Unfortunately, small businesses are really struggling in the UK and US. UK just mandated a lockdown which will hurt Europe’s recovery from the lockdowns from an economic standpoint. The UK expects 234K small businesses to close in the new year, due to strain from these lockdowns. It is very suprising after last weeks stock market weakness that the SPX, DJIA, and Nasdaq are all up this morning. We still expect that to roll over into a down trend soon. It is quit likely that unrest will occur after the election, which we think will be Trump winning, but either way. This unrest will be bad for stock indices and we expect them to drop like they did last week. If Trump is the winner there may be another turn around back up for a time. Stocks are difficult since they are so manipulated by the Fed. When US Bankruptcies start picking up in December and in 2021 that will have a more long term affect. Neutral ATM does not believe stocks can stay afloat like they have been for much longer. We’ve seen the double tops in both indices. It is only a matter of time.
Meanwhile Bitcoin printed its best monthly close ever according to Coinbase. Other OTC exchanges showed a very slightly lower monthly close. Here is a monthly chart:
This is very bullish for bitcoin. The 4 month chart is even better, cick here to view.
Zooming out lets the viewer better see the way Bitcoin reacts to its halving cycle. This chart shows the year of the 2016 and 2020 halvings being good, but the following year the shortage of supply kicks in and there is a 20X or greater move up. 2021 is setting up for that type of momentum. Which is why Neutral ATM is incredibly bullish on Bitcoin for 2021. This could go in to 2022, we’ll have to see where it is then.
As for Gold miners and the price action of Gold. 2021 looks bullish moreso than 2020 because 4th quarter 2020 appears likely for more deleveraging and 2021 and 2022 more likely for inflation and continued weakening of the USD which is very good for Gold. Gold miners will do very well expecially the large players like Franco Nevada, and Barrick’s. Gold mining is consolidating and the junior miners will likely get bought up by the larger players in 2021 to 2023. We do see a bull run for Gold especially as inflation sets in and the USD loses value. Bitcoin’s bull run is for those reasons but moreso due to mass adoption, network effect, and scarcity post halving in May 2020. Neutral ATM is 75/17/5/3 distributed between Bitcoin, Gold, Ethereum, Fine Art in that order.
We see stocks as a big risk going in to 2021. Bitcoin is much easier to find trends as long as you zoom out and keep the basis long term. Therefore, we remain long Bitcoin. To a lesser degree, we are also long Gold. Neutral ATM is here to get everyone off of zero Bitcoin.
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