Bitcoin was the standout performer in 2023 gaining an eye-watering +150%. The next halving event is scheduled to take place in April 2024 when the Bitcoin block reward decreases from 6.25 BTC to 3.125 BTC. If history is a guide, the price performance of Bitcoin post-halving tends to be the strongest part of the 4-year cycle. The crypto community is getting giddy again, perhaps rightly so.

Commodities struggled overall in 2023. Crude oil and natural gas prices fell double digits, while industrial metals and agricultural commodities also ended the year in the red. Precious metals were the exception with gold up +10% for the year. Rising interest rates proved a formidable headwind. Given the expectation for a weaker USD in 2024, we expect commodities to deliver much better returns this year.

While there is a positive outlook for cryptocurrencies, commodities, energy and precious metals in particular in 2024, there are a couple of sub-asset classes within the ‘alternatives’ sector where caution exists. Commercial real estate and private equity will continue to face strong headwinds this year. A cut in short-term interest rates may help a little but each market is facing its own set of longer-term structural problems.