Bitcoin sets historic record this year

It is suggested that investors can participate in its ETF market by speculating in cash, with a relatively small volatility and a smaller proportion in the overall investment portfolio.

Article author: Shi Lisheng, Executive Director of Hong Kong New Port Fund Management

Article source: Hong Kong Business Daily

This year, Bitcoin has set a historic record: (1) reaching a historic high of $99617 in November; （2） In November, the low was $66834 and the high was $99617, with a rise of 32783 points (49%), the largest monthly increase since its launch; （3） In February of this year, Bitcoin rose from a low of $41890 to $63915, with a magnitude of 22025 points (53%), which is the largest monthly increase of the year; （4） In May 2021, Bitcoin fell from a high of $59523 to $30261, a drop of 29262 points (49%), temporarily the largest single month drop in history.

Overall, Bitcoin futures or spot is an extremely high-risk speculative market, with a volatility of about 50% that can skyrocket or plummet within a month. It trades around the clock, almost 24 hours a day, and is a typical killing market. Large market makers can eat from both big and small, and are only suitable for speculators with rich speculative experience to participate. It is suggested that investors can participate in its ETF market by speculating in cash, with a relatively small volatility and a smaller proportion in the overall investment portfolio. After a sharp rise in prices, Bitcoin is now entering a consolidation period, with spot resistance at $99617/95000 and support at $85000/75000/73500.

In terms of Hong Kong stocks, the Hang Seng Index has been in a downward trend over the past two weeks, repeatedly falling from its high of 21355 points on November 8th, and market sentiment has been affected and weakened; On Wednesday, driven by the strengthening of the RMB exchange rate and the rebound of the domestic stock market, Hong Kong stocks rebounded significantly before the settlement of Thursday's futures index, reaching a high of 19660 points and closing at 19603 points, up 443 points (2.31%), with main board transactions of 138.9 billion yuan.

Trump recently fired the first shot in the trade war, announcing that he would impose an additional 10% tariff on Chinese goods after taking office, which is lower than the 60% predicted during the campaign. I believe this is a positive news that eliminates Trump's negative impact. In addition, the decline in 10-year US Treasury yields will be beneficial for the recovery of the RMB exchange rate; The Hang Seng Index has a certain level of support at the Wan Jiu level, and next week will enter the end of year positive effect of Christmas month. Israel and Hezbollah in the Middle East have signed a ceasefire agreement, easing the tense political situation. Oil prices have fallen, and the trend of peripheral US stocks has also shaken off the short-term slump and reversed to stabilize. The above positive news predicts that the short-term market will enter a rebound and upward trend. 19000 points is the boundary between good and weak in the short term. Looking back at the resistance level of 20000, if it breaks through, it will change the market's bearish sentiment, help investors regain confidence, and enhance the possibility of further boosting Hong Kong stocks.