• August was not a great month. Although all eyes are on September rate cuts, we’ll probably see more positive flows in October.
• A rate cut generally bodes well for risk-on assets like crypto, although some factors may overshadow its impact.
• Bitcoin long-term investors accumulated over $8M in August, the biggest monthly change in their stance year-to-date.
• Despite the headwinds, Bitcoin’s fundamentals are growing, offering new precedents for the network.
The Quiet Before the Rate Cut?
Rhyming with historical price movements, August was a slow month for risk-on assets. Equities and cryptoassets took a hit during the first week of August, which exhibited turbulent market conditions instigated by the Japanese interest rates and exacerbated by geopolitical conflicts. Slow recovery followed as macroeconomic data came mostly in line with expectations, setting the stage for a potential rate cut in September.
Reminder: 2024 is the year of the Bitcoin halving. Historically, Bitcoin has only had a positive performance in the fourth quarter of the halving year, as shown in Figure 1 below. This year is different, though, since Bitcoin’s price movement defied historical patterns and climbed to a new all-time high in March, thanks to the liquidity flowing into the new Bitcoin exchange-traded funds in the U.S. Therefore, Q4 this year is fueled with catalysts, with the hype around the presidential elections in the U.S. and the impending breakout of global liquidity as explained in our previous newsletter.
Figure 1 – Bitcoin’s Quarterly Performance
Source: Coinglass
The Fed’s Sentiment
In Jackson Hole, Fed Chair Jerome Powell said it’s time to cut rates, provided the incoming data maintains its current trajectory that inflation is headed in the right direction. The Fed’s favorite gauge for inflation, the Personal Consumption Expenditure (PCE), came in line with expectations, rising by 0.2% in July, indicating that while inflation is improving, it is not entirely out of the woods.
In the lead-up to the Federal Open Market Committee (FOMC) meeting on September 18, we still have some crucial data that would influence the Fed’s decision. With the ratio of vacancies to unemployment returning to its pre-pandemic range, Powell emphasized that they will no longer be seeking cooling labor market conditions. That said, the unemployment rate coming out on September 6 has to be 4.2% or less to shake off recession fears, which have undoubtedly dampened risk-on assets performance this month.
How do we expect crypto to react?
Generally, a rate cut bodes well for risk-on assets, which have historically enjoyed the expansion of the investor appetite as borrowing costs decrease. The last time the Federal Reserve cut rates to weather the pandemic repercussions was in March 2020, when they cut rates by 150 basis points (bps) to reach near-zero levels. The total crypto market cap increased by about 450% towards the end of the year, and Bitcoin’s price surged by 250% during the same period, as shown in Figure 2 below. While the Federal Reserve is anticipated to cut rates by only 25 basis points (bps) in September, the historical context can gauge crypto’s macro sensitivity.
Figure 2 – Rate cuts against Bitcoin’s Performance
Source: Federal Reserve, Coingecko, 21Shares
Bitcoin’s Fundamental Prospects
Bitcoin’s performance in August has been disappointing, dropping by over 9% and ending the month at around the $59K mark, as shown in Figure 3 below. This has been largely due to the aforementioned mixed macroeconomic data, which weighed down market sentiment as many investors grow concerned about a potential recession. As we look forward to the likely 25bps rate cut, the market eagerly awaits more data that could signal an improved outlook. However, while we wait, several fundamental developments in the Bitcoin ecosystem could drive momentum for the asset in the near term.
Figure 3 – Bitcoin Price in August
Source: Coingecko, 21Shares
The network’s leading scalability solution, Stacks, is currently undergoing a significant upgrade, which started on August 28, dubbed ‘Nakamoto.’ The upgrade makes Bitcoin more scalable by anchoring Stacks’ transaction finality to Bitcoin, using a unique mechanism called “Proof of Transfer.” This allows Stacks to handle smart contracts and dApps on a separate layer, effectively increasing transaction throughput without congesting the main Bitcoin network. By settling transactions on the Stacks blockchain and periodically anchoring them to Bitcoin, Bitcoin’s functionality scales without compromising its security or decentralization. A key component of the Nakamoto upgrade is sBTC, a synthetic derivative with a decentralized, two-way peg mechanism with Bitcoin. This feature allows BTC to become a productive asset by being deployed in decentralized finance applications like BTC-based lending and borrowing, which is due to attract a host of new users.
