Greed and Fear: Chris Wood will book profit in Bitcoins at THIS level

Christopher Wood, the global head of equity strategy at Jefferies, reiterated his bullish stance on Bitcoin in the latest edition of his newsletter GREED & Fear. Wood, who entered Bitcoin at $22,779 in December 2020, plans to book profits once Bitcoin reaches $150,000, nearly 53 per cent above its current level of $98,300. 

Wood has a 10 per cent allocation in the crypto coin within his global portfolio for a USD-denominated pension fund. Additionally, he holds a 5 per cent weight in a Bitcoin exchange-traded fund (ETF) within his global long-only equity portfolio.

A Long-Term Commitment with Tactical Opportunities

Wood's base case is to hold Bitcoin positions without frequent trading, particularly in his pension fund portfolio. However, he sees $150,000 as an ideal level to begin profit-taking for those with a tactical approach or leveraged positions.

In his weekly investor note GREED & Fear, Wood noted that Bitcoin’s price tends to rally significantly post-halving cycles, though with diminishing returns. “Bitcoin will rally three times in this post-halving cycle, as historical trends show capital gains more than halve after each halving event,” Wood wrote.

The conviction to hold Bitcoin stems from regulatory optimism. U.S. President-elect Donald Trump has indicated a favourable shift in crypto policies. Trump’s pick for Commerce Secretary, Howard Lutnick, a known crypto advocate and CEO of Cantor Fitzgerald, bolsters this view. Cantor Fitzgerald plays a key role in the crypto ecosystem, serving as a custodian for Tether, a major stablecoin.

Bitcoin’s Meteoric Rise

Bitcoin prices stabilised after narrowly missing the landmark $100,000 level, as traders weighed the sustainability of optimism linked to President-elect Donald Trump’s pro-crypto stance.

The cryptocurrency dipped to $95,776 on Sunday after coming within $300 of the six-figure milestone on Friday. However, it rebounded to trade at $98,065 on Monday in Singapore. Market sentiment received a boost from Trump’s announcement of hedge fund executive Scott Bessent as his pick for Treasury Secretary.

Bitcoin has seen an extraordinary 164 per cent gain over the last year, rising from $37,000 to its current $98,300 level, despite the cryptocurrency’s April 2024 halving. The latest halving event saw Bitcoin’s supply cut in half, fueling optimism for a continued price surge.

Halving cycles have historically driven exponential price increases.

After the first halving in November 2012, Bitcoin gained 90-fold within 12 months. Following the second halving in July 2016, it rose 30 times in 18 months. The third halving in May 2020 delivered an 8-fold gain in 18 months, peaking at $68,992 in November 2021.

Since the most recent halving, Bitcoin has climbed by 54 per cent, underscoring its potential for further gains.

Bitcoin vs. Gold: Complementary Assets

Despite his bullish outlook on the crypto token, Wood maintains that Bitcoin is not a substitute for gold but a digital alternative. Gold has risen by 73 per cent, 54 per cent, 50 per cent, and 40 per cent against the yen, renminbi, euro, and Swiss franc, respectively, since early 2023.

“It is becoming risky for institutional investors to ignore crypto, especially with the Trump administration’s support pushing Bitcoin toward mainstream acceptance. However, Bitcoin should not replace gold in portfolios,” Wood emphasised.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.