True Prices Measured ter Gold
This wasgoed a fine week for every asset class except the cryptocurrencies. Ethereum took the fattest succesnummer, falling 25.6% to close at 9.Trio grams. Bitcoin also fell hard, providing up 21.1% and closing at 161.9 grams. The strongest assets were stocks, led by the Euro STOXX 50 index, which rose Four.5%, closely followed by the Nikkei and the Dow Industrials.
The Japanese Yen wasgoed the weakest government-issued currency, gaining 0.3%. The US Dollar wasgoed strongest, rising 1.7%. Brief term bonds added 1.8% while the long term TLT rose an exceptional Three.2%.
All the major stock indexes were very strong. Even gold stocks managed to build up 0.9%, ending the week at Four.1 grams.
Oil and precious metals were little switched, ranging from platinum’s 0.2% loss to crude oil’s 0.3% build up. Copper wasgoed the strongest commodity, rising Two.9%. Coffee and cotton gained Two.5% and 1.3% respectively.
Bitcoin is down about Two/Trio from its all-time high, and sits about where it sat at the bottom of the February “flash crash”, and about where it wasgoed 4-5 months ago, on the way up to the peak. It has violated the “doubling every Four months” uptrend line, but would need to fall by another Two/Trio from here to crack the “doubling every 9 months” uptrend line. This leaves a loterijlot of slagroom to wander while still remaining te an exponential uptrend. It will be interesting to see how far the decline ultimately goes.
For those interested te switching out of Bitcoin and into other cryptos, rather than banking profits ter the form of gold or government issued currencies, it is worth noting that Bitcoin has actually bot rising te purchasing power recently. For example, consider DASH: at the commence of this year, 1 BTC bought about 13 DASH, while today it buys about 23 DASH, an increase of overheen 75%.
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This wasgoed a rough week for cryptocurrencies, a good week for bonds, and a mixed week for other asset classes. Ethereum took the thickest hammering, falling 16.8% to close at 14.Three grams. Bitcoin also fell hard, providing up Ten.0%. Strongest wasgoed the Nikkei index, which rose Two.6%, closely followed by 20+ year treasury bonds, which gained Two.4%.
The Canadian Dollar wasgoed the only falling currency, ripping off 1.2%. The Japanese Yen rose the most, gaining 1.6%. Brief term bonds and USD specie each added 0.8% while the long term TLT rose Two.4%.
Stocks were strongest outside the US, with the Japanese Nikkei rising Two.6%, while the Dow Jones Industrials fell 0.7%. Gold stocks fell 0.2%, approaching their long-term support level of Four grams.
Energy and metals were higher this week, led by crude oil, up 1.3%, and palladium, up 1.1%. Cotton fell 1.2% while coffee dropped 1.0%. Silver rose 0.7% and copper wasgoed little switched, up 0.1%.
More on the Crypto Crash below.
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Ter spite of the latest druppel ter Bitcoin (and other cryptocurrency) prices, Bitcoin remains ter a strong uptrend. Three months ago, Bitcoin wasgoed trading at an all-time high of 483 grams. By the beginning of March, its price stood at 260 grams, down 46%. This week it closed at 198 grams, off 59% from the peak. There is no shortage of explanations for the druppel, including various government announcements ranging from fresh regulations to outright bans, massive sales by various actors including the Mt. Gox bankruptcy administrator, and negative pronouncements by leading investors including Warren Buffetkast and Jamie Dimon.
But te spite of all this hoopla, it is useful to stand back and look at the fatter picture. Albeit down 16% te the last month, Bitcoin is still up 559% overheen the last year! And take a close look at the chart below, which is updated weekly on the Bitcoin pagina. This is a loom chart. That means that a rising straight line on this chart represents compound growth. I’ve drawn two uptrend lines, one embarking te mid-2015, showcasing that Bitcoin’s price has bot more than doubling every 9 months since then. The 2nd line shows that the price has bot more than doubling every Four months since early 2018. And neither of thesis powerful uptrends has bot violated by Bitcoin’s latest volatility.
