A key source of alternative data is Social Intelligence or ‘Social Listening’, which monitors social media channels and other online news outlets for mentions of a particular brand, product or keyword, together with analysis of consumer sentiment.
Research has shown that Social Intelligence is a fundamental market indicator for the banking and finance sectors. This demonstrated by the correlation found between the stock price of the UK’s leading 11 banks and ESG (Environmental, Social, and Governance) content shared online via news channels and social media platforms.
For example, research conducted over a 12-month period found a strong correlation between negative ESG sentiment and a reduction in the daily stock price of Deutsche Bank. Comparatively, positive or neutral ESG sentiment relating to Barclays showed correlation to an increase in daily stock price[1].
During the start of the Coronavirus pandemic, traders reported fluctuations in the market but an overall positive indication as the government announced means of financial support to keep businesses afloat. Fast forward several weeks and markets are now suffering as an increasing number of businesses have entered administration and are struggling to operate under the imposed lockdown measures.
That said, how will Social Intelligence help traders during the coronavirus pandemic? And as a means of alternative data, will it be the first to show signs of economic recovery?
Accurate Insight into Consumer Confidence
Unlike Social Media monitoring, Social Intelligence provides accurate insight into consumer confidence and is able to reveal both negative and positive sentiment, ranging from anger through to surprise.
This means that as consumer confidence grows – be that in response to the government significantly increasing coronavirus testing or relaxing rules under the lockdown period – it is likely that the markets will too.
Savvy traders who use Social Intelligence as a means of alternative data will already be one step ahead, and through analysis surrounding market sentiment, will be able to assess when the economy will start to recover.
This will initially stem from small signs of hope, such as news of the UK lockdown study that revealed that average person with coronavirus now infects 0.62 other people, down from 2.6 before social distancing measures were introduced. If stats continue to show significant improvement, this will drive positive social sentiment and an indication of market recovery to traders who maximise this form of alternative data.
Understand How Markets Change
Traders who tap into the power of Social Intelligence will have far greater insight into how a target market is likely to act and respond to certain developments within the news, be that environmental, social or political.
This means that traders who have continued to rely on Social Intelligence throughout the coronavirus pandemic will have a unique insight into how the consistent news updates or government press briefings are impacting the markets, enabling them to make more informed decisions as the pandemic progresses.
Having this unique understanding will not only help traders generate gains for clients, but will also provide them with the opportunity to predict how and when the economy will start to experience a positive change.
There is no doubt that the economy has a long way to go, with the FTSE 100 marking its worst quarter since 1987 due to the outbreak of COVID-19. However, the start of April has indicated slight promise, with market reports showing small growth.
Overall, Social Intelligence has the potential to play a significant role in helping traders over the coming months, not only in delivering greater market insight but also in providing an early indication for when the UK economy could recover.
[1] https://www.digital-mr.com/archive/view/digitalmr-finds-link-between-bank-stock-price-and-esg-buzz
The opening months of 2020 have presented a unique challenge for traders, with markets regularly making sharp and often unpredictable shifts in value. Disruption to international trade and geopolitical tensions dramatically influenced market sentiment during the first quarter of the calendar year, making it difficult to produce long-term market forecasts with any degree of confidence.
When volatility reigns, the need to minimise the risk of investments becomes greater than ever. This has prompted investors to consider the advantages of trading CFDs, and the benefits of subsequently hedging CFDs to reduce their market exposure if needed.
CFD stands for 'contract for difference', with these contracts available for trade on stocks, shares, currencies, and commodities. Traders never assume ownership of the underlying asset, instead speculating on the increase or decrease of that asset throughout the duration of the contract. The difference in the asset's price between the start and end of the contract determines whether a trader is in profit.
Going long on a CFD position is when the trader anticipates the asset will rise in value. Conversely, going short is where the investor forecasts a decline in market price, sealing a profit if the asset does shed value during the contract period. A short position is sensible when markets are reeling from major world events, while going long is suited to more prosperous times for industries.
Buying shares, purchasing a currency, or investing in a commodity is usually done in the hope that the asset will increase in value. During times when there is limited upward mobility for markets, traditional investment routes lose their appeal. CFDs are ideal for difficult times, as an investor can speculate on a rise or, crucially, a fall in the value of an asset.
