2024 Stock Market Watch: The Future of Nasdaq, BTC & Other Indices
2024 has been a year with big stock market movements for assets like Gold (XAUUSD), Nasdaq100, Bitcoin, and other cryptocurrencies. These assets have had ups and downs, with a notable low point from November 2021 to December 2022. For instance, Bitcoin dropped to around US$15,480 during this time. One major factor behind this drop was the high global interest rates. However, these assets have bounced back strongly since then.
It’s worth mentioning that these assets hit their previous record highs during a time of low interest rates, partly due to the COVID-19 pandemic. Retail trading also surged as people looked for new income sources, including crypto trading, during lockdowns.
In November 2021, global central banks started hinting at raising interest rates to tackle high inflation. This led to a sell-off in Gold and Nasdaq100. Interestingly, Bitcoin and Gold showed an inverse correlation with the US interest rate and the performance of the US dollar measured by the Dollar Index (DXY). Investors turned to US Treasury bonds as a hedge against inflation, favoring them over cryptocurrencies and gold, which don’t offer yields.
During this period, asset managers worldwide saw an opportunity to create a new asset class that was safer for investors yet tracked crypto prices, especially Bitcoin. This idea led to the approval of the Bitcoin Exchange Traded Fund (ETF) by the US Securities and Exchange Commission (SEC) in January 2024. Bitcoin’s price surged as a result, with its recovery starting in January 2023. ETFs, like the Contract For Difference (CFDs) offered by brokers such as Exness, allow investors to participate in asset growth based on underlying assets’ value and price.
While 2023 remained a high-interest rate environment, expectations grew regarding possible interest rate cuts by the US Federal Reserve (US Fed). However, the US Fed surprised markets by keeping rates higher for longer. Looking ahead to 2024, the global outlook seems more favorable for Gold, Nasdaq100, and cryptocurrency trading, despite ongoing high interest rates. Inflation has started to ease, although not as rapidly as expected by global central banks.
The odds of interest rate cuts in the second half of 2024 have been factored into the market, according to the US FedWatch Tool. Fed Chair Jerome Powell has also hinted at potential rate cuts in 2024 if inflation moves closer to the preferred target rate of 2%.
Considering Bitcoin’s recent peak of around $73,706 in the first quarter of 2024 and upcoming events like the Bitcoin halving event expected in April 2024, there’s optimism for a surge in Bitcoin’s value. Additionally, other cryptocurrencies like Ethereum are seeking SEC ETF approval, and regulators are approving spot ETFs in various regions, indicating a positive trend for cryptocurrency trading.
In summary, while interest rates may not reach the lows of 2020-2021, the possibility of an $80,000 Bitcoin in 2024 and further record highs for Gold and Nasdaq100 remains plausible, especially with potential interest rate cuts in the latter half of the year.
