Trying to dissect the moves of billionaire hedge fund managers can be a challenging task. For one, the public doesn't typically learn about these investments until a few months after they've been made.
Hedge funds tend to invest on shorter time horizons of 12 to 18 months, so they may only be interested in a stock for a few months; therefore, the stock may not have good long-term value. Finally, billionaires who run hedge funds aren't making every investment decision, and the market can humble even the best of the best.
This is why retail investors should not blindly follow the investment moves disclosed by billionaires in their 13F forms and conduct their own due diligence. But if multiple billionaires are buying a stock or fund, it can be a bullish indicator and therefore a good place to start your research.
With all that said, billionaires are currently betting on a BlackRock exchange-traded fund (ETF) that Wall Street analysts say could soar.
Image source: Getty Images.
Many are now bullish on Bitcoin
As seen in recent weeks, Bitcoin (BTC 9.07%), the world's largest cryptocurrency by market cap, has been highly volatile due to various factors, including the trajectory of interest rates, the Federal Reserve's balance sheet, and shifting economic expectations. However, many investors still see a long-term bullish scenario for Bitcoin, due to their view that the cryptocurrency and its 21 million finite tokens can serve as a hedge against inflation and potentially other forms of volatility, such as mounting U.S. government debt.
One way to gain exposure to Bitcoin is through the iShares Bitcoin Trust ETF (IBIT 3.49%), the world's largest spot Bitcoin ETF by assets under management.
NASDAQ: IBIT
Key Data Points
Spot-crypto ETFs directly purchase and custody the underlying cryptocurrency and then issue fractional shares based on ownership. ETFs are highly liquid and trade like stocks, making them an easy way to gain exposure to Bitcoin. In the third quarter of the year, several funds increased their stakes in IBIT or maintained a high level of ownership in the ETF:
- Coatue Management, run by Billionaire Philippe Laffont, increased its position by 135% in the third quarter and now owns over 132,640 shares.
- Schonfeld Strategic Advisors, run by billionaire Steven Schonfeld, increased its position by 20% in the quarter and now owns over 6.78 million shares.
- Tudor Investment Corp., run by billionaire Paul Tudor Jones, reduced its position in IBIT in the third quarter, but still owns over 2.9 million shares. IBIT is the fund's fourth-largest holding, excluding derivative positions.
I likely don't need to tell readers that there are many analysts, both on and off Wall Street, who think Bitcoin, and therefore IBIT, can soar. Most of these analysts are betting on the digital gold story continuing to unfold, along with higher institutional adoption, Bitcoin consuming more of the world's wealth, or the increased use of Bitcoin as a currency. Here are some of the price targets, both near and far, for Bitcoin.
- Strategy's Michael Saylor recently issued and reiterated price targets for Bitcoin on CNBC, setting the token's target for year's end at $150,000; $1 million per token over the next four to eight years; and $20 million per token over the next two decades.
- During an interview with CNBC in early November, Ark Invest's Cathie Wood slightly lowered her bull case price target for Bitcoin in 2030 from $1.5 million per token to $1.2 million per token.
- In August, Matthew Sigel, head of digital assets at VanEck, issued a $180,000 target for Bitcoin by year's end.
- Geoff Kendrick, head of digital asset strategy at Standard Chartered, reiterated a $200,000 year-end price target for Bitcoin.
CRYPTO: BTC
Key Data Points
Don't get overly fixated on price targets
Ultimately, setting price targets for Bitcoin is just as challenging as, if not harder than, predicting the S&P 500's price target one year in advance, so I wouldn't read too much into it. However, there is now growing support for investors using Bitcoin as a form of digital gold, which could offer investors a unique form of diversification in their portfolios. That's why I think every long-term investor might want to consider owning at least some Bitcoin.
