This year, BTC set a historic record

Investors are advised to participate in its ETF market, invest in cash speculation, with relatively smaller volatility, and allocate a smaller proportion in the overall investment portfolio.

Article author: Simon Shi, Executive Director of Hong Kong Newport Fund Management

Source of the article: Hong Kong Commercial Daily

This year, BTC has set historical records: (1) in November, it hit a historical high of $99,617; (2) within November, it had a low of $66,834 and a high of $99,617, a rise of 32,783 points (49%), the largest single-month rise since its inception; (3) in February of this year, BTC rose from a low of $41,890 to $63,915, with an increase of 22,025 points (53%), the largest single-month increase this year; (4) in May 2021, BTC once fell from a high of $59,523 to $30,261, a drop of 29,262 points (49%), temporarily the largest single-month drop in history.

In general, BTC futures or Spot is an extremely high-risk speculative market, with a volatility of about 50% for a month, which can rise sharply or have a big dump. It trades almost 24 hours a day, every day, and is a typical cutthroat market. Large Investors can dominate in this market, so it is only suitable for speculators with ample experience. It is recommended that investors participate in the ETF market, where cash speculation is relatively less volatile and should constitute a smaller proportion of the overall investment portfolio. After the frenzy, BTC is now entering a consolidation phase, with Spot resistance at $99,617/$95,000 and support at $85,000/$75,000/$73,500.

The Hang Seng Index of 19,000 points is a short-term dividing line between bullish and bearish.

In terms of Hong Kong stocks, the Hang Seng Index has been in a downtrend in the past two weeks, repeatedly falling from the high of 21355 points on November 8th, affecting market sentiment; coupled with reports from the two major foreign investment banks, Morgan Stanley and Goldman Sachs, which have successively expressed bearish views on Hong Kong stocks, downgrading the ratings of Chinese stocks and Hong Kong shares to 'underweight', further intensifying selling pressure on Hong Kong stocks and causing extreme pessimism in the market. The Hang Seng Index hit a low of 19054 points on Tuesday, and some analysts began to predict that the 19000 point mark would be breached. On Wednesday, driven by the strengthening of the renminbi exchange rate and the rebound of the domestic stock market, Hong Kong stocks significantly rebounded before the settlement of the futures on Thursday, reaching a high of 19660 points, closing at 19603 points, up 443 points (2.31%), with a total turnover of 138.9 billion yuan on the main board.

Trump recently fired the "first shot" for the trade war, announcing an additional 10% tariff on Chinese goods after taking office, which is lower than the 60% he promised during the campaign. I believe this is Favourable Information, eliminating the negative impact of Trump's actions. In addition, the yield of the 10-year US Treasury bond has fallen, which will be beneficial for the renminbi exchange rate to rise; the Hang Seng Index has a certain support at the 19,000 level, entering the year-end Favourable Information effect of the Christmas month next week, Israel and Hezbollah signed a ceasefire protocol in the Middle East, easing the tense political situation. The oil price has fallen, and the peripheral US stock market trend has also shaken off the short-term bearish trend and stabilized. The above Favourable Information indicates a prediction of a short-term Reboundrise in the market, with 19,000 points serving as a short-term support level. It is expected to test the resistance level of 20,000. If it breaks through, it may change the market's bearish sentiment, help investors regain confidence, and increase the possibility of further boosting the Hong Kong stock market.