Tough market conditions may restrict investment capital, but leverage in CFD trading ensures that a comparatively small proportion of capital is required to open up a large position on a market. While the CFD trader is liable for any losses accrued by the CFD, leverage allows investors to establish substantial positions that may otherwise be unattainable.
CFDs are ideal for difficult times, as an investor can speculate on a rise or, crucially, a fall in the value of an asset.
Further expenditure is saved through stamp duty; CFD traders aren't required to pay this tax, as they never have ownership of the asset. CFD investors can make their money go further during difficult trading conditions, but it is the ability to hedge CFDs that reduces the risk of being compromised by dramatic market shifts.
An investor has the option to hedge their CFD trade by opening the opposing position on an asset. For example, the trader may have a long position on an asset that is declining in value. By shorting that same asset, a trader can then earn money from that price decline and compensate for some of the losses from going long.
That asset may prove resurgent and end up with an overall rise in value once the contract ends, with the hedged position diminishing a trader's profits in this situation. While a hedge reduces the profit that can be made from a trade, it reduces the amount of capital that can be lost.
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This is why hedging CFDs is attractive during times of market volatility. A trader can research their CFD down to the minutest detail, but unforeseeable developments can turn a good position into a bad one. Hedging mitigates a trader's losses on a failing CFD, delivering a degree of compensation when the market moves in an unfavourable direction.
CFDs can be purchased on major financial markets, use leverage to reduce investors' initial outlay, and enable traders to speculate on movements in either direction. These factors make CFDs suitable as a trading strategy during difficult conditions, while the potential to hedge minimises traders' exposure to market volatility.
Markets and stocks in Europe were hit hard over the weekend, and though there has been some rebound, the spread of the coronavirus outbreak is seriously affecting markets worldwide. 12 Italian towns were locked down over the weekend, following over 150 cases and four deaths. As a result, the pan-European STOXX 600 index and Italy’s FTSE MIB Index were down 3.3% and 4.3% respectively.
“Italy’s lockdown, as the country tries to control the worst outbreak of the virus in Europe, has caused investors to panic about how business and society will be affected,” Russ Mould, investment director at AJ Bell, told Yahoo Finance.
“There has been so much complacency in recent weeks from investors, despite clear signs that China’s economy is facing a large hit and that supply chains around the world were being disrupted,” he added.
On the other hand, gold has seen a strikingly opposite effect, as the value of gold has now reached a seven-year high in the wake of the coronavirus outbreak. It’s clear that although some investors have been complacent in protecting their investments, some have resorted to storing their money in gold, a safe investment space.
According to recent figures, gold prices climbed around 2% this week, up to levels not seen since February 2013. Prices are now fluctuating as high as $1,678.58 an ounce.
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On the topic of complacency, the deVere Group’s CEO, Nigel Green has warned: “Many investors remain complacent about the far-reaching impact of coronavirus, which is continuing to spread – and at a faster pace. This will inevitably hit financial markets and investors’ complacency leaves many wide open to nasty surprises.”
“Against this backdrop and with the ongoing uncertainty over the direction of stocks and other risk assets, multi-asset portfolios might be favoured by global investors, given that they offer diversification of risk as well as of return.”
As we celebrate the last decade of fintech, one thing that has stood out is the impact digital lending has had on consumer lending habits - and their options. With more financing options available than ever before, the market is fraught with lending options to suit each need, credit score and repayment condition. Online instalment loans have exploded onto the scene, giving credit card usage a run for its money, while peer to peer lending platforms are now the norm.
In the industry, experts are already looking ahead to 2020 and beyond, predicting the prioritisation of financial health and the vertical integration of fintech across other key industries such as healthcare.
Here are some of the decisions consumers need to keep in mind when considering the multiple fintech credit options available today.
By the end of the first quarter in 2019, 19.3 million Americans had at least one personal unsecured loan outstanding, mainly thanks to the rise of fintech. Wider access to finance options has meant that more of them are turning to personal loans as they continue to live paycheck to paycheck. However, as with most personal unsecured loans, they come with a higher price tag. For unsecured personal loans, the interest rates can range from 5 percent to as high as 36 percent, much higher than the average 19 percent credit card interest rate charged for new credit card accounts. This makes it even more important that consumers do their due diligence when searching for the best loans online.
