Bitcoin (BTC) and gold lined up as the outperforming assets in 2024, on a mix of geopolitical uncertainty and still significant inflation. In former years, BTC outperformed, but gold had years of stagnant prices.
Bitcoin and gold are on track to outperform in 2024, standing ahead of other asset classes. Formerly, BTC was almost always ahead of the pack, with the exception of the deepest bear cycles. Often, BTC was also trading in an opposite direction to gold, which was considered a stagnant asset for ‘gold bugs’.
In 2024, however, a mix of global risks is raising both assets, as a hedge against inflation. BTC and gold prices emerged with a much stronger correlation since 2023.
Charlie Biello of the Creative Planning wealth management firm classified a selection of assets, showing BTC and gold took the #1 and #2 spots ahead of the pack. In his blog, Biello pointed out the most active asset classes and their dependence on inflation and cost of living.
BTC and gold outperformed in 2024, a correlation not observed in previous periods. | Source: Charlie Biello
For the first time since tracking the asset classes, both BTC and gold share the top gains. However, seeking out BTC and gold as a source of security was also the narrative in 2020, sparked by the Covid-19 pandemic.
BTC had gains of 302% net in 2020, while gold expanded by 24%, but enough to outpace other asset classes. During bull markets, BTC generally outperforms all other classes and only lags behind during its drawdown periods.
While some of the data suggest cost of living and food inflation are decelerating, BTC and gold still hold their appeal. Wage growth in real terms still has to catch up, but there is demand for assets that outperform the housing inflation.
Gold expects positive performance after Fed eases interest rates
Gold has a historically inverse relationship to gold prices, as a potential store of value. The US Federal Reserve performed a larger-than-expected rate cut of 50 bps, setting the interest rate ceiling at 5%.
BTC and gold both performed better than other asset classes and rallied together. | Source: Newhedge
This is also the first interest rate cut since 2020 when the rate was cut as low as 0.25%. From 2022 to 2024, inflation-fighting rate hikes lifted the rate to its peak of 5.50%, retained for more than a year. Since the year 2000, gold has outperformed after each rate-cutting cycle of the Fed.
After the news of the Fed rate cut and a further prediction of rate easing in 2026, gold briefly touched $2,600 per Troy ounce on the spot market.
When it comes to choosing BTC or gold, the argument from sound money actually sides with BTC. Gold is constantly adding new stock from growing production. The appeal of gold in 2024 is for its potential to rally faster than other assets. At the same time, the BTC price denominated in gold has grown almost constantly.
BTC dipped on selling the news
The BTC market expected a rate cut but did not rally after the actual larger-than-expected easing. BTC dipped again to $59,745.11, mostly due to insider factors and selling pressure.
Bearish traders pressured BTC, with selling orders pushing the price under the $60,000 range. It is uncertain if BTC can perform in a manner similar to the 2020 rate-cut season. However, the rally from lows under $4,000 at that time was much easier, and the rate was near historical lows.
BTC is also pressured by expectations of a weak September close. The leading coin also starts its rallies at around 170 days after each halving event. The current sideways choppy trading is happening 151 days after the halving, setting the more active bull market for October.
BTC is also growing its dominance after the 2022-2024 stagnation. The dominance is now at 57.2% of the total crypto market capitalization. Growing dominance shows funds are mostly flowing into BTC, as the most liquid and reliable asset.
BTC also gains support from the long-term accumulation and taking coins off exchanges. Traders remain cautious due to attempts to attack leveraged positions, but the overall trend is for holding while waiting for a bigger breakout. BTC still faces expectations of rallying to a new high in the last months of 2024.
Cryptopolitan reporting by Hristina Vasileva
In 2024, both BTC and gold outperformed, possibly benefitting from the expectations of easing Federal Reserve interest rates.
Amazon’s journey from a modest online bookstore to the world’s largest online retailer is a narrative of innovation, disruption, and relentless ambition. Today, Amazon dominates the e-commerce landscape, setting the standard for online shopping with its vast product selection, lightning-fast delivery, and customer-centric approach. This article explores the evolution of Amazon’s leadership in online shopping, examining the key strategies, innovations, and challenges that have shaped its rise to the top.
The Early Days: From Bookstore to Everything Store
Amazon was founded by Jeff Bezos in 1994 as an online bookstore, capitalizing on the internet’s potential to reach a global audience. The decision to start with books was strategic; books were easy to ship, did not require much storage space, and had a universal appeal. From the beginning, Bezos envisioned Amazon as more than just a bookstore. His long-term goal was to create the “everything store,” a one-stop-shop where customers could find and purchase anything they needed online.
The initial success of Amazon was driven by its innovative approach to e-commerce. While traditional bookstores were limited by physical space, Amazon offered an extensive catalog of books that was virtually limitless. The company’s early focus on customer satisfaction, with features like customer reviews, personalized recommendations, and a user-friendly interface, set it apart from competitors.
By 1997, Amazon had gone public, and its rapid growth continued. The company began to expand its product offerings beyond books, gradually adding categories like music, electronics, and toys. This diversification was essential to Amazon’s strategy of becoming the go-to online retailer for all consumer needs. The company’s ability to offer a wide range of products, combined with its commitment to customer service, established it as a leader in online shopping.
