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The oil companies’ hopes for a recovery in demand will not come true. And now let’s talk about what will kill at least 50% of oil companies in the next 10 years.

OIL. WTI

The last nail in the coffin lid will be electric cars. In 2020, all car dealers have sharply reduced sales of new cars. But at Tesla, they have grown. And the company, which until recently was considered bankrupt, has simply blossomed.
However, it is worth looking a little deeper into the situation. For example, the same Volkswagen and Mercedes, against the backdrop of falling sales, this year they sold twice as many electric cars as they did last year. This shows that buyers are not just paying attention to a particular manufacturer (Tesla), but are completely changing their behaviour.
And if other customers are not going to change this model, they will be successfully helped. For example, in the UK, a ban on the sale of cars with a gasoline engine is planned from 2035. Many megacities, due to the environmental situation, will come to this decision even earlier.
The prospects for the oil industry are even more dim when you think about the following. The same company, Tesla, is successfully developing electric trucks, with a huge portfolio of pre-orders. It is the trucks, which work from morning to evening, that consume a huge amount of diesel fuel.
The only reason the majority of the world’s inhabitants have not yet given up on petrol cars is the high price of electric analogues. But this price is decreasing every year. Which is logical. The higher the production volume, the lower the cost.
Let’s imagine that after a few years, the price of a new gasoline and a similar electric car will be the same. What will be the proportion of purchases of the first and second? 50/50? This answer can be given by a person who has never owned a car. The proportion will be 95 by 5 in favour of electric cars. Why? At least because the absence of a petrol engine under the bonnet, as well as the fuel system, makes maintenance much cheaper and generally removes the problem of potentially extremely expensive repair or replacement of the engine.

What awaits us today?

03.00 Trade balance in China for November
08.00 Industrial production in Germany for October
16.00 Ivey Business Activity Index in Canada for November

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.

While the representatives of OPEC+ countries are holding the final agreements for the upcoming meeting (we recently talked about the nuances and disagreements among member countries), let’s look at the oil market globally.

OIL.WTI

Let us make the following assumption, which will be displeased by so many supporters of black gold. It is possible that the previous year, 2019, showed the maximum historical volume of demand for oil. We will never see this level again. In other words, the demand for oil will be declining.

How is this even possible?

In 2020, demand for oil collapsed in all regions of the world without exception. Black gold producers do not expect demand to recover in 2021. On the other hand, they have high hopes for 2022. On the one hand, there are plans to end the COVID-19 pandemic due to widespread vaccination. On the other hand, it is expected that the deferred demand for a number of services, currently limited due to coronavirus, will increase sharply. For example, travel, business conferences, etc.
But are the oil producers right? We do not think so. Nobody knows if the epidemic will really be halted in 2022 or if its impact on our lives will only decrease. Even in developed countries, up to 30%-40% of the population does not plan to be vaccinated. And in those same countries in Africa, the majority of the population will not have access to vaccine because of problems with the local health system.
Will the demand for travel regain? Partly yes, but not completely, for one trivial reason. The severe economic crisis will not return middle-class income to its previous level of consumption for several more years. Namely, the middle class was the main engine in the tourism industry.
Well, with conferences in general, everything is sad. Large corporations with the funds to hold them were surprised to find that there was no need to gather hundreds and thousands of employees from dozens of countries in Bangkok or London. Everything can be perfectly organised in an online format. And medium-sized companies simply will not have a budget for such events in the near future.

What awaits us today?

01.30 Retail sales in Australia for October
14.30 Number of new jobs in non-US agricultural sector for November
14.30 US unemployment rate for November
14.30 Change in the number of employees in Canada for November
14.30 Unemployment rate in Canada for November

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.

The US Federal Reserve has printed several trillion dollars since spring. In doing so, its representatives reassure the public. According to them, annual inflation will not exceed 2-3% per annum for a long time. However, a completely different inflation risk has crept up on the US dollar.

EUR/USD

What are we talking about? The US dollar has already fallen by almost 10% over the last half of the year against the basket of the major world currencies included in the DXY Index. And this fall is almost invisible. Except that the other day, the level of 1.20 was broken through in the euro/dollar pair.
However, many experts believe this is just the beginning and predict that the US dollar will fall by another 20% against the basket of currencies over the next year. Everyone knows how badly the dollar has already fallen against gold.

What does this mean?

