Key Assets of 2023: What May Influence Them Next Year?

2023 has been a challenging year for the financial markets. While central banks have been raising interest rates to curb inflation, the biggest global economies are slowing down, leading to a decline in the economic growth. Some experts are pointing to potential signs of an upcoming global recession due to various factors that include geopolitical instability. Let’s have a look at some facts concerning the key assets of 2023 that took centre stage and consider what may influence them in the coming year.

Crypto: The Return of Bitcoin 

The world of crypto has been shaken several times throughout the past two years. One of the major hits was the fall of the major crypto exchange FTX in 2022, followed by the recent conviction of its founder of criminal fraud. The crypto universe continued to struggle with the collapses of cryptocurrencies Luna and Terra, the bankruptcies of a crypto hedge fund Three Arrows Capital and crypto lender BlockFi. These events showed that the industry still has many unresolved issues and cooled down the enthusiasm around the crypto hype. 

In 2023, the prices of cryptocurrencies, including Bitcoin, were also negatively affected by the rise of interest rates. However, it now appears that the situation might be changing. Cryptocurrency prices have been going up in the past weeks, with Bitcoin growing nearly 150% so far this year, making it one of the key assets of 2023.

Some experts suggest that the Bitcoin price may rise in the near future, following the US Securities and Exchange Commission’s (SEC) decision on a Bitcoin spot ETF (Exchange-Traded Fund) expected in early 2024. The SEC has approved Bitcoin futures ETFs in the past, but it has repeatedly declined applications for Bitcoin spot ETFs. 

What is the difference between these two types of ETFs? A Bitcoin futures ETF does not hold actual Bitcoin, it just uses the Bitcoin futures contracts. A Bitcoin spot ETF would hold actual Bitcoin as the underlying asset and follow the current market price, allowing more direct access to the cryptocurrency. If the Commission gives its approval, it may give a significant boost to the price of Bitcoin.

What May Influence Bitcoin in 2024?

Even though the price of Bitcoin has gone up in the recent weeks, it’s still far from its all-time high values of 2021. However, there are several important factors that may influence the prices of Bitcoin and other cryptocurrencies in the coming year.

Interest Rates

The US Federal Reserve (FOMC) announced its latest decision to keep the current interest rates on December 13 and shared its outlook for 2024. Yet, this is an important event that often has a significant effect on the financial markets, so it might be worth keeping an eye out for the following announcements. 

Bitcoin’s Halving Event 

A halving is one of the key events related to Bitcoin. During a halving, the reward received by miners for validating a new block on the blockchain is reduced in half. This means a lower supply of new coins on the market, which often leads to higher demand and, consequently, a rise in the price. There have already been 3 halving events between 2012 and now. Previously, they led to a significant growth of Bitcoin. So, overall, experts are feeling optimistic about the upcoming event that is supposed to happen in April 2024.

Crypto ETF Approvals

As mentioned earlier, the US Securities and Exchange Commission is now considering the launch of a Bitcoin spot ETF. If approved, it will lead the way for more crypto ETFs to follow in the near future, which might drive the prices higher. If you’re curious about how the prices of crypto assets changed over the years, check out this video that may offer some valuable information.

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Stocks: The Rise of AI

This year, there has been a surge in the interest in AI companies and their stocks. One of the first companies to lead the AI race was Microsoft. Back in 2019, it invested $1 billion in OpenAI – the company that created ChatGPT. In 2023, Microsoft invested another $10 billion in the company. This allowed Microsoft to integrate the technology created by Open AI in a range of products. They include the Bing search engine, Microsoft Edge browser, 365 suite (Word, PowerPoint, Excel). Microsoft is also currently using AI tools in its Azure cloud platform for corporate clients.

Lately, this partnership has been at the centre of attention because of internal issues at OpenAI. In November, the board of directors decided to fire the company’s CEO Sam Altman. It’s unclear what led to this decision; supposedly, there were some disagreements between the board and the management. After that, Microsoft offered Altman a leading position in its new advanced AI research division. However, Altman was reinstated to his role at OpenAI following an open letter from the company’s employees threatening to leave and join him at Microsoft. 

