Gold 1885,41
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EURUSD 1,2223
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DJIA 30250,50
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OIL.WTI 48,045
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DAX 13596,065
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This is our last newsletter of the year. And it won’t be quite the usual one. Let’s try to imagine what traders and investors can look forward to in the coming year, 2021.
1.Bitcoin is becoming a new investment asset that the world recognises. After crossing the $50,000 per BTC mark, the capitalisation of the first cryptocurrency will reach $1 trillion. And no one else will be able to ignore it.
We assume that many nations around the world, especially the U.S., will try to strike one last blow to shake bitcoin. If it fails, there is nothing anyone can do about the asset.
2.Gold will finally lose out in the eyes of young investors, to BTC. Why exactly “young”? People who are now 60-80 years old and who own most of the capital in the world, it is very difficult to make them change the values on which their lives were built. But the young do not have such a long historical memory and decidedly don’t understand why gold, which is totally losing out to BTC in many ways, is needed at all.
Yes, gold will still be 5-10 times the capitalization of BTC during the year. However, the dynamics of money flowing from one asset to another, will only increase.
3.Oil. The world will deal with the COVID-19 pandemic in the second half of 2021. Against this backdrop, the price of 1 barrel of WTI could even reach $60 at a moment’s notice. However, demand will not be fully recovered in any case. But the shale companies will once again sell a huge amount of futures for a year ahead. Then they will unseal some wells and fill the market with oil that has already been sold, lowering its price again.
4. the US stock market. There is no reason to expect anything to change in 2021 compared to the current year. The only difference will be lower volatility. Unless there are new global cataclysms, US equities will slowly rise. As zero interest rates will remain unchanged and the world’s leading central banks will continue to print money.
5. the US dollar. We lack consensus on this issue. The US dollar is capable of bringing surprises. At the end of the year it could either rise sharply or fall sharply against a basket of the world’s leading currencies.
A lot will depend on the new US President Joe Biden. If he completely focuses on the problems that exist in America today, increasing aid to the economy due to the pandemic, we will see a decline of the dollar. If he instead focuses on the “outside world” which Donald Trump refused to do, we could see a strengthening of the dollar.
Either way, the coming year will be very interesting.
Important Notes on This Publication:
The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.