Indeed, American citizens may not yet be too worried about rising consumer prices. The world is experiencing the worst crisis. During a crisis, prices do not go up. Let’s imagine a medium-scale production or a service company. Demand has fallen so much, even at current prices. Naturally, increase in prices is out of the question until the situation with the coronavirus is over.
But all assets issued in dollars, such as the same real estate, can fall sharply in price against other currencies.
Does this scare the American government? No, it’s not frightening. What is more, the cheaper dollar is leading to increased exports of American companies. The cheaper dollar also helps to finance the government budget, which has a huge deficit.
An additional factor contributing to the fall of the US dollar was the fact that Joe Biden won the US presidential election. As we know, Democrats welcome additional expenditure from the budget. This means that money will continue to be printed, perhaps even in greater numbers than under the outgoing White House administration.
So what should American investors do? It is fair that they go into stocks, gold and cryptocurrencies, getting rid of the depreciation of the US dollar by all means.

What awaits us today?

01.30 Australian Trade Balance for October
11.00 EU retail sales for October
14.00 ISM Business Activity Index in the US Service Sector for November

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.

And on Monday, Bitcoin rewrote the historical maximum on most major cryptocurrency exchanges reached 3 years ago. And on Tuesday it rose even slightly higher. As you know, when any asset reaches new heights, its growth potential becomes absolutely unpredictable.

BTC

Let’s consider this on the example of shares. Let’s say there is a company called ZZZ. It conducted an IPO with a placement price of $20. Then the share went up and down for several years, forming a minimum of $15 and a maximum of $35. At some point, the action ZZZ breaks through its historical maximum of 35$.
What’s next? Nobody knows this. It can grow by tens and hundreds more times, the potential depends only on the future development of the company. At the same time, even if the ZZZ share soon halves, the risk/profit ratio is simply going to be positive.
This is exactly what is happening today with Bitcoin right before our eyes. Yes, there is a possibility of correction to the level of $15,000. And even a small risk of falling to $10,000. But what if the BTC grows by another $50,000 to $100,000? In this case, we consider the risk/profit ratio to be 5-10 thousand dollars to 50-100 thousand dollars. The main thing to understand is that we are talking about the ‘bought and forgotten’ investment idea for the next 2-10 years.

What awaits us today?

01.30 Australian GDP for Q3
09.00 Retail sales in Germany for October
14.15 ADP US Employment Report for November

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.

We recently discussed why gold is falling from a fundamental point of view. On Friday, there was a major event according to the theory of technical analysis. A 200-day simple moving average was broken through.

Gold

A simple 200-day moving average shows whether the price is higher or lower now than it was 200 days ago. It is generally accepted by consensus that this indicator represents a long-term trend. If the price is above 200 SMA (Simple Moving Average), it means that the market has a long-term bullish trend. If the price is below the SMA, the trend becomes bearish.
From the technical analysis (TA) perspective, there is still an important point. Often the price only touches the SMA and bounces back. Traders in TA therefore make sure that the daylight candle does not just cross the moving average, but closes above or below it. This is what happened at the trades on Friday.
The more conservative supporters of TA are also waiting for 2 confirmation. That is, they want to make sure that the daylight candle on Monday will also be closed below 200 SMA. If this happens, it will be a 100% strongest bearish signal for them.
Many of our subscribers will say that technical analysis is nonsense and they do not use it personally in their decisions. But, in this case, they will be only partly right.
Why? The fact is that the 200 SMA indicator is specifically monitored by all major market players. In many funds, the rules prohibit opening new long positions if the price falls below 200 SMA. And other funds are aware of this. This means that the pessimism in the gold metal market is starting to rise sharply.

Why does gold fall?

There is only one reason for this. Traditionally, gold metal is bought when there is tension in the world. The COVID-19 pandemic has brought enormous tension. Now everybody is simply over-optimistic about the good news about several vaccines coming to the market at once. This means that the demand for gold, as a protective asset, has fallen sharply.
But there is one more catch! The fact is that gold is also growing in cases where central banks are printing money. So far, there is no reason to think that the printing press will stop. That means that at any point in time when the majority of the players in the market reach this fact (that having a vaccine will not stop printing new money), the trend can turn up again, going to new highs.

What awaits us today?

02.00 China Business Activity Index for Services in November
11.30 Statement by ECB Head C. Lagarde
14.00 Germany consumer price index for November
15.45 Chicago PMI Index in the USA for November

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.

