21Shares Research Newsletter - Issue 99

Market Outlook

Within cryptoasset markets, many with a great deal of trepidation have met the month of March, given the still-recent memories of March 2020. The chart below shows the performance of Bitcoin and the S&P500 from the start of the year till the end of March in 2020.

A year on, the market entered into March 2021 with worries of a simple trend repeating itself — however unlikely. Early on this month, such thoughts were waved away given the strong performance of Bitcoin and the broader cryptoasset markets, even in the face of growth stock sell-offs. The chart below shows the performance of the market this month. Bitcoin even managed to break a new all-time-high price of more than $60,000, though over the last 24 hours, the whole market has sold off due, once again, to over-leverage and (unconfirmed) suspicions of large spot selling.

In this case, the brief sell-off and subsequent recovery were caused by some data-based signals, which suggested that there had been large Bitcoin transfers to Gemini, a crypto exchange, which is a generally-agreed-upon signal of market sell-offs.

The market sold-off quite soon after this signal was released, but further analysis suggests that the transfer was either a normal internal operation movement from Gemini or a transfer from BlockFi (a lending service) to Gemini — not a third-party trader getting ready to sell. Given that this signal was likely not a sign of strong eventual spot selling from a large institution but rather a leverage-driven overreaction, we imagine that the market will quickly rebound to Bitcoin’s previous all-time-highs of $60,000.

Weekly Returns

The returns of the top five crypto assets over the last week were as follows — BTC (2.52%), ETH (-3.50%), BNB (-12.66%), DOT (-10.21%), and ADA (-12.84%).

Monthly ETP Returns

The performance of our line of ETPs over the last 30 days is as follows: ABTC (19.39%), AETH (4.43%), ABCH (-24.25%), AXRP (-9.95%), ABNB (94.92%), AXTZ (-12.18%), HODL (12.07%), ABBA (16.53%), KEYS (10.63%), SBTC (-15.85%), and ADOT (20.07%).

You can learn more about our products here.

Media Coverage

The Financial Times added our latest report, "The Disappearance of the US-based Grayscale Premium Demonstrates the Importance of Europe's Crypto ETPs", as a must-read to its reading list, here, which they entitled “What’s going on with GBTC’s NAV?”. Give the full report a read here.

Have you had a chance to read our Polkadot research primer? Polkadot is the fourth-largest cryptoasset and the closest competitor to Ethereum. Learn more here.

Charles-Henry Monchau, the CIO of FlowBank, wrote a piece on Investir about Binance Coin (BNB). Our 21Shares Binance ETP was featured amongst institutional-grade investment products to get exposure to BNB. Give it a read here.

How has this flood of institutional investments been experienced in Crypto Valley? And what are the prospects for the near future? Find out at our online event on March 30th, 2021, at 11 am CET, where our Head of Switzerland, Sina Meier, will attend as a speaker. Register here.

“The crypto movement is real, and now well-known minds and companies have committed themselves to crypto-assets”, said our CEO, Hany Rashwan and Head of Switzerland, Sina Meier, to 10x10 — a networking platform for investors to share information regarding ETF, Index-Investing, and cryptassets.

Read the full interview here.

Our Head of Switzerland, Sina Meier, appeared on BX Swiss TV in an interview led by David Kunz, COO of BX Swiss, to discuss the most recent adoption of Bitcoin and give the audience an outlook of the major price outbreaks of the asset over the past decade. Give it a listen here.

In case you missed it, FinTech Magazine released its list of the Top 100 Women, and we are proud to announce that our Head of Switzerland, Sina Meier, featured in this list! You can read the magazine here.

News - French Lawmaker Signs Petition to Allow Central Bank to Buy and Hold Bitcoin | Bitcoin News

What Happened?

On March 5th, Francois-Xavier Thoorens, CEO of Ark Ecosystem, launched a petition calling the French government to authorise the Bank of France, the country’s central bank, to buy and hold bitcoin by amending the Monetary and Financial Code (The “code Monétaire et Financier” in French). The petition, hosted on the Senate's website, is live until September 5th this year and requires at least 100,000 signatures to be passed onto the Conference of Presidents to review the matter. So far, it has gathered more than 670 signatures, one of which from a french lawmaker, Jean-Michel BIS, of the National Assembly, the lower house of the French Parliament — who publicly voiced his support on the amendment.

"France cannot decently remain as an observer of a race which has already started. Not owning bitcoin will put it in a financially weak position within 5-10 years. It is urgent to take up the matter." — said Francois-Xavier Thoorens in the petition.

What Does It Matter?

Our year-end review also outlines our predictions for 2021. We have predicted the increased interest and adoption of Bitcoin from conventional financial institutions broadly in the US and Western Europe. This petition is significant, especially with a signature coming from a member of the National Assembly. European countries are culturally and historically known to be more cautious and conservatives when it comes to investing than their neighbours across the Atlantic ocean in North America.

Surprisingly, the crypto market’s adoption from a regulatory standpoint has shown the opposite of this stereotype. For example, in Europe, institutional-grade investment vehicles are listed on regulated stock exchanges functioning like ETFs, such as 21Shares’ ETPs. On the other hand, in the US, most of these vehicles are investment trusts traded over the counter, which lack redemption programs and, as such, are subject to often-large premiums and discounts relative to NAV.

This call to amend the French monetary code is a testament to the growing recognition of Bitcoin as an emerging store of value, the type of adoption we have never seen before, which will continue to attract a wave of new investors outside of the retail cohort. For instance, Goldman Sachs published their survey results, indicating that 40% of their clients have exposure to cryptoassets. At the same time, Bloomberg reported the acceleration of Bitcoin as a replacement to gold in portfolios. Although this petition might not come to fruition as before the French National Assembly’s reviewing phase, the petition requires at least 100,000 signatures. This endeavour, however, sets the tone for how this cycle could be shaped and what we might expect going forward. For the record, the price of Bitcoin is three times its previous all-time high of $19,9K, and at 21Shares, we will closely follow what the future holds on all fronts.

Learn more here.