Whether you’re a seasoned market enthusiast or someone sceptical about the financial world, one thing is for certain – you can’t afford to turn a blind eye to the markets. The year 2024 has already seen its share of turbulence, particularly with the approval of Bitcoin ETFs by the US Securities and Exchange Commission, resulting in a staggering USD 4.6 billion in shares traded within 24 hours.
As we venture further into 2024, it’s imperative to be prepared for the volatility that lies ahead. Here are three “volatility spikes” you need to keep a close eye on as you plan your financial goals for this year:
Bitcoin Halving (around April)
One event that consistently sends shockwaves through the cryptocurrency market is the Bitcoin halving, and 2024 will be no exception. This phenomenon occurs approximately every four years, reducing the mining rewards by half and, consequently, slowing down the creation of new Bitcoins. With its increasing scarcity, Bitcoin becomes an attractive proposition as a deflationary asset, drawing the attention of investors seeking store-of-value assets.
Fed Rate Cuts
While the Federal Open Market Committee (FOMC) anticipates only three interest rate cuts by the end of 2024, the market has a different perspective, with an 80% probability of at least five rate cuts from current levels within the same time frame. History has shown that rate-cutting cycles tend to steepen the yield curve, prompting investors to seek returns in long-dated bonds or the currency and equity markets.
US Elections (November)
Economic growth, interest rates, and inflation are typically viewed as more critical factors than election results with market dynamics. However, the 2024 US presidential election is a unique case worth monitoring for two significant reasons:
A Biden vs. Trump Rematch: The election is shaping up to be a showdown between President Joe Biden and former President Donald Trump, who currently enjoys a commanding lead among Republican rivals.
Historical Market Trends: Since World War II, the S&P 500 has posted gains in all 14 instances when a sitting president has sought re-election. Will it be Biden or Trump crossing the finish line this time?
These volatility spikes are set to inject risk back into assets like stocks, currencies, and cryptocurrencies. Brace yourself for the thrilling ride that is 2024, and remember – in the world of finance, staying informed and adaptable is the key to success. Buckle up and embrace the volatility of the year ahead!
