21Shares Research Newsletter - Issue 49

Market Outlook

Over the last week capital markets, and the crypto asset market especially, has recovered to some extent — surging to a 3-week high due to growing signs that the toll of COVID-19 may be easing. As the chart below shows, major assets — such as the S&P 500, Gold, Brent Oil, and EUROSTOXX — are all up over the last two weeks, with Brent Oil having totally recovered its losses made since March 24.

The toll of COVID-19 is far from over, however, with some claiming that the US is likely to reach the peak level of severity in the coming weeks. In addition, there will likely be longer-term economic consequences caused by the various lockdowns and quarantines across the world — impacts that are likely to be felt by markets over the rest of the year, at least, even when the virus is conquered.

The recent market uptick can also be seen in the recent surge in crypto trading across key exchanges, as reported by The Block. Exchanges such as Kraken, Gemini, Bitfinex, and OKEx have all reported that they’ve seen recent increases in both new user registrations and trading volumes. There is inconclusive data to suggest that this is an industry-wide phenomenon, however. BitMEX’s short and long liquidation amounts are still low — especially when compared to the numbers around the market sell-off of March 12 — which suggests we’re more likely to see reduced volatility in the coming weeks than a reversion of the price swings of the last month.

The top five crypto assets performed as follows: BTC (13.38%), ETH (27.62%), XRP (14.53%), BCH (15.87%), and LTC (14.5%).

The average on-chain transaction volume for the top-five crypto assets is as follows: BTC ($1.51B), ETH ($262M), XRP ($147M), BCH ($62M), and LTC ($21.4M). On average the total daily on-chain transaction volume number was flat, moving from $2.07B to $2.00B.

Research - Ethereum: Research Primer

This research primer will act as a useful guide to understanding why Ethereum is important, how the technology for Ethereum will change over the next decade, how we can value Ethereum, and what the main risks associated with an investment in Ethereum are. We believe that Ethereum presents one of the most unique and potentially lucrative investment opportunities of the decade and this research primer will help you with your investment decisions.

The report is available in English and will be released in other languages going forward.

Read the report here.

Webinar - Crypto Market Breakdown: April 2, 2020

Last Thursday, April 2nd, 2020, the 21Shares team held its first exclusive Webinar as part of our quest to help market participants stay up-to-date in the crypto-asset industry - with over 30 participations. The first part of the conference dived into the Market Outlook since the spread of COVID-19 throughout the world. Give it a listen here.

With the long-awaited Bitcoin Halving coming up next month, in the second part of the webinar, our Research team focused on demystifying this key aspect of Bitcoin’s predictable monetary supply. Give the second part of the webinar a list here.

In addition, our next Webinar session will be held this Thursday at 3 PM CET. Our senior associate, Davide Vicini, will deliver a crypto market update and our researcher, Eliezer Ndinga, will explain the basics of mining. Sign-up to the next Webinar here.

Sign-up here.

News - Kraken Hires Lawyer Marco Santori to Ramp Up Acquisitions | CoinDesk

What Happened?

Despite the growing uncertainty due to current circumstances around the world driven by COVID-19, the crypto asset industry is generally witnessing noticeable positive news and growth. Amidst the acceleration of layoffs and cutbacks of operating expenses across Silicon Valley startups — specifically in the travel and hospitality industry reported by The Information — Kraken continues its team expansion.

This time, in the legal department with the crypto veteran and former Blockchain.com President and Chief Legal Officer Marco Santori. One of the main objectives with this new addition in their team will be to double down on strategic acquisitions.

Why Does It Matter?

Earlier this year, our research team predicted that 2020 would likely be a year of consolidation of crypto-asset firms through acquisitions. In fact, this seems to hold true, as the San Francisco-based crypto exchange acquired, at that time - with an undisclosed amount, the renowned Australian exchange, Bit Trade to deepen liquidity in the Asia-Pacific (APAC) region.

Having Marco Santori onboard will also help the firm navigate through the various regulatory environments in an attempt to expand Kraken’s product offerings through strategic partnerships and acquisitions. Although the world is currently experiencing some of the most uncertain times most will likely ever see Kraken’s traction keeps growing. According to SimilarWeb data, the exchange’s web traffic rose by 25% since January 2020, reaching 4.3 million unique visitors last month - its highest number over the past six months. Kraken’s daily trading volume is also trending in a similar direction which seems to be a positive signal for further revenue growth if this pattern continues.

Learn more here.

News - Coinhouse Wins First Crypto License From French Regulator | CoinDesk

What Happened?

The Paris-based digital asset service provider, Coinhouse, previously known as “La Maison du Bitcoin”, has become the first crypto asset company to be registered with the Autorité des Marchés Financiers (AMF) — the stock market regulator in France. Coinhouse is an online trading platform along with a physical branch built since 2014. As an anecdote, La Maison Du Bitcoin gave birth to Ledger, one of the world’s leaders in crypto assets security, but since 2018 Coinhouse has become independent from Ledger.

Why Does It Matter

This news also pushed the crypto asset awareness to new levels as according to SimilarWeb, France surpassed the US and has become the number one country in terms of user traction on Kraken. As a matter of fact, the unique number of visitors to Coinhouse rose to 144K last month while there were fewer than 95K visitors early this year in January. This crypto license from the AMF will help facilitate a more positive outlook for the crypto asset industry and help boost the confidence of market participants — especially institutional investors. It is safe to say that in the upcoming months we could observe new capital inflows coming from France into the crypto market.

Learn more here.