And the award for villain of the year goes to ...

Photographer: Miles Willis/Bloomberg

Bitcoin Won 2015. Apple ... Did Not

Mark Gilbert is a Bloomberg View columnist and writes editorials on economics, finance and politics. He was London bureau chief for Bloomberg News and is the author of “Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable.”
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This year has been awash with financial and business intrigue and excitement. Here, then, are my awards for the most fascinating stories of 2015, with the added bonus that the qualifying events have implications that will reverberate into 2016 and beyond.

VILLAIN OF THE YEAR -- VOLKSWAGEN

The news that Volkswagen, that exemplar of straitlaced German engineering, has spent years telling what we Brits call "porky pies" about its diesel emissions was a corporate shocker of the highest order. As well as wiping a fifth off the company's market value, the scandal has trashed demand for VW's diesel cars since the U.S. Environmental Protection Agency revealed the deception in September. The company sold just 887 diesel vehicles last month, down from more than 10,000 in July, as shown in this data compiled by Bloomberg Intelligence's Brandon Barnes:

Environmental groups had long suspected that emissions tests were underestimating the nitrogen oxide output of diesel engines. Volkswagen's malfeasance is likely to accelerate the disappearance of diesel powertrains in the auto industry. It may also hasten the disappearance of the internal combustion engine itself, as Toyota expands its efforts to build the infrastructure for its hydrogen cars while Elon Musk's sexy Teslas lead the charge on electric vehicles.

LEMON OF THE YEAR -- APPLE WATCH

I number myself among Apple's fans, with a long (and expensive) history of buying iPods, iMacs, iPads and iPhones on their first, second and then third iterations. (I even owe my first job to a cursory acquaintance with the Apple Mac in the 1980s, back when Microsoft and the PC ruled supreme.) So this year's launch of the Apple Watch was a thoroughly discouraging affair, almost as depressing as the boring film about the fall and rise of Steve Jobs, creator of the world's biggest company.

In fact, the watch, Apple Pay and Apple TV are all disappointments. Chief Executive Officer Tim Cook won't even reveal what demand for the timepiece has been, for fear of giving away valuable market information (his argument) or because the numbers are an embarrassment (I know which explanation I favour). The iPhone contributed 66 percent of Apple's fiscal 2015 revenue, up from 50 percent in 2012; but here's what sales by volume have done in the past year.

Apple shares are set to end the year down a bit from where they started it, meaning they've underperformed the S&P 500 Information Technology index by more than 7 percent after beating it by almost 27 percent in 2014. I'm increasingly of the opinion that Apple is losing its way as a technology innovator. Instead, it's a marketing wizard selling the same product in different wrappings of different sizes -- which leaves it increasingly vulnerable to the shifting tides of consumer taste and market saturation.

ESCAPOLOGIST OF THE YEAR -- GREECE

After months of breath-taking brinksmanship, Greece managed to hang on to its euro membership card. After passing a budget earlier this month, the government now has to reform its pension system, deal with the bad loans crushing its banks, deliver on the sale of state-owned assets, and navigate the thorny issue of debt relief. That's a challenging to-do list. But so far, the government is on track to make good on the promises it's made to its creditors. 

Based on how Greece's bonds are trading in the financial markets (bearing in mind that the government can't borrow fresh money and remains dependent on its official creditors for cash), investors are much more optimistic about the country's chances than they were in the summer, but still not convinced it can stay the economic course:

Source: Bloomberg

Greece leased 14 regional airports to Germany's Fraport earlier this month, an agreement worth 1.2 billion euros upfront and almost 23 million euros a year in concession fees. A couple more deals like this one would see Greece meeting its privatization target of 3.5 billion euros by the end of next year. Moreover, legislators have approved legislation to allow banks to seek external buyers or managers for their bad debts, which comprise about 45 percent of their total loans.

But with a majority of just three in parliament, the risk that Prime Minister Alexis Tsipras will need to go back to his electorate again to reaffirm his mandate early next year is high and rising. Political instability could put Grexit back on the agenda in 2016.

COMEBACK OF THE YEAR -- BITCOIN

Bitcoin was the world's worst-performing currency in 2014, losing more than 57 percent of its value against the dollar. This year, the digital currency extolled by some as a technological escape route from government's snooping into our financial affairs tops the league tables. It's gained almost 40 percent, knocking the Somali shilling into second place, the Gambian dalasi into third, and the Burundi franc to a distant fourth spot:

As things have turned out, it's all about the blockchain technology that underlies Bitcoin. The distributed ledger that keeps track of who owns what is widely touted as the next hot thing in finance. Blythe Masters (famed for inventing credit-default swaps in her time at JPMorgan) even turned down the chance to run the investment bank at Barclays this year, preferring her current perch at Digital Asset Holdings, which is at the forefront of efforts to use the technology to speed up financial transactions reporting.

Consumer banking still looks like it did a decade ago. "There's a big fat moat around banking," former Deutsche Bank CEO Anshu Jain said in October. "That's kept tech at bay."  

That moat, though, is being breached. And the topic of "Fintech" -- the interaction of technology and finance -- will dominate much of the coverage of the banking industry next year. 

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Mark Gilbert at magilbert@bloomberg.net

To contact the editor responsible for this story:
Therese Raphael at traphael4@bloomberg.net