21Shares Research Newsletter - Issue 110

Market Outlook

This past month, Bitcoin experienced its third-worst monthly return of -35.56%, which performed slightly better than some of the most notable bear markets in history in 2012 and 2018, as you can see on the chart below.

The concern over a crackdown on bitcoin mining and trading activities in China has softened both the spot and leverage trading appetite within the crypto market. The daily spot volume is down by 40% over the past seven days, but we are witnessing fundamental buying pressure from long-term investors representing more than 50% of the investor base. As such, Bitcoin is up 11% since the lowest price point of these past two weeks of $32K.

In the same vein, service providers and corporations outside China continue to embrace crypto innovation and recognize its potential. Today, the Reserve Bank of India (RBI) has changed its tone regarding crypto businesses by advising banks not to rely on a statement restricting banking services to crypto companies. In addition, Coinbase just integrated its credit card with Apple Pay and Google Pay, making crypto payments available to millions of locations around the world and allowing customers to earn up to 4% back in crypto rewards.

Finally, the crypto market will continue to move along its adoption lifecycle with significantly less leverage trading and more fundamental traction as mentioned above. At 21Shares, we believe Ethereum (+247% YTD) will be the catalyst of this continued growth, coming from the decentralized finance sector and fostered by the upcoming scalability solutions and the merger to proof of stake. The latter will help remove environmental concerns over the crypto network. For the record, Ethereum has surpassed Bitcoin in terms of transaction volume, and this pattern is here to stay.

Weekly Returns

The returns of the top six crypto assets over the last week were as follows — BTC (-2.50%), ETH (0.09%), BNB (3.17%), XRP (6.92%), and ADA (12.26%).

Monthly ETP Returns

The performance of our line of ETPs over the last 30 days is as follows: ABTC (-32.89%), AETH (-2.82%), ABCH (-19.57%), AXRP (-35.80%), ABNB (-40.55%), AXTZ (-33.63%), HODL (-28.02%), ABBA (-26.70%), KEYS (-24.79%), SBTC (37.04%), ADOT (-34.45%), AXLM (-22.67%), AADA (17.12%).

Media Coverage

We are pleased to announce that we have chosen CryptoCompare as our crypto data service provider for settlement pricing for all of our single asset ETP. The daily delivery of high-quality data to the market is paramount to ensuring market participants can correctly price with confidence the liquidity profiles investors demand in actively growing crypto markets. Read the full press release here.

Frankfurt School of Finance & Management hosted a panel on the implications regarding the institutional and corporate adoption of Bitcoin. Our Head of Switzerland, Sina Meier, participated in this talk delving into the advantages and opportunities this asset class provides. Give it a listen here.

Our Head of Southern Europe, Massimo Siano, appeared on Morningstar where he discussed the advantages of our ETPs compared with purchasing cryptoassets directly on crypto exchanges. Give it a listen here.

Last week’s research note written by our Research Lead, Eliézer Ndinga, featured in Wall Street Italia. Read the full article here.

News - ETF Express: 21Shares Lists Bitcoin and Ether ETPs on Euronext Paris

What happened?

We are excited to list three of our ETPs namely – bitcoin, ether, and short bitcoin – on the regulated market of Euronext Paris today.

We are assisting a first in France: the listing of liquid, secure, 100% collateralized financial products backed by Bitcoin and Ethereum (respectively +28.33% and +264.41% since 1 January 2021). Since our world-first product launch in November 2018 (crypto basket HODL ETP), we have continued to build our unique expertise in the cryptoasset industry and has made available to investors the largest and most diversified range of crypto trackers in the world, consisting of 14 ETPs and providing research and educational materials on our research portal.

Why does it matter?

As well as Paris, various other European regulated exchanges have welcomed our crypto ETPs. Investors can benefit from exposure to cryptoassets without being held back either by the complex storage process or by the regulatory constraints that apply to crypto asset trading applications. Instead, they can access an ETP following the daily performance of bitcoin, daily inverse bitcoin or ether. The latter has performed spectacularly well and have been very popular with institutional investors.

This new development salutes France's support for blockchain, in particular the efforts of the regulatory authorities to promote the blockchain, fintech and cryptocurrency industry in France recently discussed by French media and the French government.

Laurent Kssis, our Managing Director said: "We are delighted to offer to French investors products that have proven themselves in other European markets where we have listed them in Switzerland, Germany and Austria so far and have gained support due to their institutional-grade structures and assets growth. These conventional ETPs will allow investors to diversify their portfolios by adding assets that we believed in before many others, and that we believe are essential in successful portfolio allocation."

Ophelia Snyder, our co-founder and president added: "1 June is a milestone for 21Shares, for investors and for France, a country that our French-speaking teams know very well and that we value. We welcome Euronext's leadership in promoting access to this new asset class using 21Shares under the best conditions of accessibility, transparency and cost."