Bitcoin fever is drawing investors into the stock market, Laszlo Birinyi says: The stock market may be catching a bit of crypto fever.
“Bitcoin has woken up a lot of people,” said Laszlo Birinyi, the stock guru and founder of Birinyi Associates.
The cryptocurrency phenomena have more investors watching screens, where they track bitcoin but also the stock market’s daily rise to new highs.
“Bitcoin is a catalyst for a lot of interest. It’s everybody. It’s also giving the guy on the trading desk, sitting at a hedge fund, a shot in the arm,” he told CNBC in a phone interview.
Birinyi said more of the cash that’s been sitting on the sidelines is making its way back into stocks. “All of a sudden more and more people are aware there’s a market going on, the stock market and there’s a way to make money,” he said.
Birinyi has said the cryptocurrency appears to be in a bubble.
While he would not invest in it, he has traded it, including Monday as the CME launched its bitcoin futures. “I made $3,000 in an hour,” he said.
“This is not investment money.
This is the money you would spend on that new driver for your golf bag.”
He said he sold bitcoin later in the day at a price $200 above where he bought it. Bitcoin has risen rapidly from under $5,000 in early October to just above $18,000 Tuesday.
While the bitcoin chart does have the look of bubble in the making, many investors believe it has a long way to go.
“What I was trading was the fact there was an event. Futures were going to happen, which meant there was a focus on the area,” he said.
As for stocks, Birinyi set a target of 2,700 for the S&P 500 for the middle of the first quarter, but it has neared that level already and he will make a new call once it closes above there.
Birinyi said the stock market has also been helped by the fact it is front-page news, along with bitcoin.
Stocks had been making new highs earlier in the year, but the market was not getting the attention it is getting now from the media.