December 23, 2024 Edition

Welcome to this week’s edition of the weekly newsletter, where we delve into the latest developments shaping the alternative investment landscape. As we approach the end of the year, significant monetary policy decisions from major central banks are creating ripples in the financial markets. From the Bank of Japan's final rate review to the Federal Reserve's expected interest rate cuts paired with a hawkish outlook, these events are prompting investors to rethink their strategies. Additionally, insights from industry leaders like Cathie Wood highlight the growing appeal of cryptocurrencies, particularly Bitcoin, as a hedge against economic uncertainty.

Bank of Japan's Final Rate Review of 2024?

(Source: Reuters) The Bank of Japan (BOJ) held its final rate review of the year amid uncertainties regarding the global economic outlook, particularly influenced by former President Donald Trump's potential return to the political scene. As the BOJ contemplates its monetary policy direction, analysts speculate on how changes in interest rates could affect inflation and economic growth in Japan. The meeting comes at a crucial time, as investors are keenly watching for signals that might indicate shifts in the BOJ's long-standing ultra-loose monetary stance.?

Should the BOJ decide to adjust interest rates, it could lead to increased volatility in traditional asset classes, prompting investors to seek refuge in alternative investments such as real estate, commodities, and hedge funds. This shift may enhance the appeal of these assets, as they often provide a hedge against inflation and currency fluctuations, particularly in an uncertain economic landscape influenced by geopolitical risks.?

Fed Likely to Pair Interest Rate Cut with Hawkish Projections for 2025?

(Source: Reuters) The Federal Reserve is anticipated to implement a combination of interest rate cuts while maintaining a hawkish outlook for 2025, as indicated by recent economic indicators. This dual approach reflects the Fed's balancing act of supporting economic growth amidst persistent inflation concerns. Analysts suggest that this strategy aims to reassure markets while also preparing for potential rate increases in the future, depending on the economic landscape.?

A rate cut could reduce borrowing costs and stimulate investment in alternative assets, such as private equity and real estate, which often thrive in low-interest environments. Conversely, the hawkish outlook may lead to increased volatility in traditional markets, prompting investors to diversify into non-correlated alternative assets, which can serve as effective hedges against inflation and economic uncertainty.?

Cathie Wood on Bitcoin's Scarcity and Predictions for M&A Activity?

(Source: Benzinga) Cathie Wood, founder of Ark Investment Management, recently stated that Bitcoin is becoming "more scarce than gold," predicting that the cryptocurrency could reach $1.5 million by 2030. Wood emphasized the decreasing annual supply increase of Bitcoin following the April halving, which has dropped to just 0.9%. She attributes Bitcoin's price surge—up 120% this year—to heightened institutional interest and a more favorable regulatory environment. Wood's remarks coincide with the increasing popularity of Bitcoin ETFs, which have drawn significant retail investor engagement.?

Wood anticipates a surge in mergers and acquisitions, particularly under a potential Trump administration, which could lead to greater market participation and innovation. As traditional markets face uncertainties, investor confidence in cryptocurrencies and alternative assets is likely to grow, with Bitcoin positioned as a key player. This shift could drive further capital into alternative investments, as investors seek assets that offer protection against inflation and market volatility.

As we navigate these dynamic market conditions, it's essential to stay informed and proactive. At Altive, we are here to help you explore the opportunities that alternative investments can offer in times of volatility. Whether you're considering diversifying your portfolio or seeking insights into emerging trends, our team is ready to assist. Contact us today to learn more about how we can support your investment journey!

Disclaimer: This newsletter contains information from public sources, and any investment decisions made based on its contents are at the reader's own risk. Investing involves risks and might result in loss of capital invested. Past performance is not a guarantee of future results.

Altive Limited (“Altive”, SFC CE Number: BPK587) is a first-class alternative investment platform in Hong Kong licensed under the Securities and Futures Commission (“SFC”) with Type 4 (Advising on Securities) and Type 9 (Asset Management) licenses. Altive only provides services to professional investors, defined in the Securities and Futures Ordinance and its subsidiary legislation. Altive does not provide tax, legal, or accounting advice. This newsletter should not be relied upon for tax, legal, accounting advice, or advice of any nature. Readers should consult professional advice before engaging in any transactions.