Bitcoin’s 2022 Drop Might Be Good

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Bitcoin’s 2022 Drop Might Be Good

The price of Bitcoin sunk past $43,000 on Wednesday, its lowest level in months.

Catalyst: Wednesday’s selloff was most likely triggered by a hawkish announcement from the U.S. Federal Reserve that it might hike interest rates in March, which was sooner than expected.

Big Picture: There are also other reasons behind Bitcoin’s decline in recent weeks. Profit-taking among some Bitcoin investors is one reason. The lack of approval from the U.S. Securities and Exchange Commission for a Bitcoin spot exchange-traded fund (ETF) is also hurting the value.

Half Glass Full: The selloff is a good opportunity for current investors to lower their future tax bills. It is also a good opportunity for new investors to get into Bitcoin.

Final Thoughts: An executive from Goldman Sachs (NYSE: GS) recently predicted that Bitcoin could still reach $100,000 in the next five years, which shows that some people are still bullish on the cryptocurrency.

Notables

Notable Earnings Today: Bed Bath & Beyond (Nasdaq: BBBY), Walgreens Boots Alliance (Nasdaq: WBA), Constellation Brands (NYSE: STZ), ConAgra Brands (NYSE: CAG), Franklin Covey (NYSE: FC), WD-40 (Nasdaq: WDFC), Helen of Troy (Nasdaq: HELE), PriceSmart (Nasdaq: PSMT), Schnitzer Steel Industries (Nasdaq: SCHN), Kura Sushi USA (Nasdaq: KRUS), Lamb Weston (NYSE: LW), Duck Creek Technologies (Nasdaq: DCT), Lindsay Corporation (NYSE: LNN), Simulations Plus (Nasdaq: SLP).

Notable IPOs Today: Dave Inc. Class A Common Stock (Nasdaq: DAVE), Screaming Eagle Acquisition Corp. Unit (Nasdaq: SCRMU).

Notable Equity Crowdfunding Campaigns Ending Today: Capsule (Fundify), Bold Conscious Leaders (NetCapital), GZI (NetCapital), Katch (NetCapital).

Notable Economic Events Today: Jobless Claims (8:30 a.m. ET), Imports/Exports (8:30 a.m. ET), ISM Non-Manufacturing PMI (10:00 a.m ET), Factory Orders (10:00 a.m. ET).

Hasbro Welcomes New CEO

Hasbro (Nasdaq: HAS) appointed Chris Cocks as chief executive officer late Wednesday.

Details: Cocks, who serves as president and chief operating officer of Hasbro’s Wizards of the Coast and Digital Gaming division, will succeed Interim CEO Rich Stoddart on February 25. Stoddart was appointed after longtime CEO Brian Goldner passed away in October.

Quote: “In Chris, we have chosen a leader uniquely positioned to execute and evolve Hasbro’s Brand Blueprint strategy while continuing to generate growth and deliver strong shareholder returns.” - Tracy Leinbach, current Chair of the Board.

Background: Despite supply chain challenges, shares of Hasbro are up 9% in the past year.

Final Thoughts: Last month, Hasbro declared that it is offering a dividend of 68 cents per share.

Growth Stocks vs. Value Stocks in 2022

Due in part to new economic headwinds, there is a sentiment among investors that value stocks (companies that are trading at a lower price when compared to fundamentals) could outperform growth stocks (companies that grow at a rate higher than the market) in 2022.

Great Value: Higher inflation coupled with the expectation that the Federal Reserve will hike interest rates in 2022 is good for value stocks. These cheaper stocks could provide an inflation hedge for investors in 2022.

Personal Growth: While the economic trends are ripe for value stocks, some experts still favor growth stocks. This is particularly true for mid-cap growth stocks that experienced a selloff in 2021. These stocks could rebound in a big way in 2022 and outperform value stocks.

Both Ways: And yet, some investors are seeking out both value and growth stocks in 2022 to build a more robust portfolio.

Final Thoughts: Growth stocks outperformed value stocks in 2020 and 2021.

Trends to Watch

Beware the Ides of March: Fed Minutes Point to Possible Rate Increase in March (The Wall Street Journal)

Show Time: What it’s like at one of the world’s biggest tech trade shows as omicron surges (The Washington Post)

First of Its Kind: One company is offering dividends in bitcoin—but experts say it may be better to just buy the cryptocurrency directly (CNBC)

For Sale: WarnerMedia and ViacomCBS Are Exploring Possible Sale of CW Network (The Wall Street Journal

Jumping on the Bandwagon: GM’s Electric Chevy Silverado Is Here. It’s, Well, Acceptable. (Barron’s)

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