In 2019, Bankrate put the average interest rate for personal loans at 11 %, and with the influx of online instalment loan lenders, there are even more options with lower rate options. For years, consumers looking for additional finance have thought that high-interest credit cards were their only choice. Now, with the aid of online comparison platforms, consumers can easily find an interest rate they are comfortable with, and more importantly, there is more transparency when it comes to the cost of choosing that particular route.
In 2019, Bankrate put the average interest rate for personal loans at 11 %, and with the influx of online instalment loan lenders, there are even more options with lower rate options.
Yet, this does not mean that borrowers are any more knowledgeable when it comes to the terms and conditions of the loans they are borrowing. In fact, in the United Kingdom, 60 percent of them do not know the rate of their loans, according to research from Mintel, while in the United States of America, Americans are similarly ill-informed. The same can be said for their financial health. In 2019, 43 percent of them didn’t know their FICO scores, a key determinant of their creditworthiness for a personal loan.
However, checking credit scores is now simpler than ever, thanks to credit bureaus and lenders like American Express offering online or mobile login and checking features. Most major credit card issuers offer a view at consumer credit scores from at least one of the three main credit bureaus. Similarly, checking the fine print of personal loans such as passed on charges or early settlement charges that may drive up the total cost of the loan are important. For example, three out of four student loan borrowers (including private loans) do not know what effect their death would have on their loans.
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Fintech lending options are not only lowering the costs of borrowing, but they are also minimising the reliance on credit scoring as a main determinant of loans. This means borrowers with no past credit scores or a low score can easily get a personal loan, whether it is backed by traditional lenders like the bank or more modern peer to peer lending platforms. This does not necessarily signify that the standards of credit scores have completely been erased. Today’s fintech borrower has a FICO score of 650, compared to the 649 FICO held by traditional bank borrowers. However, a lender with a good credit score may also want to consider the additional credit options open to them, such as approval for credit card offers with 0 percent purchases and balance transfers, lowering the overall cost of borrowing.
Finally, it is interesting to note that the age market that currently holds the largest share of the fintech personal loan market is Gen X (ages 38-52) and Gen Y (ages 24-37). This captures the most tech-savvy and outspoken demographics of the market, matching up perfectly against the transparency and personalisation that fintech loans now offer.
However, even with these added benefits of fintech borrowing, there still remains a basic question that consumers must answer before they enter the world of borrowing: what is the best personal loan option for me?
Investors can consult with online tools that provide live updates and succinct summaries of asset price movements; however, having access to this knowledge will only go so far. The big challenge is understanding how to use this information to inform trades and investment strategies.
With the US-China trade war, the US Presidential election, the spread of the coronavirus, and the UK’s withdrawal from the EU just a few of the major events likely to shape 2020, now is an important time to understand the techniques regularly used by traders and investors when confronted by certain political and economic conditions.
Staying on top of market movements can best be achieved by first understanding the basic principle of causality. By this, I mean that one event, trend or market movement will inevitably contribute to another, leading to a constant hive of activity.
For example, decades’ worth of quantitative evidence indicates that during volatile trading periods (often brought on by an unforeseen political or economic event), investors rally to hard assets like gold and oil. This model was played out in the opening weeks of 2020. With military tensions between the US and Iran rising, market demand for gold surged considerably. As a result, its price per ounce reached $1,600 USD on 7th January 2020 – its highest price in nearly seven years.
In the above scenario, investors rallied to gold due to its ability to retain or increase its value in times of market turbulence. This is why it dubbed a ‘safe haven asset’. What’s more, a similar observation can be made when confronted with the opposite scenario.
History regularly demonstrates that during periods of market stability, investors tend to look to stocks and shares. While much more sensitive to sudden movements and shifts, these soft assets also allow investors to leverage growth in different sectors by actively investing in different companies. Investing in stocks and shares can also bring with it the added benefit of dividend and stock repayments.