27.11.2020 – Special Report. Oops, I did it again – just like 2017, Bitcoin rushes away first, only to crash. This may have created an extremely bearish double top. Let’s wait and see. But what was going on here? China was actually behind it. But the US Federal Reserve is apparently also sharpening its knives. We shed light on the background – and warn again that the masters of money will sooner or later eliminate e-foreign currencies.

Bloody nose for BTC bulls

That’s the way to do it: At first Bitcoin could hardly run with all its strength – and began a brilliant race to catch up from the Corona lows to reach the summit. On Wednesday, a Bitcoin still cost a good $19,500 – the highest price in three years. And then the bitter minus. But why?

The Fomo effect

The resetting of the course repeats a familiar pattern – because it is by no means the first time that the course rises rapidly and then collapses. “This means that a financial bubble regularly forms in cryptocurrencies, it bursts, then a new bubble forms”. And then the paper quotes Brian Kelly, founder and CEO of BKCM LLC, an investment firm specialising in e-foreign currencies. “Many investors are driven by the fear that they might miss something. They call this the fomo effect, which is the abbreviation for the English term (“the fear of missing out”).” It’s all psychology

Family Offices and Paypal

Two developments have driven the price for crypto currencies in particular: On the one hand, professional investors are increasingly entering the market. Due to the low interest rates, pension funds and family offices, which invest the money of wealthy families, have also been buying. On the other hand, according to the “Tagesspiegel”, the US payment service provider Paypal pushed the trade in crypto currencies, as customers in the USA have recently been able to buy and sell Bitcoin, Bitcoin Cash, Ether and Litecoin via their Paypal account. We see it the same way.

Higher margin costs

But that does not explain the short-term sell-off. The psychological bubble explanation is too meagre for us. CoinTelegraph.com also let Kelly have her say. He referred to the recent sharp increase in demand in the cryptocurrency market – which has completely dried up supply. In other words, buyers would have been disappointed and withdrawn. Furthermore, the cost of the loan would have increased and in the end, small investors would have been holding the hot potato: “The last one is that we are starting to see retail come into this market and you’re starting to see the interest rates that it charges on margin going much higher.

Cash register at the top

Apparently, big addresses have also made it to the top cash register. William Suberg of CoinTelegraph pointed out that investors had sold high volumes of BTC on the various stock exchanges just under $20,000. “All Exchanges Inflow Mean increased a few hours ago. It indicates that whales, relatively speaking, deposited $BTC to exchanges,” Ki Young Ju from the analysis company CryptoQuant assisted on Twitter. By the way, he believes that BTC will crack the 20K in the next few days.

Heavy outflows from China via OKEX

And then Ki Young Ju pointed out exactly the factor we had recently warned of at this point: China was behind the crash. You remember: in October, the People’s Bank of China (PBOC) banned the private issuance of digital currencies. And the OKEX exchange, which is registered in Malta, was closed without further ado. Ki Young Ju pointed out that OKEX now allowed withdrawals again. With severe consequences: “BTC flows from OKEx to all other exchanges hit 493 BTC at that time,” he reported on Twitter. And further: “83% of total outflows went to non-exchange wallets like custody. So BTC disappeared from the market in private pockets. So it looks as if frightened investors in the Middle Kingdom were quick to cash in before the communists froze trading again.

Rumours about US regulation

This was accompanied by similar rumours from America, as reported by Brian Armstrong, CEO of Coinbase. According to these rumours, the USA is planning to regulate so-called “self-hosted cryptocurrency wallets”, i.e. software programmes that serve as small banks. Armstrong commented: “If this crypto regulation comes out, it would be a terrible legacy and have long standing negative impacts for the U.S. In the early days of the internet there were people who called for it to be regulated like the phone companies. Thank goodness they didn’t.”

Thanksgiving dries up demand

In conclusion, it should be noted that trade in the USA was already largely dormant before Thanksgiving and that this demand therefore fell away – many Americans traditionally make their way to their families in advance.
Our conclusion: The Vola at the Cryptos should remain with us – you must be careful. We have repeatedly pointed out that the world’s central banks will not accept an uncontrollable reserve currency. So keep an eye on news of this kind. The Bernstein Bank wishes successful trades and investments!

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.

The red candle in the graphic below speaks for itself. It’s a terrible day for bulls if they use their leverage. And if they did, they could zero out their account. The main question that our subscribers are now concerned about is: “What is it? A simple correction or change of trend”?

