Cryptoassets of the Month: February 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-Jan-2023 to 28-Feb-2023 (Close Price)

Decentraland (MANA)

Decentraland (MANA) traded down 16.54% over the past month as activity in the decentralized virtual world dropped significantly. About 4,400 unique wallet addresses interacted with Decentraland throughout February, down ~27% from January. On another note, Decentraland announced it would host its second annual Metaverse Fashion Week event from March 28-31. The event aims to connect emerging digital designers with established fashion institutions like Dolce & Gabbana, Tommy Hilfiger, COACH, and Adidas.

Fantom (FTM)

Fantom's native token FTM traded down 20.46% over the past month, underperforming the broader crypto market. As a small-cap smart contract platform, Fantom has a higher beta. In addition, FTM's relative strength index (RSI) was in the "overbought" zone (>70) for most of January as the cryptoasset rose ~169% – after this correction, FTM's RSI is now back below 50. Regarding ecosystem development, eight projects have already applied for funding from the Ecosystem Vault launched last month via a governance proposal, of which half were already rejected. The other half's prospects also look bleak, with less than a 3% voting turnout average of a 55% minimum agreement required.

Strategies of the Month: February 2023

Every month, our research team will also present the ten 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-Jan-2023 to 28-Feb-2023 (Close Price)

ABBA

The 21Shares Bitcoin Suisse Index ETP (ABBA) rose 4.05% over the past month. ABBA seeks to track the investment results of an index composed of Bitcoin and Ethereum based on market capitalizations. Investors should understand that Bitcoin and Ethereum serve different use cases and can complement each other in a portfolio. The former is positioned as a non-sovereign form of money, while the latter promises to be the foundational infrastructure for the new iteration of internet services.

SPETH

The 21Shares S&P Risk Controlled Ethereum Index ETP (SPETH) traded up 2.25% over the past month. Over the same period, Ethereum traded up 1.22%. More risk-averse investors could be wary that Ethereum's implied annual volatility has consistently exceeded 80%. SPETH's value proposition arises from its rebalancing algorithm, which allows investors to get exposure to Ethereum while limiting the asset's volatility to a target level of 40% by adjusting the exposure to the underlying and allocating to U.S. dollars.

HODL

The 21Shares Crypto Basket Index ETP (HODL) traded up 1.78% 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 and current prices. Bitcoin and Ethereum's weights are currently around 50% and 28%, while Polkadot is the third-largest constituent with a weight of ~14%. Smart contract platforms, like Ethereum and Solana, operate in isolation. In contrast, Polkadot works at a level below (interoperability), supporting a growing ecosystem of specialized blockchains called parachains.

SPBTC

The 21Shares S&P Risk Controlled Bitcoin Index ETP (SPBTC) traded up 1.61% over the past month. Over the same period, Bitcoin increased by 0.03%. More risk-averse investors could be wary of the fact that Bitcoin's implied annual volatility has consistently been above 70%. SPBTC's value proposition arises from its rebalancing algorithm, which allows investors to get exposure to Bitcoin while limiting the asset's volatility to a target level of 40% by adjusting the exposure to the underlying and allocating to U.S. dollars.

KEYS

The 21Shares Bitwise Select 10 Large Cap Crypto ETP (KEYS) rose 1.57% over the past month. KEYS seeks to track the investment results of an index composed of the top 10 cryptoassets ranked by inflation-adjusted market capitalization. Because Bitcoin and Ethereum's weights in the index represent about 92%, the index's performance tends to be highly correlated with both assets, as was the case over this period.

DEFII

The 21Shares DeFi 10 Infrastructure ETP (DEFII) traded up 1.47% over the past month. DEFII tracks the investment results of an index of decentralized applications (dApps) and their underlying infrastructure. The index's best-performing dApp was Chainlink, which appreciated 3.45% over the same period. Chainlink is an oracle, a foundational infrastructure piece that directly brings off-chain data to blockchains, such as traditional asset price feeds or the weather.

HODLX

The 21Shares Crypto Basket 10 ETP (HODLX) traded up 1.42% over the past month. HODLX seeks to track the investment results of an index composed of the top 10 largest cryptoassets based on market capitalization. Because Bitcoin and Ethereum currently represent ~58% of the global crypto market capitalization and ~85% of the index, the index's performance can be correlated with both assets, as was the case over this period.

MOON

The Sygnum Platform Winners Index ETP (MOON) rose 0.24% 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.

USDY

The 21Shares USD Yield ETP (USDY) was flat over the past month. In normal market conditions, USDY provides exposure to USD while using the collateral (USDC) to seek to generate income from the digital asset lending ecosystem via a fully collateralized ETP structure. However, given the market turbulence over the past months, 21Shares ETPs have no loans outstanding, with USDY lending suspended. The U.S. dollar is the world's reserve currency and acts as a "safe haven" during adverse macroeconomic conditions.

LAY1

The 21Shares Layer 1 ETP (LAY1) traded down 0.37% over the past month. LAY1 seeks to track an index comprising the largest smart contract platforms. The weights are proportional to market capitalization, capped at 30% per asset to promote diversification. Ethereum and BNB are currently the largest constituents of the index, each with a weight of ~30%. Regarding Ethereum, the Zhejiang and Sepolia testnets successfully simulated staked ETH withdrawals on February 7 and 28, respectively. Goerli – the most critical public Ethereum testnet – will be the next and final testnet before staked ETH withdrawals are enabled on the Ethereum mainnet.