Currently, Microsoft reportedly has a 49% ownership of OpenAI and doesn’t seem to have much say in its operations. Will the company want to be more involved in the development of the AI tech that has become an integral part of its products? It might be worth keeping an eye on the news related to these companies when looking for potential trading opportunities in 2024. 

Another key player in the AI race is NVIDIA. It has already introduced an AI-powered solution for game developers that involves using natural language models (similar to ChatGPT) in creating game characters. But its main product is AI chips, which have been in high demand in the past months, making NVIDIA one of the key assets of 2023. However, its rival AMD has recently launched its new AI chip that may challenge the NVIDIA’s dominance in the sector. 

Earlier this year, NVIDIA had an 80% market share in AI chip production. Will it stay ahead or give way to competition? Whatever happens, both companies might be worth keeping in mind when searching for trading opportunities in 2024.

What May Influence Stocks in 2024?

Some companies like NVIDIA and Microsoft have been at the forefront of the AI movement this year. However, others are looking to overtake them by introducing more advanced solutions and new AI-powered tools. In remains uncertain who is going to lead the AI race in 2024, as numerous global companies are planning to integrate AI in their products and technologies. 

To stay informed about the key economic events and the latest news from the world of finance, you may refer to the ‘Market analysis’ section in the IQ Option traderoom. The economic calendar may one of the most important tools for asset analysis and a great source of trading ideas. If you haven’t used it yet, have a look at this material: How to Make Sense of the Economic Calendar?

The Company offers CFDs on stocks.

Commodities: The Ascent of Gold and the Fall of Oil

The price of gold has been increasing in the recent weeks, at some point reaching $2,100 an ounce – an all-time high level. Some analysts suggest this growth is due to the conflict in the MIddle East and the expected US Federal Reserve (FOMC) decision on the interest rates in early 2024. In case it involves upcoming interest rate cuts, the bullish sentiment on gold may continue. 

Generally, lower interest rates can weaken the dollar, which might make gold cheaper for international buyers. This may boost the demand for gold and drive up its price in the long run. Ongoing geopolitical tensions might also have a positive effect on the price of gold, which is often considered a more reliable investment in times of uncertainty and instability. 

When it comes to another popular commodity – crude oil – it has recently seen prices decline. There has been a decrease in demand due to the global economy slowdown, with China’s import numbers falling from previous years. Some of the OPEC+ countries’ voluntary decision to cut oil production in the first quarter of 2024 also negatively affected crude oil prices. However, this short-term decrease might lead to higher prices in the future due to reduced supply. 

It’s important to remember that nothing is certain when it comes to financial markets. Other factors may always come into play and influence the price of commodities, as well as other key assets of 2023 in the future. So it might be helpful to consider different assets and apply reasonable risk-management tools as a part of your trading routine. 

IQ Option offers various instruments that might help protect your capital and manage potential losses. They include Stop-Loss and Take-Profit – simple and convenient tools that every trader can use on the IQ Option platform. You may learn more about these instruments in this material: Take Profit and Stop Loss: Everything You Need to Know.

The Company offers CFDs on commodities.

Final Words

This year has been a time of growth for some of the key assets of 2023, while for others it was a period of extreme volatility and decline. Bitcoin has been reaching new heights and looking to go even further in 2024, leading the way for other cryptocurrencies to enter new markets. AI companies have been gaining momentum and fighting to stay ahead of the competition, pushing stock prices higher than before. Commodities are being affected by a number of factors, including geopolitical tensions and the global economic slowdown. 

No matter what happens next, it may always be useful to stay on top of the latest events and apply technical analysis tools on the IQ Option platform when looking for trading opportunities in 2024. If you are new to IQ Option, have a look at this guide with the most popular articles that may help you get acquainted with the platform and enhance the necessary skills: Best of IQ Blog. 

Thank you for being a part of the IQ Option community, and good luck on your trading journey in 2024!