21Shares Research Newsletter - Issue 129

Market Outlook

It’s been a relatively quiet week for the top 10 cryptoassets by market capitalization besides Bitcoin (ticker: BTC) and other lower cap cryptoassets. The primary cryptoasset had an outstanding performance of 16% in the past seven days compared with a return of a little over 2% for Ethereum and -4% for Cardano and Binance respectively. Outside the top 10 ranking, there are a few outliers outperforming BTC such as the meme token SHIB (123%), and the Ethereum Killer, Fantom (50%).

• The Shiba Token (ticker: SHIB) is an embryonic experiment that is evolving with a growing community composed of over 700K holders of the token. The recent surge in value is on the back of an upcoming NFT avatar drop happening this week. The name of the NFT is Shiboshis; which will be available on the in-house decentralized exchange of the project, dubbed ShibaSwap. The token required to obtain those avatars is the sister token of SHIB — called LEASH, which will serve as a receipt to grant access to exclusive launches like this upcoming NFT drop.
• Fantom (ticker: FTM) the fastest growing blockchain — grew its assets under management (AUM) or also dubbed total value locked (TVL) by over 200% in the past seven days totalling $7 billion as of writing invested in decentralized financial applications. This peerless growth has been supported by the rising user traction of the cross-chain protocol, AnySwap. The latter represents one of the most needed services to swap cryptoassets across blockchain platforms like Ethereum, Solana, Binance and Fantom with low transaction fees. Another positive integration into the Fantom ecosystem is the blue chip yield-aggregator application, Yearn Finance, which has also expanded its vaults to Fantom last week. This is undoubtedly a testament to the growing acceptance of Fantom as an alternative and complementary settlement layer to Ethereum and a vibrant ecosystem to closely monitor.
• Finally, the Bitcoin rally has been predominantly fueled by institutional capital placing largely more market buy orders than sell orders on the spot market. The buy-and-sell ratio is the following: 54.8% OTC brokers, 54.6% funds and 54.5% family offices (see image below). The speculative appetite has also started to pick up with more than 45% increase in the open interest (OI) of Bitcoin futures reaching $18B in the past 24 hours. As such, the OI is effectively back to levels in January this year when the price of Bitcoin was around $40K or approximately 28% less than today’s value at $56K. This is great news as the bitcoin derivatives market is a lot less over levered than its previous cycle earlier this year — mainly due to two factors, first the China ban and secondly the fact that Binance and FTX trimmed down leverage levels on their platforms or in some cases halting derivatives trading in Europe like with Binance.

Weekly Returns

The returns of the top five crypto assets over the last week were as follows — BTC (11.11%), ETH (-0.02%), BNB (-6.8%), XRP (4.5%), and ADA (-3.2%).

Net Inflows per 21Shares ETP

The net inflows of our ETPs combining $11.34 million in the past week, were as follows: AADA (+$ 5,202,977.03), ABCH (+$ 256,024.49), ABTC (+$ 10,421,866.58), ADOT (-$ 1,952,325.10), AETH (-$ 15,703,593.61), ASOL (+$ 10,750,562.20), AXRP (+$ 323,511.17), HODL (+$ 944,478.61), KEYS (+$604,807.90), SBTC (+$488,133.68) .

Media Coverage

We are so proud to announce that, last Thursday, we have recorded $2 billion in assets under management due to increasing interest from institutional investors and strong inflows from 21Shares Solana ETP (ASOL SE). “We’ve been extremely fortunate to have our business strategy – including our people and product plans – align with market activity to create such unprecedented opportunities. We look forward to continuing to expand and update on our progress over the next few months,” says Hany Rashwan, 21Shares’ CEO and co-founder.

21Shares also just added five more products on Euronext Paris and Euronext Amsterdam; those are 21Shares Binance Coin ETP (Ticker: BNBA FP) and (Ticker: BNBA NA); 21Shares Tezos ETP (Ticker: AXTZ FP) and (Ticker: AXTZ NA); 21Shares Stellar ETP (Ticker: AXLM FP) and (Ticker: AXLM NA); 21Shares Bitcoin Cash (Ticker: ABCH FP and (Ticker: ABCH NA); 21Shares Ripple (Ticker: AXRP FP) and (Ticker: AXRP NA).

In other news, we’ve also joined forces with Copper to provide digital asset custody and staking services to secure the underlying assets of 21Shares’ cryptocurrency ETPs amidst increasing interest from institutional investors. Copper’s award-winning custody, which uses Multi-Party Computation (MPC) technology, creates three separate key shards rather than one private key to largely eliminate the risk of exposure when signing transactions.

Meanwhile on the environmental front, at 21Shares, we’ve been big believers in climate change and how carbon emission control on the institutional level could take leaps towards saving our planet. That’s why at the beginning of this month, 21Shares partnered with myClimate, a Switzerland-based climate protection foundation, to put together a three-phase plan to become fully carbon neutral by 2022.

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News - Swiss Think Tank 2B4CH Pushes for Adding Bitcoin to Federal Constitution

What happened?

2B4CH, an independent non-profit think tank, is preparing for a popular federal initiative that could make Bitcoin one of Switzerland’s reserve assets. 2B4CH is a think tank founded by assisting private and government bodies in addressing the sociopolitical impacts of Bitcoin and its blockchain. The think tank, led by Yves Bennaïm, wants to collect 100,000 signatures to add Bitcoin to the list of assets held by the Swiss central bank. Still at the initiative’s preliminary stage, 2B4CH is currently testing the waters to gauge the potential interest in adding Bitcoin to the federal constitution. After that they’ll pitch the project to the confederation and collect the signatures officially. Bennaïm explained to Cointelegraph that it might take months or even years before the vote is actually put in place.

Why does it matter?

This initiative alone is considered another bullish step towards Bitcoin adoption as a reserve currency, not only on the governmental level, but also grassroots. If 2B4CH succeeded at appealing to 100,000 people in the confederation, conversations would be circulating in Swiss households and workplaces debating on the socioeconomic impact of Bitcoin in the first place, and then reaching national reserves. At 21Shares, we are firm believers in the power of civilized conversations aimed at education and enlightenment. In principle, this initiative could move mountains across Switzerland’s landscape as it is already a widely considered crypto hub with many associations and companies incorporated in the country dubbed as Crypto Valley. In the optimistic case of the vote going in Bitcoin’s favor — contrary to people’s speculation in 2B4CH’s Twitter thread. The Swiss National Bank will need to learn how to add Bitcoin into its reserves in the best and most secure way, which would boost Switzerland’s disposition as the global leader in the industry and in turn bring back soaring prosperity to the Swiss economy.