BTC

On Tuesday and Wednesday, the price of the first cryptocurrency rose to $1,900. It seemed a little more, a little more and will break through the absolute maximum of $20,000. In anticipation of this event, a huge number of buying positions with leverage were opened in the market.
What happens when everyone is waiting for the same event? That’s right. This event is most likely not happening. It happened on Thursday as well. The evil market couldn’t just let everyone make money. What’s more, it was very easy to take money away from bulls. That’s what was done.
When it fell below $18,000, many averaged, then it happened again below $17,500, then it happened again below $17,000. Further downwards the movement was already at the closing of the stops and margin calls. When there was no one else to sell the bitcoin, the price was bouncing upwards by more than $1,000 at the moment.
The most important thing was to understand who was buying the huge amount of bitcoins that were sold. Most likely, they were institutional investors who took the situation as a gift from heaven. When the market is growing rapidly for several weeks in a row, it is very difficult to buy a large volume of BTCs. But this is a great thing to do at a sharp drop. And the entry price is much better than in the last 10 days, when the market simply exploded with purchases made by various funds, public companies for their clients.
If we are right in the analysis above (and we do not know it yet), the level of $20,000 will be taken quickly enough, only in longs instead of part of the public, there will be other ‘smart money’.

What awaits us today?

11.00 EU consumer confidence level for November
11.00 EU business climate indicator for November

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.

Only a couple of days ago we drew the attention of our subscribers to the fact that oil is ready for a sharp movement. And this movement has already happened. Moreover, Brent oil is rapidly approaching $50 per barrel. Its breakthrough can further accelerate the upward momentum.

WTI

The price cannot stand in the range forever, which lasted for six months. Finally, the corridor is broken through upwards. Black gold is rising in price amid growing optimism that the recent breakthrough with the Covid-19 vaccine will lead to a rapid recovery in global energy demand as early as next year.

What is the problem then?

The problem is that all this could be a huge bull trap. Nowadays, oil purchases by speculators are based on emotions. As you know, most of the time speculators are wrong. And the market punishes them over and over again. The very strong punishment will be not just to return the price of oil to the previous range, but to break through its lower limit, with a further drop to $30 per barrel.
What are the prerequisites for this? Actually, there are a lot of them, here are just a few:
– Continued growth of oil product inventories in the USA
– The global economies are slowing down due to the coronavirus pandemic right now, which is dramatically reducing demand for oil.
– Absolute uncertainty in connection with the next OPEC meeting
– Risks to the oil price in the face of potential sanctions lifting from Iran
– And of course, an increase in oil supplies in excess of agreed quotas by OPEC+ countries, amid growing problems with their budgets.
If 2-3 points from the list above coincide at the beginning of 2021, the price of oil will drop significantly. And if 4-5 coincide, it will be the ‘perfect storm’ for the black gold market.

What awaits us today?

08.00 Consumer confidence index from Gfk in Germany for December
13.30 Report of the ECB Monetary Policy Meeting

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.

25.11.2020 – Special Report. Bitcoin scratches the old record of almost 20,000 dollars. Many market observers expect the e-foreign currency to make a breakthrough – and indeed there are good reasons for this. If it were not for an important warning signal from China, which has so far been lost in the media mainstream. We will shed some light on the background.

Up, up and away

The tension is rising. “Börse Online” judged: “Before the all-time high, there is now hardly any resistance on the charts. The probability is very high that the all-time high will be reached before the end of the year. The old coins have initially lagged far behind. There could be catch-up effects here, especially for Ethereum, Litecoin and Bitcoin Cash, which will soon be offered for trading by PayPal in addition to Bitcoin In Brief”.

Masses of paper money

There are plenty of reasons to buy e-foreign currency, even in the light of current monetary policy. The World Resources Institute pointed to the trillions that would be printed worldwide for stimuli in response to corona – in the USA, Europe, Japan and other major economies. Quantitative easing has reached undreamt-of dimensions. “For the first time U.S. debt is now about equal to GDP (Gross Domestic Product), like the sound barrier we once thought if we hit it we might explode. In fact, the Federal Reserve’s balance sheet has inflated to a record level of around $7.2 trillion. This does not bode well for the world’s currencies – many investors fear a gutting.