Another significant development is the launch of Babylon Chain, whose phase 1 mainnet went live on August 22. The vision for the highly anticipated protocol allows BTC holders to utilize their idle assets to secure Proof-of-Stake (PoS) systems like Ethereum. Over $9B worth of BTC is being utilized across DeFi in the shape of wrapped Ethereum-based tokens; this sets the stage for how Bitcoin-native liquidity solutions could boost the demand for the asset in the form of additional yield! That said, a Babylon PoS chain will only receive security from the staked BTC in Phase 2 since the first phase merely prepares the BTC assets, which will participate in PoS consensus in subsequent phases. Hence, we might need to wait for the respective phases to be activated for this protocol to translate into real Bitcoin demand.
The above developments are part of a broader trend in the Bitcoin ecosystem, transforming the oldest crypto network beyond its initial peer-to-peer payment use case. Ongoing discussions around re-enabling OP_CAT present another exciting avenue for Bitcoin’s evolution. This would allow for more sophisticated smart contract functionality and multi-party transactions, expanding Bitcoin’s functionality beyond simple peer-to-peer transactions.
Nevertheless, this script was initially disabled due to security concerns, and it may introduce more attack surfaces, which must be managed not to compromise Bitcoin’s security and stability. Similarly, BitVM (short for “Bitcoin Virtual Machine”) proposes a way to achieve Turing-complete computation on Bitcoin, allowing for computational logic to be executed within Bitcoin’s framework. This means more complicated dApps can be built without altering Bitcoin’s core protocol! Bitcoin is becoming a more versatile asset within the on-chain ecosystem, and consequently, the demand for Bitcoin should grow. That said, the effects of these developments are likely to be visible over a longer period, and numerous potential risks must be carefully managed to maintain Bitcoin’s core principles.
Despite the recent sideways performance, long-term holders are showing increased confidence as shown in Figure 4 below. They have accumulated over $8M in BTC in August alone – the highest monthly change in their stance year-to-date. This is likely a result of the anticipated positive performance in Q4, driven by potentially easing macroeconomic pressures and the upcoming U.S. election, which historically catalyze risk assets. Additionally, the growing use cases for the asset are contributing to the increased adoption among long-term holders, who are a key indicator of Bitcoin demand.
Each week the 21Shares Research team will publish our data-driven insights into the crypto asset world through this newsletter. Please direct any comments, questions, and words of feedback to research@21shares.com
Disclaimer
The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction. Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof.
Idag tillkännagav kapitalförvaltaren VanEck ETF noteringen av VanEck Celestia ETN på Euronext Amsterdam och Euronext Paris.
Celestia möjliggör säker skalning av blockchain-applikationer
Modularitet tillåter utvecklare att bygga och skala nya blockkedjor med lätthet
VanEck Celestia ETN är tillgängligt i följande länder: Österrike, Schweiz, Tyskland, Danmark, Spanien, Finland, Frankrike, Italien, Liechtenstein, Luxemburg, Nederländerna, Norge, Polen, Portugal och Sverige
Detta börshandlade certifikat (ETN) gör det möjligt för investerare att delta i utförandet av TIA-tokenet i en investerarföredraget omslag. TIA-token är Celestia-nätverkets ursprungliga kryptovaluta.
Celestia är ett specialiserat blockchain-nätverk designat för att optimera och skala datatillgänglighet, branschens grundläggande skalningsflaskhals. Detta gör det möjligt för utvecklare att enkelt distribuera applikationer i sitt eget blockutrymme med hög genomströmning med full-stack-kontroll.
