On December 31, the natural year ends. I still remember that at the end of 2018, almost all major asset classes recorded losses. At that time, there was a saying that "the situation in 2018 was bad, but the situation in 2019 was even worse."

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magical year

From the perspective of economic fundamentals, 2019 is indeed not good. Around October, the World Bank lowered the global GDP growth rate to 2.5%, the International OECD lowered the global GDP growth rate to 2.9%, and the International Monetary Fund lowered the GDP forecast to 3.0%.

However, the prices of major asset classes around the world have achieved a resonant rise, and equity assets have risen significantly. Both A-shares and US stocks have achieved good returns on asset appreciation. The Shenzhen Component Index rose 43.68%, ranking first in the world. Nasdaq and Dow Jones rose by more than 35% and 24% respectively, becoming the capital that Trump continues to be proud of. European equity investment products also performed well, and the Stoxx 50 index representing Europe rose by more than 18% for the year.

Equity assets are followed by commodity assets. Crude oil, metals, and agricultural products have all risen in the past year. Reuters CRB, which represents commodities, rose 10.28%, hitting a record high since 2013.

The bond market is also doing well, with both U.S. bonds and China bonds rising unilaterally.

Of course, among the major asset classes in the world, Bitcoin is the best performer, with an annual increase of 107% (as of 16:00 Beijing time on December 31, 2019).

The only loss-maker turned out to be the Chinese real estate company, which is known as "stable profit without loss".

It is worth noting that these asset classes have been used for hedging many times in the past. Such as stocks and bonds, such as commodities and gold. But in 2019 they go hand in hand.

This situation is the result of the resonance of the market's expectations for the government to stimulate the economy and the market's demand for safe-haven assets in the context of a bad economy.

Because the economy is not good, the market is expecting more favorable stimulus policies, and the government has indeed continued to stimulate the economy to echo this expectation, so equity assets and commodity assets have risen.

But the capital invested in safe-haven assets, such as the bond market and gold, their logic is that the economy is indeed declining, and safe-haven assets are king.

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Bitcoin alone is not spring

Bitcoin has become the highest-returning asset class in 2019 because of two factors. In the first half of the year, Bitcoin ushered in a retaliatory rebound from March to May, and Bitcoin fell from a high of $2,000 to $3,000 in retaliation.

But in June, a large number of institutional investors entered the market and regarded Bitcoin as a safe-haven asset. It is obvious that after June, the trend of Bitcoin is very close to that of gold.

BOCOM International Peng Fei pointed out that the scarcity of Bitcoin will approach that of gold as mining approaches the limit. However, the market value of gold is about 9.6 trillion U.S. dollars, and Bitcoin is about 180 billion U.S. dollars, and the difference between the two is about 53 times. Due to its small scale, Bitcoin has not yet been able to build a mature and stable financial system, so its ability to resist risks is weak and its price fluctuates greatly. Bitcoin's trend is "exaggerated" compared to gold.

Bitcoin chart since April

Gold trend chart since April

However, only Bitcoin has achieved relative consensus in the market so far. Most crypto assets are still in a bear market.

It is worth noting that in 2020, multi-country digital currencies may be issued. At that time, the role of Bitcoin as a payment function will be greatly reduced. It will have an impact on other payment encrypted assets in the market, such as stable coins and digital silver. The value of various altcoins will also become lower and lower.

However, if the value of Bitcoin in safe-haven assets is strengthened, the economy will be bad in 2020, which will support the price of Bitcoin. At least for now, in the digital world, there is no asset type that can replace Bitcoin.