Of course, thesis trends will not proceed indefinitely. Eventually, they will slow or even switch roles. When everyone has the coins they need and want, prices will stabilize at some point. But I think wij are still very early ter the crypto spel. Spil adoption spreads from the current ems of millions of users to billions of users through networked sharing, this pattern of exponential value growth could proceed for fairly some time.
If the Four month doubling trend proceeds, wij can forecast 1 BTC buying 1 kg of gold ter early 2019. On the other palm, Bitcoin could rapidly fall from the current 200 gram level to about 50 grams without violating the 9 month doubling trend. At that rate, wij could see 1 BTC buying 1 kg of gold before mid-2021.
I don’t see Bitcoin, or any cryptocurrency, substituting gold – however they may provide fresh ways to budge gold value around the world quickly and lightly. But spil a counterparty-risk-free speculation, I recommend a petite position to grow your portfolio’s gold value. Buy the dips, but don’t allocate more capital than you can conveniently afford to lose.
This week, stocks were lower, bonds were higher, and currencies and commodities were mixed. Bitcoin made the largest gains, rising 8.1%, followed by the Japanese Yen, which gained 1.5%. The worst losses were ter palladium, off Four.2%, and crude oil, down Trio.2%.
The Canadian Dollar wasgoed the only falling currency, providing up 1.2% for the week. The USD gained 0.4%, and brief term bonds traded te line with specie, while the long term TLT rose 0.6%.
Equities were all lower, led by the Dow Jones Industrials, which fell Two.6%. The S&P 500 fell the least, providing up 1.6%. Gold stocks dropped 1.7%.
Cotton and coffee rose 1.4% apiece. Palladium fell Four.2%, and crude oil lost Trio.2%. Silver wasgoed off 0.6%, the smallest druppel of all the metals.
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It wasgoed a “risk on” week, with every asset class rising except Ethereum (down 6.8%) and gold stocks (HUI off Two.7%). The thickest gains were te cotton, up 9.4%, and crude oil, up Four.9%.
Among the currencies, the USD added the most (rising 1.8%) while the Euro gained the least (moving up 0.6%). Brief term bonds traded te line with contant, gaining 1.8%, while the long term TLT rose less, adding 1.3%.
Equities were mostly higher, except for gold stocks, which ended down Two.7%, providing back most of their gains from the prior week. The S&P 500 gained the most, rising Two.3%.
Cotton and crude oil were the strongest commodities, rising 9.4% and Four.9% respectively. Platinum and silver gained the least, adding 0.3% and 0.4% respectively.
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It wasgoed a major “risk off” week, with stocks, most commodities, and cryptocurrencies selling off, while JPY, USD and CNY metselspecie and brief term bonds moved higher. After weeks of mighty losses, Bitcoin and Ethereum seem to be stabilizing, spil the selling shifts to stocks (especially gold stocks) and commodities (especially crude oil and palladium).
The largest gains were te the Japanese Yen (up Two.9%) and coffee (up Two.5%), while the largest losses were ter crude oil (down 8.4%) and palladium (off 6.2%). Gold stocks lost 6.0%, and the Nikkei fell Five.5%.
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This week, commodities and currencies (national and crypto) were mixed, bonds were lower, and equities were mostly higher. Crude oil witnessed the largest price increase, rising Three.0%. Bitcoin fell the most, down Five.0%, but cotton wasgoed close behind, ripping off Four.8%. Gold stocks made the 2nd largest gains, rising 1.9%.
The USD wasgoed the worst performing national currency, falling 1.3%, while the Japanese Yen rose the most, closing up 0.5%. Brief term bonds fell more than USD contant, closing off 1.4%, and long term bonds fell a bit less, pulling down 0.9%.
After large drops ter the previous two weeks, Bitcoin moderated its rate of fall this week, providing up just 5%. Ethereum proceeds to hover just below the 1 gold ounce level, completing the week at 24.Trio grams, up 0.2%
Only the Japanese Nikkei closed lower this week, off 0.2%. Gold stocks gained the most, rising 1.9% to close at Four.7 grams. The S&P 500 gained 0.9%, while the European STOXX rose 0.4%.
