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What’s Happening with UST?
Publicerad
2 år sedanden
The overall cryptoassets market trickled down to 1.22T in market cap over the past week. On May 4, the Federal Reserve raised its benchmark interest rate by half a percentage point in response to inflation pressures. In response, Dow Jones Industrial Average and Nasdaq Composite fell by 3.12% and 5% respectively the day after. Bitcoin and Ethereum dropped by 54% and 50% since their all-time highs in November 2021.
Thanks to a Bitcoin-backed loan, MicroStrategy holds around 129,218 Bitcoins, acquired at an average price of around $30.7K per Bitcoin. If Bitcoin dips to below $21K, the software analytics company will either have to sell some of its holdings backing the loan or deposit more Bitcoin as collateral. Tesla on the other hand is at a greater loss, holding around 43,200 Bitcoins, acquired at an average price of $34K.
Figure1: Bitcoin’s buying and selling movement over the years
Source: TradingView
The bear case here is if these large institutional investors decide to dump their BTC holdings, we speculate that the price might dip to around $20K. However, this isn’t a new drill for Bitcoin’s price movement over the years. The first time Bitcoin’s price dropped by half was in February 2018, going down to $8K after crossing the $19K mark in December 2017. It took Bitcoin two calendar years to recover. However, in the following years, recovery time shrunk to just a few months. As the market stands, the leverage accelerating recovery could be spotted in the increasing institutional adoption of crypto, especially Bitcoin. We can safely reckon recovery to take place within the next quarter.
Regulations and Adoption
Argentina’s central bank made a decision to ban crypto trading on the back of the alleged pressure from the International Monetary Fund, which gave the country a $44B relief package back in 2017. This decision comes just a few days after Argentina’s biggest private bank, Banco Galicia, decided to add crypto trading. Uganda is also enforcing a countrywide crackdown this week on digital payment providers facilitating crypto transactions.
Nigeria is upgrading its central bank digital currency (CBDC) eNaira to be used on a wider range of goods and services. On the other hand, Nigeria’s central bank is also tightening its grip on cryptoassets, crippling the country’s fintech sector, according to a UN report.
On a higher note, the Japanese eCommerce website SBI Motor Japan announced it will start accepting Bitcoin and Ripple for its automotive sales. This will mark the first time Ripple would be deployed on a cross-border e-commerce website in Japan. On May 4, when Bitcoin was trading at $38K, Gucci announced it will accept crypto payments in some US stores at the end of this month and plans to extend the pilot to all stores in North America.
In a win for DeFi adoption, Jane Street took out a $25M loan in USDC from BlockTower Capital through Clearpool, a decentralized capital markets provider built on Ethereum. Clearpool enables institutions to borrow uncollateralized loans via a network of lenders and is backed by venture capital firms, including Arrington Capital and Sequoia Capital.
DeFi and NFTs
Algorithmic stablecoins are getting battle-tested as Terra (UST), the largest in the market, lost its peg last week, dropping to $0.66 on May 10 and to as low as $0.3 the following day. The Luna Foundation Guard plans to lend $750M worth of Bitcoin and 750M UST to market makers to bring UST back to its peg. Read our statement on UST and LUNA to learn more.
Figure 2: UST’s 7-day price performance
Source: CoinMarketCap
Despite the bloodbath in the market last week, developments in the realm of DeFi are still coming strong. Tron’s new algorithmic stablecoin USDD has officially gone live on the blockchain. Tron is collateralizing $10B in bitcoin and other cryptocurrencies to support USDD. The new stablecoin will be available on Ethereum and BNB Smart Chain.
Polkadot also launched XCM, a new cross-chain communications protocol aiming to eliminate the need for complex bridging procedures that have cost the crypto industry billions in cyber attacks. Being as secure as Polkadot’s core hub, the Relay Chain, XCM will allow communication between parachains and smart contracts.
Decentralized oracle network Chainlink is partnering with LaProp, a tokenized real estate platform serving the property market in Latin America. Leveraging Chainlink Keepers’ node operators’ track record in securing billions of dollars invested in DeFi markets, LaProp will allow investors to buy tokenized shares in various real-world properties, yielding a percentage of income from rental payments. Chainlink Keepers is a decentralized automation service that carries out tasks for smart contracts on the BNB Chain.
On the NFTs front, Instagram is testing out NFTs this week through select content creators in the US. The supported blockchains for showcasing NFTs on Instagram are Ethereum and Polygon. In other news, Dubai’s Virtual Asset Regulatory Authority (VARA) unveiled its headquarters in the metaverse, making it the first governmental entity in The Sandbox.
