Cryptoassets of the Month: April 2023

Every month, our research team will present the cryptoassets of the month that increased or dropped in value by more than 15%. With a data-driven approach, we highlight the most important developments and events causing price movements.

Figure 1 – 30-Day Performance: Cryptoassets of the Month vs. Traditional Asset Classes

Data Source: 21Shares, CoinMarketCap, and Yahoo Finance, from 31-Mar-2023 to 30-Abr-2023 (Close Price)

Ethereum (ETH)

Ethereum traded up 3.01% over the past month. Since the Ethereum staking contract launched in December 2020, investors who wanted to validate transactions and secure the network had to withstand an indefinite lockup period on their Ether (ETH). On April 12, the Shanghai upgrade was activated, closing the loop on staking liquidity by allowing investors to finally withdraw their locked ETH. Enabling ETH withdrawals has reduced the liquidity risk for investors, particularly institutions. In the past 30 days, investors staked more than 1 million ETH. The inflow was driven mainly by Lido and many institutional-grade staking providers, including Stakefish, Staked.US, Kiln, and Figment.

Bitcoin (BTC)

Bitcoin rose 2.78% in the past month. The banking instability we saw last month continues in the U.S. as regulators seized First Republic Bank and sold its assets to JPMorgan on May 1 in a deal to resolve the largest U.S. bank failure since the 2008 financial crisis. According to an FDIC analysis, the outsized proportion of uninsured deposits relative to historical levels has increased the vulnerability of the U.S. banking system to bank runs. Investors must remember that one of Satoshi Nakamoto's primary motivations for creating Bitcoin was to have an alternative form of money outside central banks' control. At its core, Bitcoin is a non-sovereign form of money suitable to withstand this kind of market environment.

Stellar (XLM)

Stellar's native token XLM traded down 15.57% over the past month. On April 24, investment manager giant Franklin Templeton announced that its Franklin OnChain U.S. Government Money Fund (FOBXX) was made available on the Stellar network through the Benji Investments app. The fund has surpassed $270 million in assets under management (AUM) and already maintains the official record of share ownership via a proprietary solution leveraging the Stellar blockchain. On another note, Stellar Development Foundation CEO Denelle Dixon said that, despite the negative sentiment regarding US crypto legislation, she expects a stablecoin bill to pass this year.

Algorand (ALGO)

Algorand's native token ALGO traded down 19.74% over the past month, underperforming the broader market despite exciting ecosystem developments. Argentinian low-cost airline Flybondi introduced NFT tickets to its customers in collaboration with TravelX on the Algorand blockchain. Customers can buy the NFT tickets via Flybondi's website using just an email (no digital wallet required), with the added benefit of being able to transfer the NFT to any user. As of April 28, more than 100,000 NFT tickets had been bought. In other news, the SEC alleged that ALGO and five other tokens should be deemed securities in a lawsuit against crypto exchange Bittrex filed on April 17.

Stacks (STX)

Stack's native token STX traded down 22.63% over the past month. STX's relative strength index (RSI) was in the "overbought" zone (>70) for most of February and March as the cryptoasset rose by ~300% – after this correction, STX's RSI is now in the 30s, which may indicate that the asset is close to being “oversold.” Stacks is a Layer 2 blockchain that enables smart contracts compatible with Bitcoin infrastructure. Stack's network activity saw explosive growth in recent months thanks to many developments, the most notable being Ordinals, which enabled Bitcoin-native NFTs. Stacks has the potential to expand Bitcoin's use cases beyond a store-of-value asset and, perhaps more importantly, generate greater revenue streams via higher transaction fees for the miners, which will be critical for Bitcoin’s long-term network security.

Strategies of the Month: March 2023

Every month, our research team will also present the best-performing strategies of the month in our product suite. With a data-driven approach, we highlight the most important developments and events causing price movements.

Figure 2: 30-Day Performance: Strategies of the Month vs. Traditional Asset Classes

Data Source: 21Shares Index Management Console and Yahoo Finance, from 31-Mar-2023 to 28-Apr-2023 (Close Price)

KEYS

The 21Shares Bitwise Select 10 Large Cap Crypto ETP (KEYS) rose 1.76% over the past month. KEYS seeks to track the investment results of an index of the top 10 cryptoassets ranked by inflation-adjusted market capitalization. Because Bitcoin and Ethereum's weights in the index represent about 93%, the index's performance tends to be highly correlated with both assets, as was the case over this period. Since the Ethereum staking contract launched in December 2020, investors who wanted to validate transactions and secure the Ethereum network had to withstand an indefinite lockup period on their Ether (ETH). On April 12, the Shanghai upgrade was activated, closing the loop on staking liquidity by allowing investors to finally withdraw their locked ETH.

HODLX

The 21Shares Crypto Basket 10 ETP (HODLX) traded up 1.24% over the past month. HODLX seeks to track the investment results of an index composed of the top 10 largest cryptoassets based on current market capitalization. Bitcoin and Ethereum currently represent ~86% of the index, which explains why the index's performance was correlated with both assets over this period.

HODL

The 21Shares Crypto Basket Index ETP (HODL) traded up 0.93% over the past month. HODL seeks to track the investment results of an index of the top 5 cryptoassets ranked by the 2050 market capitalization. The 2050 market capitalization is calculated using a projected 2050 supply number multiplied by current prices. The index's best-performing assets were Solana and BNB, with a 7.84% and 6.50% performance month-over-month, respectively. Saga, an Android phone leveraging the Solana Mobile Stack, shipped on April 20. Saga has a built-in "Solana dApp Store" and a secure seed vault isolated from Android's operating system for increased security, allowing users to easily self-custody their assets.

BOLD

The 21Shares Bytetree BOLD ETP (BOLD) traded up 0.51% over the past month. BOLD offers volatility-managed exposure to Bitcoin and gold. Gold is the seminal store-of-value asset, used as money since the early days of civilization. Investors tend to buy gold during adverse macroeconomic conditions and inflationary environments. Banking instability continues in the U.S. as regulators seized First Republic Bank and sold its assets to JPMorgan on May 1 in a deal to resolve the largest US bank failure since the 2008 financial crisis. According to an FDIC analysis, the outsized proportion of uninsured deposits relative to historical levels has increased the vulnerability of the US banking system to bank runs. Regardless of the cause, combining Bitcoin and gold may be the best hedging strategy against the banking crisis.

MOON

The Sygnum Platform Winners Index ETP (MOON) rose 0.27% over the past month. MOON seeks to track the investment results of an index composed of the native tokens of the most prominent blockchain protocols, including only the largest network in a family of forks. MOON's weighting methodology goes beyond backward-looking metrics like market cap and liquidity. It also includes early and leading indicators of value creation in the underlying ecosystems, such as developer engagement and public interest via social media.

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