Crypto Gold Standard Claims Are Fading Fast | Nils Pratley

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The U.S.-focused financial market upheaval has at least made one point clear to us: bitcoin is not “digital gold” or a “store of value,” to mention two big claims made about cryptocurrency when its price rose. .

At $37,000, Tuesday’s late afternoon level, bitcoin has fallen 22% since early January and 45% since hitting an all-time high in early November. The crypto team may have convoluted explanations for this setback, but the simpler the better: bitcoin has always been primarily an instrument of pure speculation; when high-risk assets are no longer in vogue, they will be trashed.

On the contrary, Bitcoin behaves like an inflated proxy for the tech-heavy Nasdaq index in the United States, down 14% since the start of 2022. Thus, the parallel assertion about “uncorrelated returns” does not hold true. don’t stack either.

Meanwhile, real gold, a veritable store of value on the evidence of a few thousand years, did pretty much what it’s supposed to do during an inflation scare: it swung sideways to rise. slowly over the past few months.

None of this rules out the possibility that bitcoin will rally as risk-taking appetites recover. But, if that happens, please don’t listen to some rehash version of the thesis (pushed by a strategist at Goldman Sachs, oddly, only a few weeks ago) that bitcoin is competing with the gold in the “value market” and therefore could hit $100,000 if it gets a 50% share.

Come on, cryptocurrencies don’t play on the same playing field, asset-wise, as gold – and we doubt they ever will.

Unilever’s plan B must be fast and smart

It wasn’t Unilever’s plan B, which was probably just as well. Investors wouldn’t be impressed if the only response to the failed £50bn tilt of GlaxoSmithKline’s consumer products business was an organizational shake-up that would cut 1,500 top management positions worldwide. The “simplification” of Tuesday’s business model will have been planned for ages. Details of a major strategic overhaul, it is assumed, will come with next month’s annual results.

Arguably, however, the reshuffle should allow Unilever to reshape its portfolio slightly, which could be part of the boardroom thinking that survives the GSK mishap. Out comes Unilever’s “matrix” structure, a description of reporting lines organized into a hodgepodge of geographies and products. This results in a theoretically simpler division of responsibilities purely along product lines. So: beauty and wellness, personal care, home care, nutrition and ice cream.

The possibly important detail is the subdivision of foods between nutrients and ice cream. The latter, including Wall’s and Ben & Jerry’s, seems an obvious candidate for divestiture if chief executive Alan Jope still hopes to sell assets to fund beauty and wellness expansion.

It’s hard to quibble about the organizational reform since it roughly aligns Unilever with Procter & Gamble, a company that many shareholders wish their company was more like. Jope promises that the new arrangement will provide “fully clear responsibility for delivery”. The blame, however, ultimately ends on his desk, as he will know after about fifteen bruises. His real plan B must be clever.

Arm’s awkward struggle with reality

Tech-obsessed officials at the London Stock Exchange need to be vigilant. Nvidia, the US semiconductor chip giant, is preparing to drop its $40 billion takeover lawsuit from Arm Holdings, Bloomberg reported on Tuesday; and the UK company’s current owner, SoftBank of Japan, is reportedly lining up an IPO, or IPO, as an alternative.

Prior to the purchase of SoftBank in 2016, Arm was London’s strongest claim to seriousness in tech. A relisting would make room for an uplifting ‘coming home’ story for a company born in a barn outside Cambridge whose chip designs have become world leaders. It would be a shock if SoftBank pushed Arm to New York.

Mind you, an IPO anywhere would create a messaging headache for Arm chief executive Simon Segars. Here’s what he wrote last July in a blog post that furiously defended the benefits of Nvidia’s acquisition and tried to assuage regulatory and competition concerns that now look likely to kill the deal: “We considered an IPO but determined that the pressure to deliver revenue growth and long-term profitability in the short term would stifle our ability to invest, grow, act quickly and innovate.”

So, roll up your sleeves, who wants to buy stock in a company where the boss says independence is going to feel like suffocation? Annoying.

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