Bitcoin barely moved over the past seven days while Ethereum saw an increase in price by 4.9%. Avalanche recorded a 21.31% increase week-over-week, following its listing on Robinhood on August 8 alongside Stellar. Other outliers from this past week are Chainlink and Polkadot, each recording an increase of 19.7% and 16.27% respectively, in addition to Binance Coin whose price increased by almost 14%; all on the back of developments which we will delve deeper into further in this newsletter.
Key Takeaways
• New bipartisan bill wants to hand jurisdiction over BTC and ETH to CFTC • Wallet addresses holding 100 ETH or more increase ahead of Merge • USDT, FRAX to honor redemptions on new POS ETH chain, won’t support POW fork • Gaming dApps account for 60% of all blockchain activity in July • Multiple ETHPOW forks are expected to launch post-merge
Macro, Regulations; Spot, and Derivatives Markets
Bank of England raised interest rates to 1.75% in the biggest increase since 1995, while estimating inflation to peak at 13.3% in October. July’s US inflation data is scheduled to be released on August 10 and the next Federal Reserve meeting is slated to take place on September 21.
In its earnings report, Microstrategy reported a $918M impairment charge on its Bitcoin holdings in Q2, compared to $414.2M for Q2 of 2021. On the back of that news, former CEO of Microstrategy Michael Saylor stepped down to assume the role of executive chairman to focus primarily on innovation and long-term corporate strategy, while continuing to provide oversight of the Microstrategy’s Bitcoin acquisition strategy as head of the Board’s Investments Committee.
A new bipartisan legislation wants to hand the regulatory authority over Bitcoin and Ethereum to the Commodities Futures Trading Commission (CFTC). There has been a long dispute in Congress over whose place it is to regulate cryptoassets, the Securities and Exchange Comission (SEC) or the CFTC. The Digital Commodities Consumer Protection Act of 2022 grants the CFTC ”exclusive jurisdiction” over cryptocurrency trades that meet commodities law. Aiming to bring more clarity into the space, the bill aims to introduce a new term “digital commodity,” leaving it up to the CFTC to define.
The SEC charged 11 people linked to Forsage for fraud, calling the decentralized smart contracts platform a textbook pyramid scheme. A few days later, documents were leaked to the public showing that the SEC had open cases on all US-based crypto exchanges, along with Binance. More law enforcement that took place last week:
• New York State Department of Financial Services marked its first crypto law enforcement action by fining Robinhood $30M for violating cybersecurity and AML laws, an event the company has been expecting since last year. • Celsius is facing a lawsuit from over 300 of its custody clients claiming rightful ownership of $180M of firm’s assets locked in bankruptcy proceedings. • Portuguese banks closed accounts of crypto exchanges, on the back of “suspicious transactions.”
Senator Elizabeth Warren of Massachusetts wants Office of the Comptroller of the Currency to rewrite guidelines permitting banks to hold reserve-backed stablecoins like USDC and USDT. Meanwhile, the European Central Bank called stablecoins and Bitcoin problematic while calling central bank digital currencies a “holy grail” for cross-border payments in a report published earlier this month.
On-chain Indicators
Figure 1: Lightning Network Capacity
Source: Glassnode
The Lightning Network, which allows for near-instant transaction finality, has almost 4.5K BTC in its capacity, which means over $100M are ready for peer-to-peer payments on the Bitcoin blockchain network. That is 500 more BTC since June.
Figure 2: Addresses with 100 ETH or more
Source: Glassnode
Ethereum is leaving 2018 levels in terms of wallets holding 100 ETH or more. Over the past week, wallets holding 100 ETH or more have increased by more than 200.
Our Director of Research Eliezer Ndinga was featured on Blockworks to talk about price developments and market sentiment. You can read more here.
In other news, our very own research associate Carlos Gonzales was featured on Forbes to discuss Litecoin. You can read more about it here.
Last but not least, we’re thrilled to welcome Sherif El-Haddad as 21Shares’ first Head of Middle East Sales as we expand into new markets. You can read more here. News
Tornado Cash Just Got Banned in the US
What happened?
The US Department of Treasury banned Tornado Cash, a decentralized protocol used to obfuscate the trail of transactions for privacy, for facilitating the laundering of the proceeds of cybercrimes, according to the statement. The US Treasury said that Tornado Cash has been used to launder more than $7B worth of cryptoassets since it launched in 2019. That figure amounts to the total value of cryptoassets that have been sent through Tornado Cash since launch.
Why does it matter?
The move comes after the US Treasury linked the $600M+ Ronin Bridge exploit to North Korean cybercriminal Lazarus Group, which sent approximately $80.3M worth of ETH through Tornado Cash, according to blockchain analytics firm Elliptic.
