21Shares Research Newsletter – Issue 95
Today, 16 February 2021, marks the first day that Bitcoin has hit a level above $50,000 — hitting a new high of $50,350.06 at 13:39 PM CET. This recent milestone comes off the back of strong rallying across the market — primarily in less-well-known assets than Bitcoin, though Bitcoin too has rallied. This rally was driven by Tesla’s announcement of their $1.5B investment into Bitcoin reflecting continued institutional, corporate, and retail interest in Bitcoin and, as the chart shows, this has contributed to a market-wide wealth effect with BNB (ABNB | ISIN: CH0496454155) being one of the assets to have performed best since the news.
Both the outperformance of lower-cap cryptoassets over the last few weeks, as well as the fact that Bitcoin will likely generate another new level of support at the $50K mark, are signs that over the coming week Bitcoin will likely become the focal point of cryptoasset markets.
The returns of the top five cryptoassets over the last week were as follows — BTC (3.36%), ETH (0.94%), DOT (20.30%), XRP (17.17%), and ADA (22.72%).
The performance of our line of ETPs over the last 30 days is as follows: ABTC (32.5%), AETH (28.1%), ABCH (30.9%), AXRP (82.1%), ABNB (196.5%), AXTZ (58.4%), HODL (35%), ABBA (29.8%), KEYS (32.8%), and SBTC (-33%).
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Got any questions on crypto trends? Is bitcoin the new gold? Are institutional investors ready to get involved? Sign up here to attend the talk hosted by ETF Stream which will include our Managing director, Laurent Kssis tomorrow, Wednesday 17th February at 11am GMT.
On Thursday, February 18, from 2 to 3 pm GMT, our Managing Director, Sina Meier, will be the moderator at the online event on digital programmable money hosted by Frankfurt School Blockchain Center. Register to attend the event here.
Daily Finance featured our company amongst the most cutting-edge fintech companies in Switzerland. “These startups and companies are taking a variety of approaches to innovate the Fintech (Financial Technology) industry, but are all exceptional companies well worth a follow.” Have a read here.
Our Head of Southern Europe, Massimo Siano appeared on AzienDaBanca where he gave his thoughts on the critical milestone we reached of over $500 million in AUM. Have a read here.
What Happened?
Some positive news on the regulatory front is news from SEC Commissioner Pierce on Coindesk TV saying in an interview that the US is ready for a Bitcoin ETP. As we anticipated in our year-end review of 2020 with expectations for 2021, the new administration will provide more regulatory clarity specifically due to the fact that the new head of the SEC, Gary Gensler, is undeniably knowledgeable about the crypto industry as he taught a course at MIT on cryptocurrencies and the blockchain technology.
Why Does It Matter?
As Bitcoin institutional and corporate attraction keeps growing, so does its valuation. As of February 16, Bitcoin’s market value amounts to over $900 billion and is on the verge of crossing the $1 trillion mark for the first time. Every other week, there have been more announcements regarding Bitcoin adoption, for example, MicroStrategy announced today another fundraise of $600 million through a convertible debt offering to buy more Bitcoin, while the oldest American bank, BNY Mellon with $2 trillion in AUM, plans to custody cryptoassets. The bank said they will hold, transfer and issue bitcoin on behalf of its asset-management clients. In the same vein, Purpose Investment, Inc. listed the world’s first Bitcoin ETF in Canada and subsequently the first ever in North America, while Mastercard, the leader in global payments connecting billions of consumers and thousands of financial institutions, is bringing cryptoassets onto its network.
To meet the demand of sophisticated investors and financial institutions alike, a Bitcoin ETP in the US will enable the cryptoasset to get to the mainstream as SEC Commissioner Pierce alluded to in her interview — as people are looking for a way through regulated markets to access Bitcoin. It’s important to note the key differences between ETPs and ETFs as a Bitcoin ETP would not be an ETF therefore not a fund but rather a debt security. However, all ETPs are quoted and traded on stock exchanges throughout the trading day, like ordinary shares, while their prices are calculated with reference to an underlying index or reference asset like Bitcoin.
The brief rise of Bitcoin above the $50K mark has also led long-term investors to realize profits in this early bull market as we can observe with the ASOL metric on the image below. ASOL stands for “Average Spent Outputs Lifespan” in other words the average age of bitcoins that move out of wallets. It’s a useful indicator for filtering out changes in older coin spending behaviour. This provides insight into the actions of longer-term and smart money investors. Tesla’s announcement from last week has significantly increased the average age of bitcoins being sold on exchanges from 30 days to more than 50 days. As newcomers enter the market while the value of the asset appreciates, such behaviours from long-term investors are likely to be increasingly common.
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The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction. Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof.
