Market report

Gold in the portfolio, bitcoin awakens to new life.

November 13, 2023
Gold in the portfolio, bitcoin awakens to new life.

Chart of the week

Source: Isabelnet. 7.11.2023

A major correction in the equity markets began in January 2022. The chart shows the return on gold (dark blue) and the US equity index S&P 500 (light blue (normal), green (equally weighted)),
Why this is important
Investors often argue about whether gold should be included in an investment portfolio. Gold does not yield a return, it does not provide a dividend. Gold is often referred to as a crisis currency. In times of uncertainty or rising interest rates, it is worth adding gold to a portfolio. This is shown in the chart above. An admixture of gold would have stabilized a portfolio well since January 2022 and minimized losses.

Bitcoin awakens to new life
There are two very positive developments in the Bitcoin market that are driving the market upwards. Since the low in December 2022, the market has already risen by 130%. But much more seems possible.

Institutional investors have rediscovered the market. And as volumes rise, so does the price.

Halving (the big halving)
Bitcoin is a very decentralized network, so it cannot be controlled by anyone. For a transaction to be carried out successfully, it must be added to the ledgers on all nodes. There are currently 16,953 nodes.

A lot of computing power is therefore required to post a transaction. The people who provide this computing power are rewarded, as the network would not function without them. They are also called miners, as they mine or create new bitcoins.

Source:, What Is Bitcoin Halving, Mai 2023

In 2009, the reward was still 50 Bitcoins per block, currently 6.25 and next year the value will be reduced to 3.125. This halving of the reward is firmly anchored in the Bitcoin code and part of the system.
By halving the reward, the cost of producing a Bitcoin doubles.

Source:, Mining Bitcoin on Household Electricity, Aug 2023

The chart shows how high the energy costs are for a private individual in each country to produce one Bitcoin. In the USA, the costs amount to USD 46,280, but in Iran only USD 530.
From April 17, 2024, the costs will double. In the USA, the costs will then rise to 92,560. As Bitcoin is currently at 39,000, no private individual in the USA will produce new Bitcoins. Unless the price rises above USD 92,560.
Halving therefore reduces the supply of bitcoins, which tends to lead to a rising price until it is worthwhile for miners to produce bitcoins again.

Source:, What Is Bitcoin Halving, Mai 2023

The chart shows the price of Bitcoin (dark blue, mountain range) and the times of the halving (light blue line). The red arrow shows the price effect in the period before and after the halving. In the past, the Bitcoin price has always increased by at least 100% around this event.

The upward movement usually begins two to six months before the halving. This makes many investors optimistic.

Spot ETF from BlackRock
ETF (Exchange Traded Funds) are a very popular tool for investors to invest.

There are two types of ETFs:

- Futures ETF:
This is mainly used in the commodities sector. The ETF does not contain any gold bars or wheat, as this would have to be stored and guarded, which would cost a lot of money. The ETF therefore concludes a forward transaction on the financial market (futures), which gives it the right to purchase gold or wheat. Before the delivery date is reached, the right is sold and a new right with a new delivery date is purchased. The futures are rolled. This incurs high costs.
As these are only forward transactions, an investment in the ETF has no price-driving effect.

- Spot ETF:
The ETF physically buys each individual share of the index it tracks and places it in a custody account. As the investor owns part of the securities account, this is much safer than a forward transaction.
A spot ETF could be integrated into any savings plan and would make Bitcoin socially acceptable.
Every investor who buys such an ETF has a price-driving effect on the market.

So far, there is only one futures ETF for Bitcoin. The US Securities and Exchange Commission (SEC) has so far rejected or postponed all applications for a spot ETF. The company Grayscale had submitted an application that was rejected by the SEC. Grayscale is currently appealing against this decision.

Source: Twitter, CoinMarketCap, @CoinMarketCap, 28.06.2023

The chart shows BlackRock's entry for a Bitcoin Spot ETF. BlackRock is the world's largest asset manager. If the application were approved, it would take Bitcoin to a whole new level.

To the surprise of many, BlackRock submitted the application for a Bitcoin Spot ETF on June 15. This has already caused a rise of almost 50 % in the Bitcoin price.
To understand the implications of the decision for a spot ETF, it is worth looking at what happened with gold when the first spot ETF for gold came onto the market.

Source: Tradingview

The first gold spot ETF was launched in Australia on March 28, 2003 and many more followed. After this date, there was an upward movement of over 400% in gold, which lasted 5 years.

Around 60 % of the volume in the gold market is tied up (jewelry, part of technical instruments). 40 % of the gold holdings are tradable.
The structure of the Bitcoin market is comparable. 80 % of all bitcoins were created and have never been traded. They are therefore in "strong hands". This suggests that a spot ETF on Bitcoin could have an even greater impact than the first spot gold ETF.

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