History regularly demonstrates that during periods of market stability, investors tend to look to stocks and shares. While much more sensitive to sudden movements and shifts, these soft assets also allow investors to leverage growth in different sectors by actively investing in different companies.
For early-stage investors, there is a tendency to think that acting fast when reacting to a sudden market movement can deliver significantly higher returns. While this is true to an extent, it also fails to consider the huge level of risk involved with such a tactic. Professional traders and seasoned investors understand this, which is why they are prepared to take on any losses that could be incurred as a result.
Alternatively, for those using the financial markets as a way of building up solid, long-term returns, engaging in short-term trades is a very high-risk strategy that could incur significant loses. Not accounting for these loses might then result in an investor having to restructure his or her investment portfolio and ultimately change their financial strategy.
There is no right or wrong answer here. High risk, high return investors approach the markets in a completely different manner than low risk, low return investors. Regardless, it is important to identify what type of strategy you’re adhering to and stick with it.
For example, renowned investor Warren Buffet stayed committed to his value-orientated strategy during the 1990s by deciding not to invest in the dot-com boom. In the short-term, he did lose out on immediate gains from tech companies that were increasing in value and size. Yet in the long-term, he also avoided the dot-com crash, where many of the online companies that initially emerged began to crumble.
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The same can be said when faced with a sudden market shock. The key rule to remember here is not to panic but rather trust the financial strategy you have in place. Acting with your heart instead of your mind is never a good idea in the world of investing.
There is ultimately no perfect formula or strategy that is universally applicable to all investors. However, by learning about past events and understanding how different asset prices reacted, there are plenty of underlying lessons that can be taken onboard.
Above all else, creating and adhering to an investment strategy that aligns closely to your financial goals cannot be overlooked. And if you are ever in doubt, be sure to speak with a financial professional.
High Risk Investment Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. For more information please refer to HYCM’s Risk Disclosure.
In a session titled ‘Shaping the Future of Financial and Monetary Systems,’ yesterday, co-founder and CEO of Circle, Jeremy Allaire shed light on the biggest problems the cryptocurrency and wider financial systems are currently facing.
Speaking to delegates in Davos, Allaire highlighted the existence of an arc, by which these systems journey and end up, where we are currently sit in said arc and what we can expect further on. He said: “For the financial system, we are at an inflection point and moving from the periphery to the core. For example, moving away from the likes of just ‘making access better’ to finally visiting the core of financial system — such as, the nature of money, how distributed and utilised.”
He emphasized that since the credit crisis 10 years back, “we’ve seen growth in alternative architecture,” referring to the likes of blockchain, cloud, cryptocurrencies and stable coins. He also pointed out however that for now, the biggest challenge ahead is regulation and policymaking, comparing some of the sector’s struggles to those of other sectors like media and communications.
Stressing the need to drive policy in line with innovation, he said: “None of us would like to go back to a time where we can’t freely communicate with anyone on the planet without any intermediation with some rare exceptions. We all accept as society, trade-offs. [For example] we have open communications but we also accept the fact that terrorists can recruit people on YouTube. We’re not saying shut down YouTube.”
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“The financial system is different to communications and there are identity and risk issues that are real but we have to revisit how those issues are solved — right now it’s the blunt forced mechanism for enforcement which ends up tying to national sovereigns and their policing mechanisms. We have to look for global schemes and technology driven approaches for identity risk that run alongside blockchains and digital currencies,” he said, according to Yahoo Finance.
Analysts had originally predicted that the economy would continue to flatline at 0.1% growth, all the way into November 2019, as had been in previous months. However, the Office for National Statistics (ONS) says the MoM drop happened as a consequence of fall shorts in the production and services sectors. A fall in the pound has consequently led to overall pessimism when it comes to a pending recession.
31st January is the official Brexit deadline, and somehow the UK has managed to avoid recession, but slow growth is pushing the UK in this direction.
In an interview with the Financial Times, Gertjan Vlieghe, of the BoE Monetary Policy Committee, said he would vote for lower interest rates if data doesn’t show the economy picking up. Markets commentators also believe increasing hints that the Bank of England will cut interest rates is likely to prompt investors into overseas financial assets.
