Rise and Fall of Bitcoin an Example of Euphoria, Risks in Markets Ahead

12/28/2017 9:54 am EST

Focus: CURRENCIES

Robert Savage

Partner & CEO, CCTrack Solutions

My take away is that volatility isn’t dead and that it will continue to play a key role in how markets develop in the new year, writes Bob Savage, CEO of Track Research.

Wishing everyone a Happy New Year. The next Track article will be an update on 2018 outlooks and maybe a piece on bitcoin (BTC) after red Friday with 30-40% declines in many cryptocurrencies. Bitcoin's boom is a boon for extremist groups.

We are in the quiet period for trading and investments and I want to use that time to reload, rethink and prepare for 2018. There are many who see the next year as the transition from global easing to global tightening. This may be extreme but the fallout of shrinking the Federal Reserve balance sheet means the end of debt monetization fears in the U.S.

This puts the cost of money back into more “normal” supply and demand constraints and plays out in markets with the next set of U.S. rate hikes key to determining whether the private and public sectors can share in the rising rate world.

The debates ahead are going to focus on profit margins, the USD value, the U.S. deficits, the risks of renewed geopolitical clashes whether its Russia and Ukraine still, North Korea and China, U.S. and NAFTA or Saudi and Iran.

However, there are plenty of economic reasons to think 2017 is the base for an even bigger recovery for the world in 2018 and such growth helps gloss over the worst fears from such conflicts.

We are in full holiday mode and the only thing people seem to talk about is the rise and fall of bitcoin as an example of the euphoria and the risks from markets ahead.
Perhaps it was just the millennials cashing out and buying presents for their baby-boomer parents.

What my take away is that volatility isn’t dead and that it will continue to play a key role in how markets develop in the new year.

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