Johannesburg, 2 February 2022: Fred Razak, Chief Trading Strategist From CMTrading, looks at some of the key take-outs from 2021’s recent economic history. From the booming cryptocurrency market to central banks keeping interest rates at zero, 2021 was indeed an interesting year.  

“2021 had some notable milestones we can’t ignore. Bitcoin and Bitcoin trading hit record highs and could be on its way to becoming the new gold standard, now that gold is stagnating. FAANG stock (Facebook, Apple, Amazon, Netflix and Google) also continued to do phenomenally well. Tesla had a fantastic year and we saw a significant divergence in the markets. Re-emerging from global lockdowns, oil rebounded to $80 a barrel and the Euro dropped drastically.

Soft landings, symptoms and stimulus

“As 2022 gains momentum, we are seeing the central banks of the world do their best to provide soft landings and stimulus where various countries need it most. And the growth we have seen will probably continue as long as people keep trading on the markets. But at this stage, it’s hard to tell if we can sustain the same growth. Plus, inflation was a big issue in 2021 and will be a significant factor in 2022.

“Emerging markets are worth watching, especially the price of real estate. Real estate is a hard asset and if you look at its movement worldwide, people are currently flooding it with money. Many unpredictable variables move the global economy in whichever direction it may go. Still, so much is silently happening in the background that we can’t predict and simply aren’t seeing yet.

 “Omicron came along just as we thought things were settling and it saw travel bans and general global panic hitting the headlines. This also had an effect on the markets towards the end of 2021.

As new variants rear their heads, they are becoming more deadly in terms of their economic ramifications, even if they seem milder in terms of symptoms.

Echoes of the pandemic

“We haven’t seen the end of the pandemic. Opening and closing borders are having a yo-yo effect on the markets and the travel industry has, once again, been hit hard. Let’s hope for some calm and a big bounce back.

“With all the circumstances we experienced in 2021, forex trading was affected on a large scale. We saw certain economies hit more than others, like Australia, which curtailed its travel economy. The country imposed some of the longest, strictest travel restrictions globally. So, the Aussie dollar suffered. Turkey’s economy was also affected badly, with Turkey reeling because of tourism and travel restrictions.

Tesla and the race to 2030

“My stock of the year for 2021 is Tesla. It’s not very encouraging that Elon Musk, the founder and CEO of Tesla, sold so many shares. That's never a good sign, but it proves that stock resiliency can change the market over time. Ten years ago, electric vehicles were coming to fruition. Now, with 2030 looming, electric vehicle manufacturers are on a sustained upward trajectory.

“While some companies came and went, Tesla, stayed its course. The company saw a momentous year, proving to the world that it is a contender and that this shift from gasoline to electric cars is no longer a pipe dream. It’s something that is here to stay and a new trend that will set the new standard for motor vehicles around the world.

Zero interest and the cryptocurrency boom

“Other than the drive for climate neutrality, there haven't been any other significant trends necessarily this past year, but for the fact of some governments and central banks fuelling the economy by keeping interest rates at zero.

“It is now quite evident that cryptocurrencies are also here to stay. Setting a new standard, solidifying that gold is no longer necessarily the ‘go-to’ alternative to the US dollar, is evident that Bitcoin has firmly taken that limelight. 

Forward focus

All-in-all, with a bumper 2021 behind us, we’re probably in for another unpredictable year ahead. It's a new year, and almost certainly, a lot more change is on the horizon. But as the Greek philosopher Socrates once said, ‘The secret of change is to focus all of your energy not on fighting the old, but on building the new.’ We need to harness our agility and ability to adapt more than ever before”.

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CMTrading is the brand name of Global Capital Markets Trading Ltd (A Seychelles company, company no. 104785)