Nigel Green, chief executive and founder of deVere Group said: “This is the third senior Bank of England official within a week who has hinted that a rate cut could be imminent.
“In direct response, the pound has come under pressure, as you would expect when relative interest rate expectations change, and it has surrendered its $1.30 level.”
He continued: “The Bank appears to be confused about which risk to fear most.
“Is it a recession and deflation, caused by a no-deal Brexit at the end of this year and decreasing corporate investment over last few years?
“Or is it an overheating economy and inflation caused by a wave of relief if an EU trade agreement is signed that offers minimal disruption to business, combined with a splurge of government borrowing to pay for the Prime Minister’s increased spending plans.”
With UN Secretary-General Antonio Gutterres warning that climate change is about to reach a point of no return - and with Boris Johnson and Nigel Farage empty-chaired for Channel 4’s climate change debate in Novermber – new research suggests the green agenda is gripping the UK investor community. Renewable energy is now a top investment choice for investors of all ages; it is equally popular with men (29%) and women (31%) and it also transcends investment philosophy. For example, active traders, those that are simply looking to make an opportune gain, place as much emphasis on renewables as those investors that act with a specific ethical investment philosophy (33% and 36% respectively).
At a time when the general election and protracted Brexit delays are casting a cloud of uncertainty over what lies ahead in 2020, GraniteShares research suggests economic and political events have powered a greater sense of conviction among investors, with 76% seeing clear investment opportunities to capitalise on. Further, more than a third of UK investors (37%) identified as being in control of their investment decisions, acting with conviction.
Given this UK appetite to amplify their investment edge, GraniteShares asked a nationally representative sample of 1,560 UK investors which sectors they would put their money into if they were looking to make a long-term gain over the next year. After renewables, the most popular sectors were technology (28%), property (25%), and gold (22%). Technology was most popular with younger investors aged 25-34 (31%), whereas property was most popular with the over 55s (33%). Gold was evenly popular across all age groups, a top choice with around one in five investors.
In addition, pharmaceuticals and biotechnology were particularly popular with over 55s (36% and 23% respectively), cannabis was most popular among the over 40s (20%) and oil and gas was top choice among the 25-34s (17%).
With recent warnings that UK car production could plummet with a non-deal Brexit and bleak warmings of the health of the high street for the crucial Christmas season, retail (8%) and auto (7%) along with industrials were the sectors that investors were least interested in putting their money into. With all these sectors, it was older investors (over 45) that were walking away and investing their money elsewhere.
The sectors UK investors would put their money into if they were looking to make a long-term gain over the next year (by age group)
| Investment sector | Total | 25-34 | 35-44 | 45-54 | 55-64 | 65+ |
| Renewable energy | 30% | 31% | 26% | 33% | 35% | 33% |
| Technology | 28% | 31% | 22% | 32% | 30% | 29% |
| Property | 25% | 21% | 31% | 26% | 33% | 28% |
| Gold | 22% | 23% | 21% | 26% | 27% | 10% |
| Biotechnology | 19% | 20% | 16% | 18% | 23% | 22% |
| Pharmaceuticals | 19% | 16% | 17% | 22% | 36% | 25% |
| Cannabis | 17% | 16% | 17% | 20% | 18% | 14% |
| Oil and Gas | 14% | 17% | 15% | 11% | 10% | 15% |
| Banks and Insurance | 14% | 14% | 13% | 9% | 13% | 11% |
| Crypto-Currency | 13% | 20% | 14% | 11% | 3% | 5% |
| E-Commerce | 12% | 14% | 10% | 9% | 15% | 6% |
| Utilities | 11% | 11% | 12% | 10% | 10% | 7% |
| Mining | 9% | 12% | 4% | 8% | 7% | 11% |
| Retail | 8% | 10% | 8% | 5% | 3% | 5% |
| Industrials | 8% | 9% | 3% | 6% | 6% | 7% |
| Auto Industry | 7% | 9% | 10% | 4% | 7% | 4% |
Gold now moves at its highest price since almost seven years ago, while global equities slid among recent political tension involving Iran and the US. The price of Gold shot up as much as 2.3% this week to $1,580 a troy ounce, its highest level since April 2013.
