Reading time: ~2 m
While 2022 can not be called favorable for stocks and cryptocurrencies, since losses are observed in all directions. Bitcoin lost 37% of its value, despite the fact that six months ago it reached an all-time high. A similar trend is shown by the S&P 500, which has fallen by about 17% since the beginning of the year.
However, some analysts say that not all assets will continue to fall until the end of the year. Bloomberg Intelligence Senior Commodities Strategist Mike McGlone shared his opinion on Twitter:
If stocks fall, then the second half of the year may remain behind bitcoin, gold and bonds, and the ability of bitcoin to surpass most risky assets, gold and commodities may play out in the second half of the year, especially if the stock market continues to succumb to the pressure of the Federal Reserve System.
Overall, market watchers are divided on whether the Federal Reserve will act proactively and quickly. The Nasdaq index has fallen by 28% since the beginning of the year, while rising rates have negatively affected most stocks of technology companies.
For the Fed to curb inflation, it will likely have to raise rates again, which in turn will mean more volatility in the stock market in the short term, McGlone added.
The other two major asset classes react differently to rising rates. Cryptocurrency has fallen this year, despite the fact that it was advertised as a cure for all the ills that can cover the market, such as rising interest rates, inflation and lack of purchasing power.
The fall of bitcoin began in November, when the Fed first announced a rate hike, and market participants realized that liquidity could be a problem. However, analysts believe that more active adoption by institutional and retail active traders will lead to the fact that the cryptocurrency will end the year on a positive note.
As for commodities, this year has so far been stable, and some of them, such as oil, wheat and nickel, have reached record highs.
As geopolitical tensions persist, prices are likely to remain high until the conflict is resolved and there is some normalization in European markets.
Generally speaking, interest rates in 2022 are likely to continue to rise further, and how high they will rise is a million-dollar question. Given solid earnings in the U.S. corporate sector and solid fundamentals for some companies, the current moment may be suitable for purchasing shares at favorable prices.
On the other hand, if prices continue to fall rapidly, then perhaps the minds of investors will help to calm the saying of Warren Buffett, which sounds like this: “Opportunities do not appear often. When it rains of gold, put a bucket instead of a thimble.”
#year #bitcoin #surpass #risky #assets