Dr. Ulrich Eberl is one of the most renowned German-speaking scientific journalists and futurologists. He holds a PhD in biophysics from the Technical University of Munich and was Head of Global Communication for research and future trends for 20 years at Siemens.
The strong economy together with the good sentiment on financial markets supports the preference of the investors towards riskier asset classes. Inflation in the developed economies remains subdued. Many market participants expect inflation to moderately pick up during the course of the year. US Federal Reserve bank will continue its policy of moderate rate increases. At least three more interest rate hikes are realistic in 2018. For the Eurozone a first increase of the base rate is expected in the coming year at the earliest.
What are Bitcoins?
Bitcoins were developed in 2009 as a virtual, digital currency by one person or group with the pseudonym Satoshi Nakamoto. Bitcoins are not physically tangible and are thus also difficult to grasp mentally for many.
The current environment is very positive for the capital markets: strong growth, low inflation, supportive monetary policies, good earnings growth, and low volatilities, i.e. fluctuations. Also, the numerous risks have not had a significantly negative impact on prices. However, the phase of rising prices started as early as March 2009. This environment implies that any change in the relevant parameters such as growth, inflation, and monetary policy would be tantamount to deterioration, given that improvement is not possible anymore. The most important question asked by investors at the outset of 2018 is therefore whether this positive environment is still here to stay.
Capital markets recorded a positive year of 2017. The performance of the various asset classes was of the textbook variety: the higher the risk, the higher the return. At slightly more than 1%, even low-yield asset classes such as euro government bonds or US Treasuries (in USD) posted positive rates of return1). This came as a surprise seeing that many experts had expected higher yields for government bonds, which would have come with negative effects on prices.