This subsequently boosted shares for manufacturing firms, as Newmont Goldcorp scaled 1.1% and Polyus International advanced 2.3%.
Natasha Kaneva, commodities analyst at JPMorgan, said: “Markets tend to overreact to geopolitics when trading is thin, as it has been during the post-holiday period, but investors are right to fret about what is happening in the Middle East.”
Aditya Pethe, director of Waman Hari Pethe, also remarked however that: “Demand could slow down because of the sudden jump in price, but once it stabilises, people will resume buying.”
Goldman analysts currently believe that Gold may in fact be a better bet than oil at the moment, but it all depends on what happens next in regard to the political situation between Iran and the US.
As well as the issues of cultural and language differences, there are also challenges of positioning yourself successfully among competitors and marketing your brand so that it stands out. However, the main issue that you will have to address is that of your budget. It might be easier than ever to expand your business reach, but that doesn't mean that it comes without costs. Knowing the cost of international expansion makes it easier to get right, and keeps your business safer. If you're considering international expansion, remember to factor in the following expenses.
There are going to be many costs to take into account, but the big three should be your priority. Make sure that you understand:
Take the time to understand how the big three work in your new geographies and your financial planning will be more realistic and much healthier. Never assume that everything is the same from country to country. In some nations, costs will even vary by municipality, so you’re going to need to dedicate some time to some serious and in-depth financial planning.
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While it is possible to start selling your product around the world from your existing office, many countries will require you to have a physical outlet in their country. Knowing the local laws and getting your premises organised before you even start to sell is essential. Renting a property can be a big cost so you need to know if it’s needed. You will also need to decide whether you’re going to hire local workers to run your international branch. That will mean knowing the laws regarding wages and working hours. Look for help from those that can assist you. Companies like INS Global can make sure that you have got your budgeting right when it comes to paying the right minimum wage in China, which can be made very complex very quickly due to different municipalities having different minimum wages. Always find people, services, and resources on the ground and you’ll make it easier to leverage your position in a new market.
One of the main cost considerations that many first-time entrepreneurs overlook is the cost of closure. Not every new business expansion is going to be a success, and it’s not good practise to simply pack up and head elsewhere. A budgeted exit plan is essential, even if it’s something that you end up never needing. You might find in some countries that closing a business is a lot more expensive than opening one, so your research is going to be essential. The last thing that you want is to lose more money than expected through the exit process. That can affect your already established brand security at home, and that’s an unnecessary risk that can be avoided with some simple foresight.
From e-commerce companies that are working from a home office to mega-corporations extending their reach further than ever, accessing the global audience has never been easier. However, as with any business growth, there are inherent risks. Budget is going to be a major factor in terms of your success, so make sure that your research is robust and that you have the finances needed to cover every aspect of your predicted expenses. Get your bottom line right and your international growth will be safer, more natural, and more profitable.
Below Peter Wood, CEO at CoinBurp delves into the current crypto-scene, the value of Bitcoin and the grey cloud that looms over the future of crypto-investment.
Bitcoin saw highs of over £7,000 at the end of October, dropping to just over £5,000 in the early hours of the 25th of November – a 6 month low.
Just as media headlines and finance experts began to offer damning opinions on the declining value of the digital currency, bitcoin skyrocketed – increasing by £600 in value within just six hours.
This is not surprising. In fact, at any given time of the year, a 24-hour cryptocurrency price chart will have more peaks and troughs than a rollercoaster. Therefore, first-time crypto investors should never be concerned about the declining value of their digital finances, as they need only wait a period of time, be it a week or a month, before the value soars again.
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Newcomers to cryptocurrency, or those who have considered investing in cryptocurrency, should do their best to ignore the negative media headlines when Bitcoin suddenly drops in value, as there is quite simply no better time to invest. With any business investment or purchase, the aim is to buy low and sell high. Those who invested in Bitcoin this time last year probably purchased at the value of £2,500 to £3,000; within just seven months, this value more than tripled to around £9,500.
Therefore, investors should never be concerned about the short-term future of their digital finance investment. In fact, one can be optimistic when looking at the fact that, year on year, the tail end value of Bitcoin has grown increasingly higher – thus demonstrating gradual annual growth in the way of higher lows, and possibly even higher highs to come.