Innovation and Expansion: The Prime Revolution
One of the most significant milestones in Amazon’s evolution was the launch of Amazon Prime in 2005. For an annual fee, Prime members received free two-day shipping on eligible purchases, a proposition that was revolutionary at the time. The introduction of Prime was a game-changer, transforming customer expectations and further solidifying Amazon’s leadership in online shopping.
Prime was more than just a shipping service; it was a strategic move to create customer loyalty. The subscription model incentivized customers to make Amazon their default shopping destination, as the more they used Prime, the more value they received. Over time, Amazon expanded the benefits of Prime to include streaming video and music, exclusive deals, and other perks, making it an indispensable service for millions of customers.
The success of Prime can be measured by its membership numbers, which have grown exponentially over the years. As of 2024, Amazon Prime has over 200 million members worldwide, a testament to the value it offers. The Prime membership model has been so successful that it has influenced the broader retail industry, with many competitors launching their own subscription services in response.
The Technology Edge: Fulfillment and Logistics
Amazon’s dominance in online shopping is not just a result of its vast product selection and customer-centric approach; it is also rooted in its technological prowess. The company has invested heavily in building a state-of-the-art fulfillment and logistics network, which has been a critical factor in its ability to offer fast, reliable delivery to customers.
Amazon’s fulfillment centers, which are strategically located around the world, are marvels of automation and efficiency. These facilities use advanced robotics, artificial intelligence, and data analytics to manage inventory, process orders, and ship products with unparalleled speed. The company’s ability to deliver products quickly and accurately is a key reason why customers choose Amazon over other online retailers.
In addition to its fulfillment centers, Amazon has developed a vast logistics network that includes its own fleet of planes, trucks, and delivery vehicles. The company’s investment in logistics has allowed it to reduce its reliance on third-party carriers like UPS and FedEx, giving it greater control over the delivery process. This vertical integration has enabled Amazon to offer services like same-day and next-day delivery, further enhancing its competitive advantage.
Moreover, Amazon’s logistics innovations extend beyond its own operations. The company’s delivery service partner (DSP) program has created opportunities for small businesses to operate delivery routes for Amazon, while its crowd-sourced delivery platform, Amazon Flex, allows individuals to deliver packages using their own vehicles. These initiatives have expanded Amazon’s delivery capacity and ensured that it can meet the growing demand for fast shipping.
Expanding the Ecosystem: Marketplace and AWS
Another key component of Amazon’s success in online shopping is its ability to create a comprehensive ecosystem that extends beyond retail. The Amazon Marketplace, launched in 2000, has been instrumental in expanding the company’s product selection and driving revenue growth. The Marketplace allows third-party sellers to list their products on Amazon’s platform, giving customers access to a wider range of goods and enabling Amazon to earn a commission on each sale.
The success of the Marketplace has been staggering. Today, over half of the products sold on Amazon are from third-party sellers, many of whom are small and medium-sized businesses. The Marketplace has also been a critical factor in Amazon’s global expansion, as it allows sellers from around the world to reach customers in different markets without the need for a physical presence.
In addition to the Marketplace, Amazon Web Services (AWS) has played a crucial role in the company’s growth and profitability. Launched in 2006, AWS offers cloud computing services to businesses, allowing them to store data, run applications, and scale their operations with ease. AWS has become the backbone of the internet, powering everything from startups to large enterprises. The revenue generated by AWS has given Amazon the financial flexibility to invest heavily in its retail operations, including its logistics network, Prime, and original content for Prime Video.
Challenges and Criticisms
While Amazon’s leadership in online shopping is undeniable, it has not been without challenges and criticisms. The company’s dominance has raised concerns about its impact on competition, with critics arguing that Amazon’s scale and market power give it an unfair advantage over smaller retailers. There have also been concerns about the treatment of workers in Amazon’s fulfillment centers, with reports of grueling conditions and low wages sparking public outcry and calls for better labor practices.
Amazon has also faced scrutiny over its impact on the environment. The company’s rapid delivery services, which require a vast logistics network, contribute to carbon emissions and environmental degradation. In response, Amazon has pledged to achieve net-zero carbon emissions by 2040 and has invested in renewable energy and electric vehicles to reduce its environmental footprint.
Despite these challenges, Amazon continues to grow and innovate, constantly pushing the boundaries of what is possible in online shopping. The company’s ability to adapt to changing consumer preferences, invest in technology, and create a seamless shopping experience has ensured its position as the leader in e-commerce.
The Future of Amazon in Online Shopping
As Amazon looks to the future, it faces both opportunities and challenges. The rise of new technologies like artificial intelligence, machine learning, and automation will continue to shape the e-commerce landscape, and Amazon is well-positioned to leverage these innovations to enhance its operations and customer experience.
The company is also likely to continue expanding its ecosystem, integrating its retail operations with other services like AWS, Prime Video, and Alexa. This integration will further entrench Amazon in the daily lives of consumers, making it even more difficult for competitors to challenge its dominance.
In conclusion, Amazon’s leadership in online shopping is the result of a relentless focus on customer satisfaction, innovation, and scale. From its early days as an online bookstore to its current status as a global e-commerce giant, Amazon has consistently pushed the boundaries of what is possible in retail. As the company continues to evolve, it will undoubtedly remain a dominant force in the world of online shopping, shaping the future of commerce for years to come.
