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Blog Friends with Ben

ATH for Bitcoin | What’s going on?

Bitcoin (BTC) has captured headlines with its soaring ascent to a new record high of $34,800 on Sunday.

 

Since the beginning of the pandemic, the digital coin that smoothed the path for the cryptocurrency revolution has advanced 800%. Then, on 16 December, BTC crossed a major milestone after reaching $20,000 for the first time ever.

 

In its 13-year history, BTC has undergone several sharp gains and drops. Take 2017, for instance: after soaring nearly four-fold in 35 days, the value crashed by two-thirds within a month.

 

Despite being the largest cryptocurrency in terms of market capitalisation, BTC is not yet considered a store of value as it is still extremely volatile. Having said that, many consider it to be on its way to becoming a mainstream asset, rather than simply the coin of gamers and coders.

 

While some traders consider BTC to be a risky asset, others view it as a safe-haven play, in the same way, that gold is often perceived.

 

So why did investors go Bitcoin-crazy during the pandemic?

Investors and traders buy and sell various assets, including cryptocurrencies, after some careful consideration. Here are some reasons why traders have been opting for bitcoin, now more than ever.

  • Some traders have enthused that Bitcoin has finally found its way to becoming a mainstream asset. Not only is the financial market embracing cryptocurrencies, but large institutional players are also eagerly welcoming digital currencies too. In fact, in May, JPMorgan (the largest US retail bank) announced that it is already processing crypto transactions on its platforms. PayPal is also opening its network to cryptocurrencies. What’s more, Bitcoin trades on numerous exchanges are in the process to go public. 
  • Governments and central banks unleashed unprecedented stimulus in response to COVID-19. Some traders see Bitcoin as a hedge against the risk of inflation caused by the response to the pandemic. In fact, Bitcoin’s limited supply – capped at 21 million – makes the top-traded cryptocurrency inflation-proof.
  • Interest in assets perceived as resistant to inflation along with the fear of a weaker dollar encourages traders to invest in Bitcoin. Specifically, Bitcoin investors consider the digital currency a better long-term investment than the US dollar.
  • Until recently, East Asia, North America and Western Europe were major centres for crypto trading, but the Bitcoin boom is also due to a shift in the market and Bitcoin hunger among bigger US investors. Although it’s too soon to speak about a fundamental market shift, it’s no secret that the crypto industry attracts US investors. Moreover, a lot of retail investors in the Asia market – many of whom caused Bitcoin’s 2017 boom – are no longer in the game.
Bitcoin’s Five Ws

Who

The original digital currency | The top traded | Still dominates the market | The world’s largest cryptocurrency by market value.

What

The first-born digital currency | Created, held and traded online | Not controlled by any central authority

When

2008

Bitcoin was born (father: unknown, pseudonym: Satoshi Nakamoto)

2010 (22nd of May)

Bitcoin Pizza Day – Laszlo Hanyecz agreed to pay 10,000 Bitcoins for two delivered Papa John’s pizzas

2017 (December)

Briefly reaching its All-time high $19,783.06

2020 (December)

Crossing $20,000 for the first time

2021 (8thrd of January)

All-time High ($41,999)

Where

Online

Why

Investors get excited by its limited supply and its inflation-proof qualities.

Bitcoin users get excited by its decentralized nature and the fact that they can exchange assets without intermediaries.

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Blog Friends with Ben

Should I ride the rise of Peloton stocks?

Peloton (PTON:NASDAQ), a ‘stay-at-home stock’, has become quite the Wall Street darling since the introduction of pandemic-induced restrictions.

Despite releasing a controversial 2019 Christmas ad which the media labelled as sexist, Peloton made a great comeback in March 2020 – the very start of the COVID-19 crisis.

 

As a radical change of habits and mentality towards work, travel, socialising and, most importantly, fitness swept over, Peloton gained some serious stay-at-home momentum.

 

With gyms a no-go, and to an extent, the outdoors, home workouts became the next best thing to maintaining mental and physical health at such a challenging time.

 

From boutique fitness at home to global community

Peloton provides its customers with a wide range of products and services which, admittedly, are expensive to buy. However, Peloton’s offerings are still considered to be a good investment, and the company’s rapid subscription growth is a testament to how many people will agree.

However, one thing that’s particularly significant about Peloton is its focus on the community concept.

The company’s commercial aim is to enlarge, engage, support, inspire and empower the owners of its products and subscribers. Riders are encouraged to share and celebrate their own milestones (largely through ‘virtual high fives’), and trainers will congratulate them on reaching their targets.

By introducing a new fitness concept – connected fitness – the company has developed its identity by bringing the Peloton community to the forefront. However, it’s worth noting that the Peloton community is widely dubbed a ‘cult’ by spectators due to its many zealous fans.

Like many fitness brands, Peloton’s business model relies heavily on social media, with many of the instructors boasting large followings. Oh, and rumoured six-figure earnings. Per week.

Peloton verdict: Fitness Fad or Sound Investment?

Here’s a breakdown of Peloton’s year in numbers:

  • Peloton’s stocks soared 240% in 2020, boosted by the lockdowns and COVID-19 restrictions
  • Their growth is estimated at 115% for Q1 2021
  • Year-on-year quarterly revenue grew by 232.4%
  • Stocks are up 473% from its all-time-lows in March

However, it’s not all hunky-dory for Peloton. With hopes of economic recovery and the continued rollout of vaccine programs, the company has experienced a recent pullback.

 

Having said that, COVID-19 restrictions are still in place across much of the world, so the stock can and may continue to climb. In other words, as long as we’re working from home, we’ll be working out from home too.

 

Another consideration is that Peloton product owners have spent quite a lot of money to buy their product. In turn, it’s reasonable to expect that most will continue their subscription post-pandemic.

 

Then, of course, is the emergence of other major players in the market. Today, big names such as Lululemon and Apple Fitness+ are now Peloton competitors vying for their share too.

 

Peloton’s strategic deal with Beyoncé definitely didn’t hurt either, in which the pairing delivers custom digital content and pro-social initiatives. 

 

However, even a multiyear partnership with the queen of R&B doesn’t make Peloton immune to customer dissatisfaction. In particular, Peloton has left many customers angered by delivery delays, with some left waiting a month or more. 

 

The whole debacle could hold the company back significantly in its continued rise. If you’ll pardon the pun, Peloton will have to ‘work out’ how it will sort its supply chain and make amends if it wants to cement its leading position.

Peloton’s Five Ws

Who

Boutique fitness at home | Subscription product | Upper-class stock | Stay-at-home stock

What

Products & Services: Cardio app | Subscription to live video exercise | Video-enabled (spin) bikes and treads (treadmills) | Accessories

When

2012

The beginning – Peloton was founded as part of Kickstarter campaign

2019 (Sept)

Initial Public Offering (IPO price: $29)

2020 (March)

All time Low ($17.7)

2020 (October)

All time High ($139.75)

2020 (November)

First major test – 20% stock price fall

Where

An American company with subscribers all over the world

Why

Investors get excited by its recurring revenue model. Pelotoners get excited by bringing motivating and inspiring workouts at home.