A grey cloud that looms over cryptocurrency, however, is what is known as bitcoin halving: this is where the number of bitcoin rewarded to miners for every block mined is cut by half, occurring every time 210,000 blocks are mined. As it stands, the next bitcoin halving is expected to take place in the middle of May 2020.
Much like the short term value of Bitcoin, nobody knows exactly what impact the next bitcoin halving will have on the value of the cryptocurrency – all we can say for sure, is that the next bitcoin halving is expected to have a significant effect on the price of bitcoin, we’re just not certain about whether this ‘effect’ will be positive or negative, upwards or downwards.
Much like the short term value of Bitcoin, nobody knows exactly what impact the next bitcoin halving will have on the value of the cryptocurrency.
If cryptocurrency has set any precedent, however, it’s that low valuations and high valuations are never permanent. If the upcoming bitcoin halving does cause a large-scale crypto crash, you can be rest assured that your money has probably not been lost forever. On the other hand, it could be worth investing in bitcoin at the next affordable opportunity before the halving, in preparation to reap the rewards of a possible soar in value.
I would love to offer specific, short term investment advice on when exactly to invest in cryptocurrency, but the time between me publishing this article, and you reading it, could be the difference of thousands of pounds in any given cryptocurrency market.
Small businesses in the accounting & finance (48%) and manufacturing (45%) sectors are most likely to blame market uncertainty as a barrier to growth. In the agricultural sector, this has traditionally been a more moderate issue but this quarter the sector sees the sharpest rise in concerns over market uncertainty – a relative 48% rise in just six months.
At a time when the CBI has predicted a more positive end of year for business outlook, Hitachi Capital’s Business Barometer asked more than 1,200 small business owners which external factors were holding their business back. It found that 75% of small businesses were being held back by factors that were outside of their control, with market uncertainty affecting three in five. A growing number also cited the falling value of the pound as a big concern in the months ahead, rising from 8% in May to 13% in October.
Although the finance and accounting sector saw the most significant rise in the number of small businesses feeling that growth plans were being held back by market uncertainty, a growing number of businesses in agriculture and manufacturing admit that market uncertainty is a bigger issue now than six months ago (19% to 31% and 33% to 45% retrospectively).
| Market uncertainty | Q2 | Q4 | % rise |
| National average | 31% | 39% | +26% |
| Finance and accounting | 33% | 48% | +37% |
| Agriculture | 19% | 31% | +48% |
| Manufacturing | 33% | 45% | +31% |
| Hospitality | 31% | 38% | +20% |
| Legal | 26% | 35% | +30% |
| Construction | 27% | 33% | +20% |
| Media and marketing | 39% | 44% | +12% |
| IT & telecoms | 36% | 39% | +8% |
Small firms in North East were more likely to say this month that they were fearful of market uncertainty preventing them from growing – rising from 31% in May to 53% this month. They were also the most likely to admit that volatile cash flow and red tape acted as significant barriers to growth compared to the national average (23% vs. 14% and 21% vs. 16%).
The research from Hitachi Capital also suggests that the young and most established businesses are most worried about protracted market uncertainty. For enterprises that have been trading for 5 to 10 years, concerns have risen from 29% to 42% - and for those who have been trading for 35 years or more market uncertainty fears have rose from 29% in May to 48% in October.
Gavin Wraith-Carter, Managing Director at Hitachi Capital Business Finance said: “With the upcoming General Election, it seems highly unlikely that there will be a clear position on Government policy or Brexit until after the Christmas break. For many small businesses this will mean planning for a New Year with lots of unknowns as market factors. This could play out with us seeing dip in business confidence at the start of 2020 although, longer term, when the sector has greater certainty to plan against we envisage small businesses will be the first to see change as an opportunity to grow and diversify.”
“One of the remarkable findings from our research over the last year is that, overall, there has been little change in the perceived barriers that small businesses feel they have to overcome to grow their business. Despite a period of unprecedented market volatility and political uncertainty, there has been no significant rise in the proportion of businesses citing red tape, cash flow or access to labour as bigger issues than they were a year ago.
