquidation of short positions, and then it settled back in around 40. So look, it's been in this range. It's sort of stuck in this 30 to 40 range. I think it's a massive buy when it gets close to 30, and maybe you take some of the leverage off when it gets close to 40.

But, you know, considering that you have this emphasis on regulation and all this chat from the SEC and other regulatory bodies and it's still holding in there in the high 30s, I think that's a really good sign. And I think, as you mentioned, long term, it's a great inflation hedge. The volatility, you have to live with it. You buy on the dips. When you see 20% corrections, you know, buy more. But at this point, I look at it as a long-term inflation hedge. With the money printing that's going on from the Fed and the government with the reckless spending, I think it's a must-have in your portfolio.

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KRISTIN MYERS: So now, of course, I would love to get your thoughts on what SEC Chair Gary Gensler did say about how he wants more oversight on not just Bitcoin, but the other cryptocurrencies. We've heard from-- some folks say that in the long term, regulation is actually going to be good for Bitcoin, good for some of the other cryptocurrencies. Of course, short term, it does cause at least some pressure on cryptocurrencies. But what are some of your thoughts and some of your comments that regulation is definitely coming, or could be coming, down the pike for cryptos?

GREG SWENSON: Yeah, look, it's inevitable, especially with this administration. I mean, you know, if it moves, tax it. If it moves a lot, regulate it. You know, that's-- that's going to happen. And ultimately, it stifles innovation. It adds market friction, which is unfortunate. But I think that's built into the price right now. Those expectations are there, and I don't think that's going away. So overregulation is something that the market has to deal with. It's unfortunate. It's happened in the energy sector, you know, since January. And I think that's, you know, that's been a headwind both for cryptos, for Bitcoin specifically, as well as energy, which you talked about in your prior segment.

But I don't-- ultimately, it'll be OK. And, you know, Bitcoin has done well in spite of, you know, the ban in China, liquidations around tax time, and I think you expect some, you know, additional or increased pressure for regulation as well as taxation. So that's something that, you know, ultimately will be a bit of a headwind. But I think in the long term, again, with the massive spending and the debasing of the currency, I think it's a long-term buy and hold, and don't worry about the volatility.

ALEXIS CHRISTOFOROUS: All right, Greg, I want to move away from cryptos for a moment and talk about the broader market and where you see opportunity because I understand you actually like equities outside the US right now. Can you tell us in particular which markets you're looking at?

GREG SWENSON: Yes. I mean, if you want to talk about specific or individual stocks, you know, in your earlier segment, we talked about BP earnings, and that's fantastic. I think, you know, I've been talking about BP for a long time, when you could buy it at around a 5% yield. I think it's down now, with the rally today, around 4.85%, but that's still a great yield. And it's got exposure to energy markets quite obviously, and that's a good inflation hedge as well because, you know, obviously, you know, to have exposure to oil and other energy segments is a good thing in an inflation-- inflationary environment.

In terms of the European market overall, you know, if you're playing the rebound trade, if you're playing the reopening and the economic rebound, it's a good sign in Europe the expectations for earnings are actually-- or earnings growth are actually higher in Europe, or the MSCI ex US. And also consider that, you know, you will see more of this rotation trade out of tech into cyclicals.

You know, cyclicals are having a great day today. They've done well this year. But I think that rotation will continue. And, you know, the MSCI ex US is 56% cyclical, or industrial, as opposed to only 13% tech. And in the US, the S&P is 37% cyclical and 27% tech. So if you're playing the rotation trade, I like Europe and the rest of the world a lot more than the US.

KRISTIN MYERS: All right, we're going to have to leave that there. Greg Swenson, Brigg Macadam founding partner, thanks so much for joining us.

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Bitcoin is a must have in your portfolio: Expert - Yahoo Finance