The markets always give surprises, that characteristic of being unpredictable is what excites many, it generates opportunities and also financial disasters.
At the beginning of 2023, nobody was betting on an ounce of gold or bitcoin to be one of the most profitable options in the financial markets, today the reality is different.
But the movements in the markets are not accidental or capricious either, these two investment instruments want to tell us something with their unexpected rebound this year.
golden surprise crypto
As of Thursday, gold was trading above $2,060 per ounce, heading for $2,100, consolidating at its best moment since March 2022. Analysts consider that the current level is fully bullish, firstly due to demand for the metal from expectations of price growth (inflation), then because of the banking crisis that triggered a wave of hedging and now because of the almost inevitable possibility that the US economy will enter a recession, for some this recession could be longer and deeper than expected. expected because the crisis in the banking sector will impact confidence in the economy.
The ounce of gold accumulates so far this year a yield of 12.85 percentstarted the year around 1,826 dollars per ounce and now stands at 2,061 units.
Is there a demand for gold because it was once again considered a classic hedging tool? Some consider it so; this bull run is about to enter unknown territory as, beyond $2,100, there is no record of its performance. According to other analystsIf we look at what the price of an ounce of gold has done since 2018, what we actually see is a “bullish supercycle” in an ounce of gold and that unimaginable prices can be seen today if the conditions of the global economy continue to show uncertainty. Those who bet on the push of gold beyond $2,100 per ounce, consider that, although the instrument took time, at the end of the day, its historical role as an inflationary hedging instrument was imposed and uncertain times.
The most curious thing is that, according to market figures, most of the large holders of physical ounces of gold are the large central banks, especially those of China and the United States, although institutions such as the Bank for International Settlements (BIS) also participate. ), the European Central Bank (ECB) and the International Monetary Fund (IMF). This, for some experts, is irrefutable proof of the high liquidity of this reserve instrument, as well as the role that this asset plays in times of financial crises and economic emergencies.
In extreme cases, gold can, for example, be used to finance liquidity support or interventions in foreign exchange markets; It hasn’t happened in a long time but it’s not impossible, especially in these times when anything can happen.
But if the ounce of gold is a surprise for investors and financial markets, what has happened this year with bitcoin is much more relevant due to the magnitude of the advance that this asset reflects.
The most representative cryptocurrency in the market reflects until Thursday night in the global markets a rebound of 86.35 percent so far this yearconsolidating already above 30 thousand dollars for each bitcoin, over 30,785 dollars.
What has caused this spectacular rally in cryptocurrency? For some experts, there are several factors that can explain this upturn in the market, unexpected by almost everyone.
But to understand what has happened in this market, it is necessary to remember that just last November the price of bitcoin was placed for a moment around 15 thousand 500 dollarswhich means that at those levels the rally is almost 100 percent, 98.61 percent to be exact.
Nor can we forget that the fall of bitcoin was deepened by factors such as the collapse of the “Luna/Terra project”, that cryptocurrency that collapsed due to poor financial management, in addition to the closure of FTX, a cryptocurrency exchange platform that went bankrupt after a accumulation of complaints against him for millionaire fraud. But the market clearly set a floor above $15,000.
In this context, cryptocurrency market analysts point out that bitcoin has also become a “refuge of value” in recent months in the face of the international financial crisis, including the bankruptcy of Silicon Valley Bank. Something similar is happening with other assets such as gold and silver, although these are relatively more stable values. The point is that investors are looking for investment options in times of uncertainty.
Due to the performance of assets such as bitcoin, analysts, operators and investors have already set some scenarios. For example, they consider that, despite the marked volatility of an asset such as bitcoin, it is possible for the market to reach a new equilibrium price, while others consider that it could head towards $50,000 as the first major objective. Far is that expectation of JP Morgan about a price of up to 120,000 dollars for this cryptocurrency, but what is a fact is that it has recovered strength in a scenario of global financial and economic risk.
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