In this column a few weeks back I flagged Bitcoin and gold as potential barometers of Donald Trump’s chances in the election.

As it turned out, Bitcoin was the better marker and has continued to soar since he prevailed hitting record highs close to $90,000 while gold has been hamstrung by a surging dollar.

Investors will have their own take on the merits of cryptocurrencies, and this author would lean towards Warren Buffett’s less than generous view, but once again Bitcoin is proving pretty difficult to ignore.

There are measures a Trump administration could take which might act as a meaningful catalyst for Bitcoin - if nothing else, he has pledged to fire Gary Gensler as chair of the Securities Exchange Commission ‘on day one’ of his presidency.

As Lazard’s chief market strategist Ronald Temple points out: ‘Gensler has advocated more stringent regulation of cryptocurrencies through much of his term.’

In this context, US wealth manager Bernstein says it remains confident in its end-2025 $200,000 target. However, this asset has proven highly volatile in the past. Trading below $5,200 in March 2020 and just a smidge above $16,000 in late 2022.

So, if you are gaining exposure to crypto there is logic to doing so as part of a diversified investment portfolio, rather than putting all your eggs in the Bitcoin basket.

We look at what Trump 2.0 might mean for financial markets in general in this week’s cover story.

From one volatile asset class to another, oil prices have seen their own ups and downs both before and after the election leaving market observers scratching their heads about how producers’ cartel OPEC+ might respond.

The organisation’s current plan is to start increasing supply in January, a move which has already been delayed twice.

Bank of America Europe’s commodity and derivatives strategist Francisco Blanch says: ‘What will OPEC+ do next? Brent crude oil prices swung from a low of $68 in early September to a high of $81 per barrel in early October and have recently settled into the middle of the range near $74, a level that seems fair given all the uncertainty. Indeed, geopolitical tensions between Iran and Israel remain high, with no disruptions to show, and while refining margins hint at weak oil demand, inventories are below pre-Covid levels and not yet rising meaningfully.

Blanch adds: ‘The group faces a difficult challenge, which likely requires continued resolve and possibly additional curtailments if balances deteriorate further. Supply disruptions, whether from sanctions or conflict, may be the group’s only hope for boosting supply next year, but be prepared for a slow steady return of barrels if this occurs.’

‹ Previous2024-11-14Next ›