Weekly Returns
The returns of the top five cryptoassets over the last week of May 3 to 10 were as follows — BTC (-18.63%), ETH (-19.27%), BNB (-21.4%), SOL(-25.95%), XRP (-18.23%).
Net Inflows per 21Shares ETP
The net outflows of our ETPs amounted to $20M in the past week of May 3 to 10. Find the breakdown of the inflows and outflows per ETP below.
Media Coverage
We are thrilled to welcome Carl Hagerup from State Street Global Advisors (SSGA) to our ever-growing team as 21Shares’ new managing director for the Nordics and the Netherlands. “The Nordics is an exciting market for 21Shares and we can see that there is an increasing interest from Swedes to invest in crypto assets,” ETF Stream quoted Carl saying. “The natural step for us is to start an expansion in the Nordics and our goal is to continue being an educating thought leader for potential and current crypto investors in both Sweden and the Nordics.”
Our research team has been making headlines this past week. Our very own Research Associate Adrian Fritz was featured in Trend Report for a guest post about the metaverse. Exploring the different verticals and technologies, Adrian also drew a comparison between centralized and decentralized metaverses, namely dissecting Meta and The Sandbox.
Carlos Gonzales, also a fellow Research Associate at 21Shares, was featured in a Forbes explainer article about Litecoin. “While designed to have a faster TPS than Bitcoin, Carlos González Campo, research analyst at 21Shares, says, “Layer-2 solutions on top of Bitcoin like the Lightning Network” have both sped up Bitcoin transactions and potentially diminished the need for Litecoin’s use case as a faster payment network,” the article reads.
News
Binance Joins Elon Musk’s Twitter Acquisition with $500M
What happened?
According to documents filed to the SEC, crypto exchange giant Binance is backing Elon Musk’s $44B takeover of Twitter with a $500M commitment. Other investors include venture capital firm Sequoia pledging $800M, Fidelity $316M, and a16z $400M. ”We hope to be able to play a role in bringing social media and web3 together and broadening the use and adoption of crypto and blockchain technology,” said Binance CEO Changpeng Zhao.
Why does it matter?
Musk had previously said that he would enhance the platform with new features; making the algorithms open source to increase trust, defeating the spambots, and authenticating all humans. A priority on his roadmap would be eliminating the spam and scam bots and the bot armies that are on Twitter. Musk said that if he had a dogecoin for every crypto scam he saw, he would have a hundred billion dogecoin. In theory, this could be great news for Crypto Twitter. Having Binance on board could also encourage other crypto-native stakeholders to be involved in the revamp of the social network to become a safer and more innovative platform for the cryptoassets industry.
Varje vecka kommer 21Shares Research-teamet att publicera sina datadrivna insikter om kryptotillgångsvärlden. Vänligen rikta eventuella kommentarer, frågor och feedback till 21Shares.
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ETC Groups grundare och VD Tim Bevan ansluter sig till Proactives William Farrington för att diskutera Bitcoins extraordinära ökning och Bitcoins rally.
För första gången i sin 15-åriga existens slog Bitcoin ett all-time-high genom att under förra veckan handlas över 72 000 USD, vilket visade upp en anmärkningsvärd ökning med 70 % hittills i år och en veckotillväxt på 9 %.
Bevan pratar om ETF-godkännanden, förväntade räntesänkningar, den kommande halveringshändelsen och FOMOs roll i det senaste rallyt.
Chatten växlar till Storbritanniens omfamning av kryptostödda Exchange Traded Notes (ETNs), vad detta betyder för de underliggande spotmarknaderna och varför vakthundar som begränsar denna marknad till professionella investerare skulle kunna begränsa dess expansionspotential.
På det kommande Bitcoin Halving-evenemanget betonade Bevan dess historiska betydelse för att påverka Bitcoins pris, även om han spekulerade i att dess effekt kan variera med de nuvarande marknadsförhållandena.
Trots förväntningar om volatilitet tyder de bestående principerna för utbud och efterfrågan på att Bitcoins pris är inställt på att behålla sin uppåtgående trend.
Handla BTCE ETC
ETC Group Physical Bitcoin (BTCE ETC) är en börsnoterad kryptovaluta som handlas på Euronext Paris och tyska 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.
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WTEF ETF ger exponering mot amerikanska large caps
Publicerad
8 timmar sedanden
18 mars, 2024WisdomTree US Efficient Core UCITS ETF USD Unhedged Acc (WTEF ETF), med ISIN IE000KF370H3, försöker spåra WisdomTree US Efficient Core UCITS-index. WisdomTree US Efficient Core UCITS-index spårar utvecklingen av en 90 % exponering mot stora amerikanska aktier och en 60 % exponering mot US Treasury Bond Futures med avsikten att leverera en hävstångsposition till en traditionell 60/40-portfölj. De värdepapper som ingår är filtrerade enligt ESG-kriterier (miljö, social och bolagsstyrning).