Back in July, Chainalysis revealed that 10% of all funds coming from illicit addresses are sent to crypto mixers, such as Tornado Cash and Blender.io which has been recently sanctioned earlier by the US on the back of the infamous Axie Infinity hack.
Tornado Cash announced in April that it’s using Chainalysis’ oracle contracts to block wallet addresses sanctioned by the US. ”Maintaining financial privacy is essential to preserving our freedom; however, it should not come at the cost of non-compliance,” said the Tornado Cash team.
Nasdaq 100-indexet följer de 100 största aktierna noterade på Nasdaq-börsen. De utvalda företagen kommer huvudsakligen från sektorer som hårdvara och mjukvara, telekommunikation, detaljhandel och bioteknik – inklusive alla stora amerikanska teknikföretag. Däremot ingår inte företag från energi-, finans- och fastighetssektorerna i Nasdaq-100. Vilken är den bästa fond som följer Nasdaq-100?
I USA har den populära QQQ ETF, som spårar Nasdaq 100, varit tillgänglig sedan 1999. Den förvaltas av Invesco. Den europeiska motsvarigheten till denna ETF använder tickersymbolen eQQQ. Till skillnad från den amerikanska marknaden finns det dock flera ETF-leverantörer i Europa som spårar Nasdaq 100 – så det är värt att jämföra.
ETF-investerare kan dra nytta av värdeökningar och utdelningar från Nasdaq 100-beståndsdelarna. För närvarande spåras Nasdaq 100-indexet av tretton ETFer.
Förvaltningsarvode fond som följer Nasdaq-100
Nedan har vi listat förvaltningsarvoden för fond som följer Nasdaq-100. Samtliga dessa ETFer har en konkurrenskraftig prissättning, allt från AXA IM Nasdaq 100 UCITSETF USD Acc, som debiterar sina andelsägare 0,14 procent per år till iShares Nasdaq 100 UCITSETF (Acc) som tar ut 0,33 procent i arvode. I jämförelse kostar de flesta aktivt förvaltade fonder mycket mer avgifter per år.
Som alltid vill vi påminna att om det finns flera olika börshandlade fonder som täcker samma index eller segment är det förvaltningskostnaden som avgör. Antar vi att dessa Nasdaqfonder ger samma avkastning kommer den som har lägst avgift att utvecklas bäst, allt annat lika. Grundregeln är alltså, betala aldrig för mycket då detta kommer att äta upp din avkastning.
Nasdaq 100 ETFer i jämförelse
Förutom avkastning finns det ytterligare viktiga faktorer att tänka på när du väljer en Nasdaq 100 ETF. För att ge ett bra beslutsunderlag hittar du en lista över alla Nasdaq 100 ETFer med detaljer om vinstanvändning, fondens hemvist och replikeringsmetod.
Samtliga dessa ETFer är europeiska börshandlade fonder. Dessa fond handlas på flera olika börser, till exempel Deutsche Boerse Xetra och London Stock Exchange.
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.
India’s vibrant economy and structural growth opportunities continue to be the envy of many emerging markets. But somewhat unique to this market are tax implications that investors should be aware of. Our Franklin Templeton Global ETF team examines these structural issues in Asia’s third-largest economy.
In merely a decade, India has taken a quantum leap from the world’s 11th largest economy to become its fifth largest. By many accounts, it is expected to remain one of the world’s fastest-growing major economies over the coming years. And even after a banner 2023 during which the country’s benchmark indexes surged and Indian Prime Minister Narendra Modi celebrated high-profile successes—from historic technological and space exploration achievements to rising global diplomatic clout—this election year has already marked more progress in supporting Modi’s pro-growth, pro-jobs efforts.
The world’s most populous nation has advanced ties with Western countries over free trade. In addition to agreements with Australia and the United Arab Emirates, it has worked to better integrate the “Global South’s” development needs and ambitions with that of the G20. Modi has touted innovative partnerships for a new multilateral rail and sea corridor to connect India with the Middle East and the European Union (EU)—seen as a counterweight to China’s vast Belt-and-Road infrastructure corridor.
India reached its latest notable trade pact, nearly 16 years in the making, in March with the European Free Trade Association—Iceland, Liechtenstein, Norway and Switzerland. The agreement lifts Indian tariffs to secure US$100 billion in foreign direct investment commitments from the non-EU markets to India across multiple sectors.
With India still an enviable investment powerhouse, it seems important to clarify a few aspects of this dynamic equity market.
How exchange-traded funds (ETFs) treat India capital gains tax (CGT)
Foreign investors should be aware that CGT is an integral part of investing in Indian equities that cannot be circumvented. Investors in India funds are subject to CGT implications regardless of fund provider, and CGT is based and calculated on a fund as a whole, not an individual investor’s position.