”Efterfrågan på TIA-token är ett direkt resultat av behovet av Celestias tjänster, eftersom alla interaktioner på Celestia är denominerade och betalda i TIA,” förklarade Menno Martens, Crypto Product Manager på VanEck Europe. ”När fler och fler utvecklare använder Celestias tjänster för att bygga fullstackapplikationer med hög genomströmning, ser vi tillväxtpotential för Celestia.”
VanEck Celestia ETN erbjuder investerare ett reglerat och börshandlat sätt att få exponering för denna innovativa blockchain. Investerare bör dock notera risken för extrem volatilitet i samband med digitala tillgångar.
”VanEcks ETN är ett av de första stegen mot utökad tillgång till Celestia av institutioner”, säger Mustafa Al-Bassam, medgrundare av Celestia och ordförande för Celestia Foundation. ”Snart kommer det att finnas fler sätt att gå med i Celestias ekosystem för alla typer av användare och deltagare.”
Denna ETN spårar MarketVector Celestia VWAP Close Index, som återspeglar priset på TIA-token. Den är helt säkerställd, vilket innebär att de underliggande tillgångarna faktiskt köps och förvaras säkert i kylförvaring. VanEck samarbetar med Bank Frick, ett reglerat förvaringsinstitut i Liechtenstein, för att säkerställa höga standarder för förvaring av kryptovaluta över sina ETNer.
BNPP RICI Enhanced WTI Öl (ER) EUR HedgeETC (B4NZ ETC) med ISIN DE000PZ9REW2, försöker följa RICI Enhanced WTICrude Oil (EUR Hedged)-index. RICI Enhanced WTICrude Oil (EUR Hedged)-index spårar priset på terminskontrakt på WTICrude Oil. Valutasäkrad till euro (EUR).
Denna ETCs TER (total cost ratio) uppgår till 1,20 % p.a. BNPP RICI Enhanced WTI Öl (ER) EUR HedgeETCär den enda ETC som följer RICI Enhanced WTICrude Oil (EUR Hedged)-index. Denna ETC replikerar det underliggande indexets prestanda syntetiskt med en swap.
BNPP RICI Enhanced WTI Öl (ER) EUR HedgeETC är en mycket liten ETC med tillgångar på 0 miljoner euro under förvaltning. Denna ETC lanserades den 7 augusti 2019 och har sin hemvist i Nederländerna.
Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel DEGIRO, Nordnet, Aktieinvest och Avanza.
Xtrackers MSCI Europe ESG UCITSETF 1D (XZEP ETF) med ISIN IE0004ZJGWT9, strävar efter att spåra MSCI Europe Low Carbon SRI Leaders-index. MSCI Europe Low Carbon SRI Leaders-index spårar stora och medelstora värdepapper från Europa. Endast företag med låga koldioxidutsläpp och högt ESG-betyg (environmental, social and governance) beaktas. Moderindex är MSCI Europe.
Den börshandlade fondens TER (total cost ratio) uppgår till 0,18 % p.a. Xtrackers MSCI Europe ESG UCITSETF 1D är den billigaste ETF som följer MSCI Europe Low Carbon SRI Leaders index. ETFen replikerar det underliggande indexets prestanda genom fullständig replikering (köper alla indexbeståndsdelar). Utdelningarna i ETFen delas ut till investerarna (Årligen).
Xtrackers MSCI Europe ESG UCITSETF 1D är en stor ETF med tillgångar på 999 miljoner euro under förvaltning. ETF lanserades den 12 juni 2024 och har sin hemvist i Irland.
Index nyckelfunktioner
MSCI Europe Low Carbon SRI Leaders Index syftar till att spegla resultatet på följande marknad:
Stora och medelstora företag från utvecklade europeiska marknader
Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel DEGIRO, Nordnet, Aktieinvest och Avanza.