ETFens TER (total cost ratio) uppgår till 0,20 % p.a. WisdomTree US Efficient Core UCITS ETF USD Unhedged Acc är den enda ETF som följer WisdomTree US Efficient Core UCITS-index. Denna ETF replikerar det underliggande indexets prestanda genom samplingsteknik (köper ett urval av de mest relevanta indexbeståndsdelarna). Utdelningarna i den börshandlade fonden ackumuleras och återinvesteras.
WisdomTree US Efficient Core UCITS ETF USD Unhedged Acc är en mycket liten ETF med 1 miljon euro tillgångar under förvaltning. ETFen lanserades den 10 oktober 2023 och har sin hemvist i Irland.
WisdomTree US Efficient Core UCITS ETF (“Fonden”) strävar efter att spåra pris- och avkastningsutvecklingen, före avgifter och utgifter, för WisdomTree US Efficient Core UCITS Index (“Indexet”). Indexet syftar till att leverera en 90 % exponering mot stora amerikanska aktier och 60 % mot amerikanska statsobligationsterminer för att förbättra den riskjusterade avkastningen för en traditionell 60/40-portfölj.
Varför investera?
Öka den riskjusterade avkastningen för en amerikansk aktieinvestering genom att ge en 90 % exponering mot aktier samtidigt som Sharpe-kvoten förbättras tack vare en ränteöverlagring
Förbättra kapitaleffektiviteten vid tillgångsallokering vilket möjliggör ökad exponering mot icke-kärninvesteringar/diversifierande investeringar
Låg avgift, core equity-lösning som kan komplettera andra aktiva och passiva strategier
ETFen är fysiskt uppbackad och UCITS-kompatibel
Potentiella risker
Även om indexet skapades för att få ökad exponering mot amerikanska aktier med extra diversifiering av obligationsterminer för att potentiellt minska volatiliteten, finns det ingen garanti för att detta mål kommer att uppnås
En investering i aktier kan uppleva hög volatilitet och bör betraktas som en långsiktig investering
Denna ETF innehåller hävstångselement som kan leda till avsevärt förstorade förluster i jämförelse med investeringar som inte innehåller hävstångseffekter
Investeringsrisken är koncentrerad till U.S.A.
Handla WTEF ETF
WisdomTree US Efficient Core UCITS ETF USD Unhedged Acc (WTEF ETF) handlas på flera olika börser, till exempel Borsa Italiana, Deutsche Boerse Xetra och London Stock Exchange. Av den anledningen förekommer olika kortnamn på samma börshandlade fond.
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.
Börsnoteringar
• Cryptoassets pull back after a strong rally as short-term BTC investors are taking profits
• Our in-house “Cryptoasset Sentiment Indicator” has declined significantly and currently signals neutral sentiment
• Meanwhile, large investors continue to accumulate bitcoins as Coinbase BTC on-exchange balances just hit a 9-year low
Chart of the Week
Performance
Last week, cryptoassets pulled back after a strong rallye to new all-time highs. The major catalyst for this latest move appears to be related to short-term investors and smaller wallet cohorts taking profits already. The downside move was also exacerbated by an increase in long futures liquidations as well as a deceleration in fund inflows more recently.
However, overall exchange balances imply that the demand overhang for bitcoins is still very much present and that larger investors continue to accumulate bitcoins at a very large scale. Amongst others, this is visible in Coinbase on-exchange balances that have just touched a fresh 9-year low (Chart-of-the-Week).
Thus, the most recent on-chain data suggest that there is currently a renewed redistribution of bitcoins from smaller to larger wallet cohorts taking place.
All in all, Bitcoin was more or less flat compared to last week. However, there was a significant underperformance of Ethereum vis-à-vis Bitcoin that was most likely related to an open letter of two US senators to SEC chairman Gary Gensler who oppose additional crypto spot ETF approvals by the SEC.
Moreover, the influential Bloomberg ETF analyst Eric Balchunas has also reduced his personal probability of an earlier Ethereum ETF approval in May 2024 to around 35% due to less activity between issuers and the SEC relative to the activity in the run-up to the Bitcoin spot ETF approval. However, he also thinks that an Ethereum spot ETF will ultimately be approved at some later point in the future. The underperformance was also accompanied by accelerating net outflows from global Ethereum-based ETPs.
