Nobody knows what it’s really for. Many people suspect him of facilitating money laundering for organized crime around the world. And yet, the speculators who bet on bitcoin in 2023 are those who probably made the best financial bet this year.
The only other best way to get rich quickly on the stock market, for interested speculators (and there are some…), would have been to bet against fears of stock market volatility, Bloomberg calculated last week. The American financial agency has compiled a list of the best financial returns of the year.
The best way to get rich in 2023, she said, would therefore have been to find an exchange-traded fund (ETF) designed to increase in value every time the VIX volatility index crashes. The VIX calculates the change in the values of the securities making up the S&P 500, and the greater the change, the higher the index.
In the blind spot of economists
At the end of 2022, economists and stock market analysts were mostly of the opinion that 2023 was going to be a year of recession, in a context of overheating of the economy and geopolitical uncertainty. Many bubbles also promised to burst, like real estate, which ultimately remained rather stable. All this normally contributes to creating this famous volatility.
Ultimately, the global economy avoided the worst, in 2023. Nothing is yet won for 2024, but pessimism is not as widespread as it was a year ago.
In the meantime, without making too much noise, bitcoin, a cryptocurrency that was the big techno and financial star until its rapid crash at the end of 2021, has stabilized over the course of 2022. This year, bitcoin has regained about half of its value lost against the US dollar two years ago.
Since January, investors have driven up the value of bitcoin by just over 125%, from US$16,000 in early January to almost US$38,000 on January 1.er December.
Third among the best ways to get rich in 2023, a good idea would have been to bet on technology stocks. Yes, the famous GAFAM. Meta, the parent company of Facebook and Instagram, saw its value jump 164% in 2023. Microsoft, however, is not a start-up with exponential growth, gained approximately 57% during the year.
And that too is surprising. On the stock market, tech stocks are often described as the canary in the mine: they are the first to collapse when economic indicators become negative. They are also particularly sensitive to high interest rates.
And while central banks have raised rates at historic speed, this year, techs are doing surprisingly well.
Bitcoin and Canada
Several reasons can explain the comeback of bitcoin this year. Let us remember, however, that this is a digital currency whose only real value is the trust of the Internet users who trade it. It is not based on any concrete tangible assets, on any predictable commercial activity. Its control escapes any form of financial authority. Bitcoin is even a popular way for organized crime to launder money.
In short, there are a lot of liabilities around this cryptocurrency.
This has not stopped investors from all walks of life from becoming interested in bitcoin again in recent months. One of the main reasons is that the Securities and Exchange Commission (SEC), the powerful American financial authority, is considering authorizing the circulation in the United States of exchange-traded funds (ETFs) based on cryptocurrencies like bitcoin or Ethereum. Less known, Ethereum is the second largest cryptocurrency, behind bitcoin.
It is believed that the SEC could authorize the first crypto ETFs early in 2024. Stock marketers are already salivating at the prospect of their arrival. Bitcoin ETFs that have existed in Canada since the beginning of 2021 have been particularly active since the start of the current fall.
If that happens, it won’t be an easy feat. BlackRock, one of the largest American asset managers on the planet, would be involved. This could have a snowball effect. Other large firms will want to imitate BlackRock, and financial institutions and independent portfolio managers are likely to add such ETFs to their portfolios.
Given that it is one of the few to have authorized crypto ETFs on its territory, Canada is one of the financial markets that will benefit the most from a return to favor of bitcoin, if it obtains the green light from the SEC.
Perhaps this will stimulate interest in financial products associated with bitcoin, such as those of the Montreal company Shakepay, which already offers a million Canadians Visa cards whose reward is a 1% bitcoin rebate of the value of purchases.
Shakepay has just added direct deposit, bill pay and wire transfer in Canadian dollars to its services, alongside its bitcoin savings account. “I think that bitcoin can become a way of saving in the long term,” assures its CEO, Jean Amiouny, a former McGill student. “We see that over time, the volatility of bitcoin calms down. »
Nobody knows how cryptocurrency will evolve in 2024. But after two years of calm, it seems set to establish itself for good in the global financial landscape.