Metals Price Rise, Markets Waiting for Incentives & BTC Cheaper

23. Feb. 2021

The world keeps on getting ready for economic recovery and for how it can be discounted for future processes. The commodity markets, literally bursting in recent months, have become an object of discounting. The week kicked off with copper futures topping $9,000 per ton for the first time since 2011. Zinc futures hit a two-year high, while aluminum futures hit their highest level since 2018.

The weak dollar and expectations of the imminent US stimulus package adoption can traditionally be named as this growth’s additional drivers. This week, the relevant bill will be submitted to a vote in the House of Representatives. Next week, a vote will be held in the Senate. In general, by March 14, the issue will have been fully and completely resolved—mainly by some democrats.

What does this mean for financial markets? We’ve already been through the better half of 2020. It’s even strange that against this background, Bitcoin yesterday managed to lose 10%. What’s so strange, though? It can fall by 50% and nothing in the world will change. Simply because the real value of cryptocurrencies still has nothing to do with prices in the market. One cannot help but recall the DogeCoin founder’s comment, who stated that he’d spent about 3 hours creating a token. Once again, the cost of a cryptocurrency, now ranking 14th in the world with a capitalization of 7 billion each, is three hours work by one person. That’s all you need to know about the value of a given cryptocurrency.

But back to the commodity markets. The rally continued in the oil market. After the collapse of the US oil market last week amid a sharp cooling, the markets are getting used to the idea that there will be no immediate return to pre-crisis production, and no less than 40% of US oil production has been lost. But next week another OPEC Plus meeting is planned. Saudi Arabia and Russia’s positions diverge again.

Let’s remind you that last year this led to negative oil prices (meaning futures contracts, of course). And the markets have clearly not forgotten this.

Accordingly, there’s an element of fear. Therefore, we keep believing that oil growth will be limited this week, especially given the fact that most likely almost every day there’ll be news of heroic efforts to restore the US oil production.