2017 Market Performance: Crypto vs. Stocks

When looking across the globe, there were plenty of strong performing equity markets in 2017. Nevertheless, none compare to the massive appreciation seen within the cryptocurrency sector.

Warning: If you are primarily an equity investor, you may soon be compelled to enter the world of cryptocurrencies as the relative outperformance of the top cryptocurrencies in 2017, when compared to equity markets, was astronomical.

The top-performing stock market last year (excluding Venezuela with a 3,884 percent gain due to rampant inflation) was Zimbabwe with a 117.7 percent advance, while the top cryptocurrency Ripple, left Zimbabwe in the dust with an eye-popping 28,963 percent return. Ripple ended 2016 at $0.0065 and by Dec. 31, 2017 had risen to $2.25.

By the end of 2017 Ripple has overtaken Ethereum as the second largest cryptocurrency by market capitalization, at $77.1 bln and $72.9 bln, respectively. Although still far behind Bitcoin’s approximately $248.3 bln market capitalization, they are rising fast. The market capitalization of Ripple is up approximately 31,637 percent from a year ago and Ethereum has increased around 1,300 percent. A distant third is Bitcoin, up 447 percent over the past 12 months.

Top stock market performance 2017

As you can see in the following table, Top Stock Market Performance 2017, relatively high returns came from less developed and emerging stock markets such as Argentina with a 77.7 percent return, Mongolia which rose by 68.9 percent, and Kazakhstan, climbing by 59.3 percent. Of course, for most investors, there are barriers to accessing these stock markets. That may be one of the reason’s global investors have taken a liking to cryptocurrencies as they are global, can be accessed and traded 24 hours a day, seven days a week.

Top Stock Market Perfomance 2017

Major developed equity markets

In major developed stock markets, Hong Kong’s Hang Seng Index led the way with a 36 percent return, followed by India’s BSE Sensex 30, up 27.9 percent. The Hang Seng ended December at 29,919.15, close to the high for the year, and the second highest monthly closing price ever, second only to the record high peak from November 2007 of 31,958.41.

Since 2009 low the Hang Seng has been progressing higher in an ascending parallel trend channel. The index is now heading towards the top channel line, which will put it in the area to test resistance around the 2007 highs. That’s only 6 percent or so higher. It’s interesting to note that the Hang Seng has only had one down month during 2017, a testament to its strength.

Stock Market Perfomance 2017 (Major Markets)

India’s BSE Sensex 30 Index ended the year almost 10 percentage points lower than the Hang Seng, but a strong finish nonetheless. The Sensex had a solid close at a record high of 34,057, very close to the year’s high of 34,127.22. December triggered a monthly bullish trend continuation signal and follows a breakout of a two-year base in May. This is very healthy price behavior and supportive of a continuation of the bullish trend. As long as the Sensex continues to progress with a series of high monthly highs and higher monthly lows, further upside is likely.

Chart

The third best performing major stock market index last year was the S&P 500 (SPX), up 19.4 percent to end at 2,674. For the past 13 months the SPX has advanced as much as 29.3 percent, as of the year’s 2,694.97 high, in a sequential series of higher monthly highs and higher monthly lows, all in the face of growing choir of bears, waiting and ready to bounce. This monthly pattern continues to define a strong uptrend.

In addition to ending the year technically strong, in the upper third of December’s high-to-low price range, the close was at a new monthly closing high. When measuring the current advance from the February 2016 swing low, the SPX was up as much as 48 percent as of the recent high.

Can it keep going? Well, the prior rally (swing low to swing high) on a monthly basis, starting from October 2011, saw the SPX increase as much as 99 percent before moving into a prolonged consolidation base period. So far the advance is approximately half of that. By itself, this would indicate more upside potential.

Bottom stock market performance

Of course, not all stock markets were bullish last year, but the worst performers were relatively smaller exchanges. The bottom performing market for 2017 was the Sarajevo Stock Exchange. It ended the year down 18.5 percent to close at 562. Coming in second was the Qatar Exchange Index, with a loss of 18.3 percent, followed by the Karachi Stock Exchange Index, which dropped by 15.3 percent. Qatar, of course, has been negatively impacted by an economic blockade since June spearheaded by Saudi Arabia with support from other Arabian Gulf countries.

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