The details: Foreign investors owning local Indian stocks are subject to taxation on capital gains at a short-term rate of 15% for positions held for less than one year and at a long-term rate of 10% for positions held over one year.
To accrue or not to accrue: Consistent with market practice for US-listed India ETF providers, Franklin Templeton accrues unrealized CGT in its daily net asset value (NAV). This can lead to differences in performance relative to the benchmark, which does not include CGT. As a result, rising markets will typically lead to fund underperformance against a benchmark, while weaker market environments will typically generate outperformance (provided the fund is in an unrealized capital gain position where the current market value of fund holdings is above their historical book cost). See chart below.
For UCITS-listed India funds, there is a divergence in methods utilized by fund providers in accruing and reporting CGT. Some do not accrue unrealized CGT in the NAV, but will charge CGT to investors directly at redemption, which we believe leaves investors with a level of opaqueness and uncertainty over their ultimate proceeds. This method also creates an elevated NAV compared to what investors will actually experience. While Franklin Templeton’s approach to CGT may at times lead to a higher tracking difference,1 we believe investors benefit from increased transparency and a more reflective experience.
The magnitude and impact of CGT for a specific fund is heavily dependent on several variables, such as the timing of purchases and sales, performance of the holdings and their volatility, and the size of flows in and out of the fund relative to its assets under management (AUM).
Understanding the impact: The CGT impact to fund performance is driven by the path of returns, timing of individual lots and price points. Very broadly speaking, in rising markets, an NAV-accruing fund will likely underperform its benchmark and vice versa.
Consideration of comparability: Because different providers handle CGT differently, the comparability of fund performance metrics may be affected. As investors, it’s prudent to consider how these nuances may influence investment decisions within the broader context of your financial strategy.
The bigger picture: While CGT considerations are important, they should be viewed within the broader spectrum of investment objectives and risk tolerance. Taking a long-term perspective and being mindful of other important characteristics of the investment vehicle of choice may aid in the decision-making process.
In summary, India remains an attractive investment destination with compelling growth prospects for its equity markets. Investors seeking India allocation through an ETF should be aware of the current tax regime and what varying methods of accounting methodologies really mean for fund valuation.
Xtrackers II Target Maturity Sept 2033 EUR Corporate Bond UCITS ETF 1D (XB33 ETF) med ISIN LU2673523564, försöker följa Bloomberg MSCI Euro Corporate September 2033 SRI-index. Bloomberg MSCI Euro Corporate September 2033 SRI-index följer företagsobligationer denominerade i EUR. Indexet speglar inte ett konstant löptidsintervall (som är fallet med de flesta andra obligationsindex). Istället ingår endast obligationer som förfaller mellan oktober 2032 och september 2033 i indexet (ETF kommer att stängas i efterhand). Indexet består av ESG (environmental, social and governance) screenade företagsobligationer. Betyg: Investment Grade.
Den börshandlade fondens TER (total cost ratio) uppgår till 0,12 procent p.a. Xtrackers II Target Maturity Sept 2033 EUR Corporate Bond UCITSETF 1D är den enda ETF som följer Bloomberg MSCI Euro Corporate September 2033 SRI-index. ETFen replikerar det underliggande indexets prestanda genom samplingsteknik (köper ett urval av de mest relevanta indexbeståndsdelarna). Ränteintäkterna (kupongerna) i ETFen delas ut till investerarna (Minst årligen).
Denna ETF lanserades den 8 november 2023 och har sin hemvist i Luxemburg.
Bloomberg MSCI Euro Corporate SRI PAB Index syftar till att spegla resultatet på följande marknad:
Minsta utestående belopp på 300 miljoner euro per obligation
Endast obligationer utgivna av företag med en MSCI ESG-rating på BBB eller högre och en MSCI ESG Impact Monitor över 1 ingår
Indexet övervakar absoluta växthusgasutsläpp (“GHG”) genom att sätta en initial 50 % avkolning av absoluta växthusgasutsläpp i förhållande till moderuniversumet följt av en årlig 7 % avkolningsbana för absoluta växthusgasutsläpp.
Obligationer utgivna av företag som är involverade i alkohol, tobak, hasardspel, vuxenunderhållning, genetiskt modifierade organismer (GMO), kärnkraft, civila skjutvapen, militära vapen (inklusive minor, klusterbomber, kemiska vapen) är undantagna.
Handla XB33 ETF
Xtrackers II Target Maturity Sept 2033 EUR Corporate Bond UCITSETF 1D (XB33 ETF) är en europeisk börshandlad fond. Denna fond handlas på Deutsche Boerse Xetra.
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.