What is a protective asset?

Morning Stock News

Gold  1908,05
(+5,36%)

EURUSD   1,226
(-0,04%)

DJIA  31120,50
(+4,26%)

OIL.WTI  51,055
(+17,45%)

DAX   13992,98
(+5,63%)

The occupation of the US Congress building in Washington by demonstrators will long be discussed by politicians and analysed by historians. We will look at the situation through the eyes of traders. And we will ask a logical question. Which assets will go up in value if anarchy sets in? Why are we comparing this situation to anarchy? Just for the record, the last time the US Congress was invaded was over 200 years ago, during the Anglo-American War.


BTC

BTC

For example, stocks of arms manufacturers traded on the Nyse are up 15-20% at the moment.
We are used to the fact that whenever there is any financial, political or economic crisis, investors immediately run to protective assets. First and foremost the Japanese Yen and the Swiss Franc. Were they up Tuesday night? No, they did not. The defensive asset is the U.S. dollar, but it is down altogether.
Our attentive subscriber, who has not been following what has been happening in the market, will tell you that gold must have risen sharply. Indeed, it did go up momentarily, but only by 1.5%-2%, and by the end of the trading session it had fallen altogether.


How is that possible?

This is the new reality we have been writing about since the second half of 2020. The only asset that rose sharply was bitcoin. On the news of the storming of the US Congress, it fell for 5-10 minutes and then rocketed upwards. At the same time, it did not stop rising at all during the next 24 hours, showing a momentum of +15% over the past 24 hours.
It is bitcoin that becomes the world’s top asset in 2021. When the excitement dies down, we will definitely revisit what happened on Tuesday night. And let’s speculate as to why investors, especially US investors, rushed to buy bitcoin.

07.45 Swiss unemployment rate for December
08.00 Industrial production in Germany for November
14.30 Canada Unemployment Rate 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.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.