The Financial World is changing fast, perhaps too fast! 

Writing a report between the SEC tweeting that a Bitcoin ETF has been approved, and the actual approval is not a walk in the park. Was the Twitter account hacked, or are we witnessing market manipulation? God knows, but we had better get used to it.

I know everyone is excited, expecting these ETFs to send crypto values skyrocketing, “to the moon”, as the young influencers like to say. However, my concern lies more in what these ETFs will mean for the longer-term investor.

Those who bought BTC years ago and held on for dear life have little to worry about. However, if you're considering paying 50, 60, or 70,000 for a bitcoin, the risk is much higher, making the attractiveness of the product much less.


Bitcoin is a peculiar beast, with no intrinsic value other than the confidence investors have in it. The promise of Bitcoin was its independence from government and central bank control, making it an attractive product. Yet, we now find ourselves in a situation where government and central bank advisors like BlackRock and Vanguard can significantly impact Bitcoin's value. Which, for an old libertarian like me, that makes it a much less attractive product.


I'm not saying the value of BTC cannot surge; anything is possible. However, it would be remiss of me not to point out that the concept of BTC has completely changed with the launch or imminent launch of ETFs.


We all love BTC and dream of joining the list of millionaires and billionaires it has created. But ETFs are a game-changer, and none of us knows how this game will play out. Moreover, we don't know how or when the rules of the game will change.


I don't want to sound negative towards BTC or ETFs, but for me, these products are now just another financial instrument to take a punt on. They're no longer the holy grail I expect to protect me from economic mismanagement by governments and central banks.


I'm sure many will disagree with me, and I hope they are right. However, there is no denying that ETFs have completely changed the cryptocurrency landscape, and it will be fascinating to see how that landscape develops in the coming months.


Moving away from the digital world, there are more significant challenges for speculators and investors.


The dollar is under sustained attack from the expanding group of BRIC nations, and this doesn't bode well for Western economies. Many still talk of a soft landing for Western economies, and point to  equity charts including the end-of-year rally as a sign of further gains and economic improvement this year.

I appreciate the positivity and optimism, but I'm not sure I trust what I'm being told.


The forecast end-of-year rally was more than welcome, but I doubt it indicates that we are out of the woods or that our economic situation is improving. With so many elections taking place this year, it will be a massive year for politicians worldwide. Incumbents will do their best to illustrate the success of their policies in addressing various economic and political challenges.


Promises of future tax cuts and lower inflation levels will be spread like confetti, but we all know what political promises are worth.


From my perspective, I don't see any political decision over recent years that allow me to claim, "that was good for the economy."


It would be easy for me to point fingers at Joe Biden and all of his disastrous decisions, but he is not alone.


The EU has perfected the art of keeping itself out of the headlines when problems arise, but there is no question that Europe is in as much mess, if not more, than the USA. The effects of many of Mrs. Merkel's globalist policies are now coming to fruition and proving far from positive. A recession in Germany is hardly good news for the EU, and with the current toothless German administration, it's hard to see things improving. And as Germany goes, so goes Europe.


As weak as the dollar looks today, I would rather hold dollars than Euros over the longer term. And as for Sterling, no matter who the next government is, the British economy is in trouble.


On a positive note, if people are looking for something to buy this year, you need to investigate the commodity sector. I know this is not a fashionable sector, especially for younger investors, but potential is building up. I will delve into this more next year, but as I see it, dollar-denominated commodities will rise if the dollar weakens, demand for commodities is rising outside of the developed world, and if I am wrong about an economic decline in the West, an improvement in Western consumption could cause commodity values to skyrocket. And don't just concentrate on commodity superstars like Gold and Oil. From the current depressed levels, there are a host of commodities with good upside potential, some with very little downside risk.

Connect with JP Fund Services

Follow us for the latest news & insights

Share this post