BTC beats gold

Against this background, many investors are betting on e-foreign currencies – and are giving gold, the usual store of value, the cold shoulder. Analyst Jim Reid of Deutsche Bank noted a rotation of gold into BTC: “there also seems to be an increasing demand to use Bitcoin where gold is used to be used to hedge dollar risk, inflation and other things. In fact, JPMorgan reported a record open interest in Bitcoin futures of nearly $800 million.

At the same time, the Bank of America registered the largest weekly outflow from gold funds ever, at $5 billion.

Expert sees BTC at $318,000

Bitcoin therefore becomes socially acceptable. The price expectations are correspondingly euphoric: “Today bitcoin has gotten to a place where institutional investors, banks, and family offices are legitimately pondering involvement as a defence against currency devaluation,” was the recent not entirely unselfish judgement of Alex Mashinsky, CEO of Celsius Network, the financial services provider specialising in BTC. And further: “This isn’t a gold rush anymore, it’s a good investment. BTC will climb to 30,000 dollars by the end of the year.
Tom Fitzpatrick, Managing Director at Citibank, took the cake. In an information to institutional clients, he predicted that BTC would cost more than $318,000 next year. In view of the uncertain economic situation, he said, there were similarities with the gold market in the 1970s.

A warning signal from China

Last but not least, a little-noticed but nevertheless important fact remains as a dissenting vote: China is intensifying the fight against Bitcoin. In October, the People’s Bank of China (PBOC) banned the private issue of digital currencies. As a result, the Malta-registered stock exchange OKEX had to block withdrawals of cryptos for a month because the company had to provide information to the Chinese authorities. The background: the Chinese central bank is preparing to launch its own digital currency.
As a result, Reuters recently reported that asset managers are looking to expand outside the People’s Republic and are looking for clients in Hong Kong and Singapore. Babel Finance, a financial services provider specialising in Cryptos, has applied for a licence for asset management in the former British Crown Colony. The company intends to raise around 1 trillion dollars in capital. Gordon Chen, former Bitcoin trader in Beijing, recently founded the company GMR in Singapore, as trading with digital currencies is increasingly regulated in China.
As we have often written at this point: China is only the forerunner; the world’s governments will not tolerate an uncontrollable secondary currency. They will use state-controlled e-currencies to eliminate competitors, to eliminate corruption, black money and tax evasion – and to retain power over monetary policy. Although it will be technically difficult to enforce this completely, sooner or later the blockade will come. We will keep an eye on the matter for you – and wish you successful trades and investments!

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.

Approximately 3 weeks ago we drew the attention of our subscribers to a correlation violation. The price of Bitcoin was disconnected from the S&P 500 index and gold. However, the situation has changed even more during this time.

Bitcoin

Now there is not just a split of gold and Bitcoin, but their opposite correlation. That is, the growth of one asset (bitcoin) is accompanied by the fall of another (gold). We have been observing this trend throughout November. Tuesday was the apogee of this process.
At the moment the price of the first cryptocurrency rises by 1000$, from 18300$ to 19300$. Against the same backdrop, gold falls by 40$, breaking through the level of 1800$ per troy ounce. By the way, a couple of days ago we also drew our subscribers’ attention to the risk of breaking through strong horizontal support for gold.

What does it mean?

No final conclusions can be drawn on events of just one month. But we will risk making a terrible assumption for which the “golden bulls” will want to lynch us. Gold and Bitcoin switched places at the end of 2020 as an asset protecting money against inflation. And this may be one of the strongest changes in the 21st century.
Yes, we understand that it sounds pathos. But events are very similar to what happened about 100 years ago, and it was the same titanic change in the early 20th century.
What assets are we talking about? Coal and oil. If, at the beginning of the 20th century, someone had expressed the stinking idea that no one was going to need coal soon, it would have been laughed at. Absolutely everything worked on coal. At that point in time, almost no one needed oil. At one point, however, everything suddenly changed. For example, today, who needs coal and why do they need it? It is used as a fuel for cogeneration plants and for steel production. Oil took the rest of the market share.
The same thing may have happened with gold and bitcoin. If this is the case, we will see a huge flow of assets in the coming years. After all, the capitalisation of gold today is about $7 trillion, and the BTC 350 million or 20 times less.

What awaits us today?

14.30 Initial claim for unemployment benefit in the USA
14.30 GDP data for Q3 in the USA
14.30 Durable Goods Orders for October in the USA
20.00 Minutes of the US Federal Reserve Meeting

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.