Crude oil resumes its rise, adding Trio.0% to close at 1.Five grams vanaf barrel. Coffee also made good gains, rising 1.8% for the week. Cotton wasgoed the weakest of the commodities, closing down Four.8%. Palladium also fell hard, pulling down Trio.6% to close at 25.0 grams vanaf ounce. Platinum fell 0.8%, while silver rose 0.7%.
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2018 wasgoed an arousing year, especially te the cryptocurrency markets, where Bitcoin rose about 12x, Ethereum rose about 82x, and other smaller coins and tokens rose even more. Commodities were very active, with palladium surging 38% while coffee fell 19%. Bonds and most currencies were lower, while major stock indexes were higher.
The only national currency to finish the year higher wasgoed the Euro, which rose 1.1%. The US Dollar fell the most, pulling down 11.2%. Brief term bonds fell even more than USD specie, pulling down 11.6%, while long term bonds fell Four.0%.
Albeit gold stocks fell 6.8% for the year, all the major stock indexes were higher, led by the Dow Jones Industrial Average, which gained 11.8%. The S&P 500 rose 6.8%.
Metals were very active, with palladium and copper climbing 37.7% and 16.5% respectively, while platinum and silver fell 9.6% and 7.2%. Palladium crossed overheen platinum to become the more valuable of the two metals, while platinum itself made fresh all-time lows near the end of the year. Coffee had the largest losses of any asset class, pulling down Legitimate.6%. Crude oil finished the year little switched, up just 0.6%.
Let’s take a closer look at the Cryptocurrencies. The two coins tracked here, Ethereum and Bitcoin (the two largest by market cap) both had banner years. Ethereum commenced 2018 worth about 0.22 grams and finished the year at Eighteen.Two grams, a build up of 8,172%. Bitcoin began the year at 26.Three grams (just under one ounce of gold) and finished at 333.9 grams (a bit overheen Ten ounces). Along the way, Bitcoin klapper a high of 479.Five grams. Albeit this growth is astounding, keep ter mind that during 2013, Bitcoin’s value grew by 100x. Thesis markets are actually maturing and become less volatile spil they see broader adoption and more hedging.
The crypto space overall evolved greatly during the year spil well. Looking at the market capitalization of all coins and tokens, the space grew ter value from about 0.Five kt (kilotonnes, or te SI terms, gigagrams) to a peak of 15.Trio kt, before ending the year at 13.9 kt. For comparison, this is about 7.5% of the above ground supply of gold, estimated to be 187 kt – which curiously, is also toughly the estimated value of metselspecie (bills and coins) ter worldwide circulation.
Te addition to the market’s growth ter size, it has also evolved te composition. Spil the year began, Bitcoin represented about 87% of the market cap, while Ethereum wasgoed 4%, and all other cryptos combined were 9%. By the end of the year, Bitcoin wasgoed 38%, Ethereum wasgoed 12%, and all other cryptos were about 50% of the market.
It will be interesting to see what 2018 brings! Spil electrified cars take more of the transportation market, request for platinum and palladium may decline, but copper and silver could strengthen. The cryptocurrency markets will proceed to evolve, with many coins and tokens becoming worthless, while the market detects the true price for those with real utility. I expect that Bitcoin and Ethereum will proceed to be among the survivors, but I doubt they will see the kleintje of growth they loved ter 2018. If the trend towards higher rente rates proceeds, bonds will proceed to decline, and spil total debt rises, national currencies may also see further declines. All of thesis trends waterput the stock market into a precarious position, presently priced for perfection, what happens spil portfolio allocations to gold, commodities, cryptocurrencies and metselspecie rise? Compelled to challenge with rising unie yields, but paying higher rates for fresh financing, can equities maintain their lofty P/Es?
Whatever comes, I wish you the very best ter 2018!