This comes at a time when Ethereum has undergone the so-called Dencun upgrade which amongst others includes the EIP-4844 that promises to increase scalability and reduce fees on Layer 2s. Some major Layer 2s like Base and Arbitrum have already implemented the upgrade and fee reductions are so far very significant.
This will most likely put Ethereum and ETH Layer 2s in a better position to compete with low-cost and highly scalable chains like Solana.
In general, among the top 10 crypto assets, Solana, Avalanche, and Toncoin were the relative outperformers.
Nonetheless, overall altcoin outperformance vis-à-vis Bitcoin was low compared to the week prior, with only 30% of our tracked altcoins managing to outperform Bitcoin on a weekly basis. This was most likely due to a general decline in risk appetite due to the most recent pull-back in Bitcoin.
Sentiment
Our in-house “Cryptoasset Sentiment Index” has declined significantly and currently signals neutral sentiment.
At the moment, 8 out of 15 indicators are above their short-term trend.
There were significant reversals to the downside in BTC perpetual futures funding rate and the short-term holder spent output profit ratio (STH-SOPR).
The Crypto Fear & Greed Index still remains in ”Extreme Greed” territory as of this morning.
Besides, our own measure of Cross Asset Risk Appetite (CARA) has increased again throughout the week which signals ongoing bullish sentiment in traditional financial markets. This index is currently at the highest reading since July 2023.
Performance dispersion among cryptoassets has declined further due to the most recent correction. However, overall performance dispersion still remains relatively high.
In general, high performance dispersion among cryptoassets implies that correlations among cryptoassets are low, which means that cryptoassets are trading more on coin-specific factors and that cryptoassets are increasingly decoupling from the performance of Bitcoin.
At the same time, altcoin outperformance vis-à-vis Bitcoin was relatively unchanged compared to the week prior with only 30% of our tracked altcoins that have outperformed Bitcoin on a weekly basis. However, there was a significant underperformance of Ethereum vis-à-vis Bitcoin last week.
In general, decreasing altcoin outperformance tends to be a sign of declining risk appetite within cryptoasset markets.
Fund Flows
Overall, we saw another week of record net fund inflows in the amount of +2,862.7 mn USD (week ending Friday) based on Bloomberg data across all types of cryptoassets.
Global Bitcoin ETPs continued to see significant net inflows of +2,856.2 mn USD of which +2,565.7 mn (net) were related to US spot Bitcoin ETFs alone. The ETC Group Physical Bitcoin ETP (BTCE) saw net outflows equivalent to -13.3 mn USD last week.
The Grayscale Bitcoin Trust (GBTC) experienced a significant increase in net outflows of approximately -1246.1 mn USD last week. However, this was also more than offset by net inflows into other US spot Bitcoin ETFs which managed to attract +3,812 bn USD (ex GBTC).
Last week on Tuesday (12/03/2024), US spot Bitcoin ETFs saw the highest daily net inflow since trading launch of above 1 bn USD on a single day. However, since then, we have seen a gradual deceleration in net inflows overall and also a reacceleration in net outflows from GBTC which probably also contributed to the most recent downside move. This was also evident in negative NAV discounts of those ETFs towards the end of last week.
Apart from Bitcoin, we saw comparatively small flows into other cryptoassets last week again.
Global Ethereum ETPs even saw significant net outflows last week of around -56.6 mn USD which represents an acceleration of outflows compared to the week prior. Meanwhile, the ETC Group Physical Ethereum ETP (ZETH) had -0.7 mn USD while the ETC Group Ethereum Staking ETP (ET32) was able to attract almost +20.0 bn USD in net inflows last week.
Besides, Altcoin ETPs ex Ethereum managed to attract inflows of around +24.7 mn USD last week.
Thematic & basket crypto ETPs also experienced net inflows of +38.4 mn USD, based on our calculations. The ETC Group MSCI Digital Assets Select 20 ETP (DA20) saw neither in- nor outflows last week (+/- 0.0 mn USD).
Besides, the beta of global crypto hedge funds to Bitcoin over the last 20 trading remained at around 1.00 which implies that global crypto hedge funds have currently a neutral market exposure.
On-Chain Data
The major catalyst for this latest move appears to be related to short-term investors and smaller wallet cohorts taking profits already. Amongst others, this was very visible in the short-term holder spent output profit ratio (STH SOPR) that spiked to the highest reading since May 2019 on Wednesday last week. So, there was a very significant degree of short-term profit-taking.
However, overall exchange balances imply that the demand overhang for bitcoins is still very much present and that larger investors continue to accumulate bitcoins at a very large scale. Amongst others, this is visible in Coinbase on-exchange balances that have just touched a fresh 9-year low (Chart-of-the-Week).
