2018 has been a dull year for cryptocurrency in regards to their price point, not disappointed by the current bear market most crypto enthusiasts believe 2019 will be way better for them. In fact, Travis Kling, the self-proclaimed ex-equities portfolio manager who “fell down the crypto rabbit hole” believes that cryptocurrencies will be the best performing asset class in 2019.
It’s not just cryptocurrencies are facing a bear season, other asset markets are almost sailing in similar boats. Kling, who currently lead the cryptocurrency asset management firm Ikigai asserted that Crypto will outperform the bear of the traditional markets.
Crypto has never existed during a bear market in traditional assets.
BTC was birthed at the very beginning of the largest monetary experiment ever- globally coordinated QE. Ending QE is causing pain
There is a significant chance Crypto is the best performing asset class in 2019 pic.twitter.com/vIdKTrm5sV
— Travis Kling (@Travis_Kling) December 23, 2018
Ten years ago, the U.S Federal Reserve began quantitative easing (QE), lowering interest rates and buying government bonds and mortgage-backed securities worth trillions of dollars’. This move shielded the U.S from major depression, other global economies soon followed suit, increasing market liquidity in order to fuel economic growth.
In late 2017, the Federal Reserve let their holdings mature without reinvesting, ending quantitative easing and initiating the opposite – quantitative tightening. While the U.S. government was the first one, soon the Bank of Japan (BOJ) and the European Central Bank (ECB) joined in by slowing their bond purchases in 2018.
Though the ECB and BOJ still hold back some of the bonds, October 2018 was declared by Bloomberg Economics, as the month the world’s largest central banks collectively started to decline their bond holdings. Also adding the rise in interest rate by the U.S, the “normalization” process has started. A combination of these and other factors signs towards an probable global recession that will surelu be negatively impacting global asset markets.
In 2009, just after the QE began, Crytocurrencies was released. Kling is spot on one account that, they have not existed in a traditional asset bear market. He also notes that this year’s developing bear market has squeezed some juice out of the digital assets as well. Being a risky asset they could also see the further impact:
“It would make complete sense to me that crypto would bottom out months before traditional asset classes.”
Reactions to Kling’s Tweet
The resulting conversation was a bundle of mixed emotions. While some believe that crypto assets will continue to fall and be the “worst” performing asset class, some share the same sentiment as Kling of it being the “Best”.
Notably, the reversal in cryptocurrencies’ performance as predicted by Kling might have had started, after a very low November, last week observed over $30 billion market returning back. Assets like Bitcoin and Ethereum managed marginal recoveries, sort of cementing their importance in global economies.