What is a protective asset?

By 08/01/2021News
Morning Stock News

Gold  1908,05

EURUSD   1,226

DJIA  31120,50

OIL.WTI  51,055

DAX   13992,98

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.



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

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