In general, we saw record net outflows from exchanges last week. Both Coinbase and Bitfinex, which is known to be an exchange for larger investors, saw their highest net outflows of 2024 last week which implies a continued high buying interest for bitcoin.
The highest outflows just happened yesterday (Sunday) which implies that larger investors have accumulated into the most recent price correction.
Meanwhile, smaller wallet cohorts have continued to distribute their bitcoins into the most recent rallye. This is particularly visible in net exchange flows by wallet cohort. While large wallet cohorts in excess of 1 mn USD have seen net exchange outflows of -50.4k BTC over the past 7 days, smaller wallet cohorts have sent around +12.7k BTC to exchanges during the same time period.
This observation is corroborated by the fact that Bitcoin whales have taken around -2,878 BTC off exchanges over the past 7 days. Whales are defined as unique entities holding at least 1k coins. The absolute number of whales also continues to grow.
Overall, we have seen the highest weekly net exchange outflows in 2024 last week with around -37.6k BTC net outflows over the past 7 days.
Thus, the most recent on-chain data suggest that there is currently a renewed redistribution of bitcoins from smaller to larger wallet cohorts taking place.
The fact that long-term holders have increasingly been distributing bitcoins can be reconciled with the fact that many long-term holders are actually part of smaller wallet cohorts.
Futures, Options & Perpetuals
The most recent downside move from all-time highs was exacerbated by an increase in long futures liquidations as well. Long futures liquidations spiked above 100 mn USD on Friday last week according to data provided by Glassnode.
Nonetheless, both futures and perpetual open interest managed to increase over the past week. Especially CME saw a significant increase in futures open interest despite the most recent rout which implies that CME futures traders, which is dominated by institutional investors, have continued to increase their exposure to Bitcoin.
The futures basis rate has also remained elevated throughout the past correction at around 24.2% p.a.
In the context of the most recent correction, it is worth noting that the weighted Bitcoin futures perpetual funding rate across multiple derivatives exchanges has not turned negative during the most recent correction. However, funding rates have certainly declined to more moderate levels that do not imply excessive risk-taking to the upside anymore.
BTC options’ open interest has also increased last week. The Put-call open interest continued to decline compared to last week and is now at around 0.56 which does not signal a significant appetite for downside protection. Put-call volume ratios also remained relatively low despite the most recent correction.
However, the 25-delta BTC 1-month option skew increased last week signalling higher bids for puts relative to call options.
However, BTC option implied volatilities have come off the highs recorded on Monday last week. Implied volatilities of 1-month ATM Bitcoin options are currently at around 73.6% p.a.
Bottom Line
• Cryptoassets pull back after a strong rallye as short-term BTC investors are taking profits
• Our in-house “Cryptoasset Sentiment Indicator” has declined significantly and currently signals neutral sentiment
• Meanwhile, large investors continue to accumulate bitcoins as Coinbase BTC on-exchange balances just hit a 9-year low
Disclaimer
Important Information
The information provided in this material is for informative purposes only and does not constitute investment advice, a recommendation or solicitation to conclude a transaction. This document (which may be in the form of a blogpost, research article, marketing brochure, press release, social media post, blog post, broadcast communication or similar instrument – we refer to this category of communications generally as a “document” for purposes of this disclaimer) is issued by ETC Issuance GmbH (the “issuer”), a limited company incorporated under the laws of Germany, having its corporate domicile in Germany. This document has been prepared in accordance with applicable laws and regulations (including those relating to financial promotions). If you are considering investing in any securities issued by ETC Group, including any securities described in this document, you should check with your broker or bank that securities issued by ETC Group are available in your jurisdiction and suitable for your investment profile.
Exchange-traded commodities/cryptocurrencies, or ETPs, are a highly volatile asset and performance is unpredictable. Past performance is not a reliable indicator of future performance. The market price of ETPs will vary and they do not offer a fixed income. The value of any investment in ETPs may be affected by exchange rate and underlying price movements. This document may contain forward-looking statements including statements regarding ETC Group’s belief or current expectations with regards to the performance of certain asset classes. Forward-looking statements are subject to certain risks, uncertainties and assumptions, and there can be no assurance that such statements will be accurate and actual results could differ materially. Therefore, you must not place undue reliance on forward-looking statements. This document does not constitute investment advice nor an offer for sale nor a solicitation of an offer to buy any product or make any investment. An investment in an ETC that is linked to cryptocurrency, such as those offered by ETC Group, is dependent on the performance of the underlying cryptocurrency, less costs, but it is not expected to match that performance precisely. ETPs involve numerous risks including, among others, general market risks relating to underlying adverse price movements and currency, liquidity, operational, legal, and regulatory risks.
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