Thanks for joining us for today’s edition of Overbit Weekly Round Up. For most investors and traders, all eyes were on the US presidential election over the past few days. That being said, today we’ll take a look at the Bitcoin markets and the equities markets, and evaluate what has been going on since the November 3rd election day.
We’ll start off first with the equities markets, primarily focusing on the US. stock markets given the locale of the election, where we are seeing futures on US Stock swinging wildly on Wednesday after prospects of a quick and decisive election faded. This led to the Dow Jones index plunging more than 400 points (1.5%). As we spoke about in previous articles, grave uncertainty surrounded the financial markets leading into this presidential election. Whilst some investors may have been hoping for a reprieve, it now seems this election could stay in the air for the next few days, weeks, or even months. If that happens, we expect to see continued volatility, most likely to the downside, as investors move away from “riskier assets” as a hedge to this election.
Some of these riskier assets, of course, include cryptocurrencies like Bitcoin, which leads us right into our next section. We’ve seen Bitcoin experience significant volatility in the last few days, repeatedly breaking through and falling below the $14,000 mark. At the time of writing, it sits just above the mark at $14,183, though we don’t expect the volatility from the US. presidential election to end here. Once again, we see Bitcoin move in tandem with the rest of the world’s comparable assets. As much as cryptocurrency enthusiasts imagine that Bitcoin exists outside of the system, we find it impossible to ignore the present correlation between the US. dollar, stocks and equities markets, and cryptocurrency. How long this correlation will last, and in what direction, seems to be the real question. With Bitcoin hitting yearly highs above $14,000, we imagine the decoupling could come sooner rather than later.
Closing out this week’s Overbit Round Up, we’re seeing the Dollar continue to trade in a tight range as global investors continue to watch the election results, and we see the British Sterling fall against the USD and the EURO. The main catalysts for Sterling’s fall seems to be the media reports that the Bank of England is considering negative interest rates. Brexit and Covid-19 will assuredly continue to be the driving forces for Europe’s Forex Markets as well.
It’s hard to tell where the markets will be in 2021, but one thing is for sure, they will be a bit volatile heading into 2021 across the board. For investors, it is probably essential to diversify your assets, across multiple markets, crypto, equities, forex, and precious metals. In the meantime, Overbit.com will continue to provide cutting edge research, tools, and market support where it matters most.