We congratulate all the recipients of our newsletter on the upcoming New Year holidays. Today we abstract from the daily hustle and bustle and pay attention to what was happening in the markets during the year.
The main result of the outgoing year was the growth of all assets. Everything that could grow has grown. Stock markets, futures on comodities, gold, etc.
But the main beneficiary of the year was… who would you think? Bitcoin! The same cryptoactive that everyone had already had a chance to bury.
Chart of the Day BTC/USD
On the weekly chart above, you can see growth from the beginning to the middle of the year, and then fall. However, even after this fall, the price of the first cryptocurrency is still 120% above the beginning of the year.
Yes, for those of us who caught the price of $20,000 per 1 BTC, the current price of $7,300 seems low. However, the big players and funds look at the situation somewhat differently. They have little interest in what happened once. But it is as relevant as possible what kind of profitability the asset has shown this year.
Why? It’s as simple as that. Investors of the funds that have been invested in bitcoin since the beginning of the year have made very good profits. Investors of other funds are beginning to ask their managers questions… why didn’t you managers, since you are so smart and skillful, buy bitcoin? And did you not provide us with the same high return?
These are the questions that will make large funds very nervous in the coming year. After all, if Bitcoin grows significantly for the second year in a row (all the prerequisites for this have been created), then managers who once again ignored the first cryptocurrency may lose investors’ money.
Therefore, we conclude that the coming year will not only be interesting for Bitcoin, but also the year of a new information hype.
Despite the huge positive impact on the stock markets, gold has made a sharp jump up in the last days of December, rising again above the level of 1500 dollars. This is a powerful signal that gives us smart money with a scope for the next year as part of the ongoing easing of monetary policy around the world.
The American stock market has been growing for 10 consecutive years. This is extremely atypical by historical standards. We understand that this year’s growth was only possible due to one reason – the Fed’s lower interest rate. There are no objective reasons why the markets should grow also in 2020. But we all know that these same markets can be irrational for a very long time, so we remember that the trend is our friend and are not trying to play against it.
What’s waiting for us today?
00.30 Tokyo Japan Consumer Price Index December
10.00 Index of economic expectations of ZEW Switzerland December
17.00 U.S. weekly change in oil and petroleum product reserves
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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.