The reason behind the depreciation of assets’ value — when will it recover?
Assets are the most promising investment from the beginning of the trade. Time to time assets has gained its value and sometimes it also lost its value. Valuation increase and decrease are commonly stated as appreciation and depreciation.
The spikes in the size of high-profit net individuals, digitalisation and financial growth have led to growth in the historical period. Volatile market conditions increased cyber risk and strict regulations were factors which have negatively affected growth during the historic period. Increasing retirement populations, the growing wealth of high net worth people, rising demand for alternative investments and increasing ETFs will boost growth. In the future, increasing demand for services from Fintech companies and COVID-19 could hinder the growth of the asset management market.
By falling and highly volatile stock markets and increasing credit spreads, the financial markets reacted to the pandemic. The liquidity of many asset classes was greatly reduced, M&A transactions were postponed and the smaller financial markets were temporarily shut. These factors lead to considerable liquidity pressure as investors seek to redistribute or reallocate their holdings. As an answer to this, asset managers have taken important protection measures to ensure that equality among investors is guaranteed by recent decisions by well-known asset managers to gate or suspend unfinished real-estate investment funds.
Trending Cryptocurrency Hub Articles:
1. Blockchain for Dummies in 4 minutes
2. Introduction to Cryptocurrencies: Dogecoin, the Most Bizarre Coin in the Cryptocurrency World
3. Google Enters The Blockchain Sector Through A Partnership
In the unprecedented Coronavirus outbreak, governments around the world advise people to remain indoors and to distance themselves from their society and reduce the spread of the pandemic. The potential growth opportunities for the asset management industry in the short term have decreased. In most countries, the COVID-19 pandemic stopped economic activity. Furthermore, the demand for electricity from industrial and commercial sectors decreased sharply with manufacturing activity worldwide shut down. Due to the crisis of COVID, it is advisable to prioritise hygiene and digitise operations such as billing for manufacturing switchgear companies.
Now, gold, silver, cryptocurrencies, etc are falling from the market status. These assets are experiencing devaluation.
Gold: For gold within one month the asset has lost its track and lost its value. The value dropped from 2030 USD/ounce to 1930 USD/ounce (approx.). Gold depreciates 4.9% approximately. A similar event occurred to silver as well. It lost 6.9% approximately from its one month’s previous value. Most surprisingly the value of the cryptocurrency market has also dropped in one month. Approximately 8.5% of the total market capitalization has decreased in one month. Due to Covid_19 outbreak and lockdown, our assets are losing value. Here are the charts showing the depreciation of value in assets sectors.
There are, however, other significant developments in the background, besides media attention still focused on coronavirus. Because they can greatly influence gold prices, investors in precious metals should know. One of the most important questions of this kind is the rapidly approaching US presidential election. And the polls show that the President in the White House could be changed.
The gold & silver prices, although there are noticeable trends before and after presidential elections, still have to be determined the ultimate impact on gold prices. Many political and social changes could lead to a clash in trend lines which would otherwise be predictable.
Concerning stock markets, the likely impact of the election is hard to say anything concrete. Historically, in election years the volatility of the S&P 500 is higher than in non-election years, as markets frequently take up the likelihood of future government policies. In the immediate post-election election of a Republican president, the markets also have been more successful because the politics of the party are generally seen as more market-friendly. But it is important to notice that this is not a strong thumb rule and that there can be more influence over the market’s direction by other major geopolitical and economic events.
Alongside the border tension between India — China and also China — USA also leads to major fall of assets. While cryptocurrencies are struggling to hold values the gold and silver are facing the same turbulence. So, Covid-19, lockdown, social distancing are may be the major cause for the market’s fall but US election and border policies are playing the string behind shadows. The factors may be overlooked or not noticed but these are the events which always have a major impact on the global stock market. So, it is no surprise that political actions are causing turbulence in the assets sector.
In 2019, a total of almost US$ 656.9 billion came to the global asset management market, which increased by 6.5 percent at the annual compound growth rate since 2015. It is anticipated that the market will decrease from $656.9 billion in 2019 to $598.9 billion in 2020 at the -8.8% rate. The decline is mainly due to lock-in and social distancing standards imposed by different countries and an economic downturn among countries due to the outbreak of COVID-19 and the measures taken to prevent it. It is then expected that the market will recover and grow by a 9.6% CAGR of 788.8 billion dollars in 2021.
Even though the market predicted the appreciation in assets value the current situation is not in hands. Mainly the reason is COVID-19 outbreak which trembles the whole world. Assets are now being depreciated and most likely expected to recover after this year.
Don’t forget to give us your 👏 !
