Bitcoin is the Top Asset in H1 of 2019, Outshining Iron, Oil, & Tech Stocks
- Constraint on supply pushes iron ore prices up
- Russian equities become profitable as currency finds strength in the absence of new sanctions
- Global Demand and trade disputes to drive oil prices even more
- Despite regulators questioning Big Tech’s dominance, their stocks grew considerably
June is coming to an end and Bitcoin still remains the most profitable asset of 2019 till now. BTC, as a matter of fact, is the best investment of the last decade.
In these past six months, the price of the world’s leading cryptocurrency with a market capitalization of $209 billion went from about $3,750 to the current $12,142, though the highest point has been $13,900. Till date in 2019, BTC/USD has surged 224 percent.
After the brutal winter of 2018 that followed the bull run of 2017, Bitcoin has started recovering.
There are a number of factors contributing to this success. The first one is the usual cycle that Bitcoin follows. The digital asset is moving towards its 2020 supply cut, the halving event that historically has led to price appreciation.
The trade war between the US and China played a role as well. Bitcoin proved to be a useful way to move funds out of China. Facebook introducing its new cryptocurrency called Libra is another such reason.
Other possible factors behind Bitcoin’s uptrend could be, growing debt, socialism, the possibility of a wealth tax, and geopolitical problems that has Bitcoin seen as a hedge much like gold.
Constraint on Supply Pushes Iron Ore Prices Up
Bitcoin is followed by Iron ore with 67 percent gains. Bad weather, Vale SA’s dam disaster in January, and booming steel demand has the prices of iron ore reaching five-year high.
Moreover, the constraint on supply is pushed by China as the mills continue to set new production records while Chinese iron-ore inventories are further expected to dwindle, reaching critically low levels in the second half of the year.
Russian equities become profitable as currency finds strength in the absence of new sanctions
After Iron ore, Russian equities proved to be quite profitable with 33 percent returns.
This year, Russian stocks sprung back to the level they traded in 2014 before the US sanctions sparked a meltdown.
Emerging market investors are returning to Russia as the country finds currency strength, financial stability, and cheap equity valuation provides a reprieve from the asset vulnerable to trade tensions. Absence of new sanctions also boosted the value of the ruble and revaluation of equities.
Global Demand and Trade disputes to Drive Oil prices even more
With a 31 percent return, WTI oil also came out as one of the winners. It is further expected to trade between $50 to $70 a barrel, up from current $59, at the end of August as analysts see global demand and trade disputes the biggest driver of oil prices.
Meanwhile, the United States will sanction any imports of crude oil from Iran, as stated by US Special Representative for Iran, Brian Hook. He also said that the US would look into the reports that says Iranian crude oil tankers have departed and arrive in China, meaning China is defying the US sanctions on Iran’s oil exports.
Despite Regulators questioning Big Tech’s Dominance, their Stocks Grew Considerably
FAANG stocks also managed to make it to the top assets of 2019’s first half even as regulators and lawmakers question whether they are too dominant.
While four of the five FAANG stocks grew 25% in their market value over these past six months, Microsoft, the largest public tech in the US with a market cap of $1 trillion grew 31% since 2019 beginning. However, Alphabet, Google’s parent company only saw modest growth of 3.6%.
This surge followed the tumble in the share prices of these companies after regulators and skeptics like presidential contenders Elizabeth Warren threw criticism at Big Tech for growing too large, what they call dominant market positions.
While Tesla had a turbulent start of the year, other tech stocks also rose in value, with snap seeing explosive growth.
Traditional assets had a good start of the year but they are far behind Bitcoin which is expected to surge much higher than these assets in the second half of the year.