- With many investors concerned about looming
inflation, Bitcoin has risen in popularity and is expected to grow even further
over the course of 2020.
- Bitcoin has recently copied the record rise
of safe havens, with press-time levels passing $10,000 on the back of 12-month
gains of over 13%.
- Bitcoin
and other digital assets are the world’s first retail-led investment megatrend.
Performance Review
Bitcoin (BTC), the largest cryptocurrency, does not seem to be going away
anytime soon once the ongoing financial crisis subsides. According to United
States Representative Tom Emmer, Bitcoin’s future is now even more promising
after U.S. regulators authorised banks to provide custody for cryptocurrencies
in July 2020[1].
BTCetc Bitcoin Exchange Traded Crypto (BTCE) has reached over $45 million in AUM in less than two months from launch. Our Bitcoin ETC has rapidly become an investor favourite and in July was the most traded
security on the XETRA ETN segment, trading more than $67 million across all
available German trading venues[2].
| July |
12 Month** |
| 24.04% |
13.16% |
Past
performance is no guarantee of future performance.
Source: Bloomberg, HANetf
*July figures based on 01.07.20 – 31.07.20
**12 Month figures based on 30.06.19 -31.07.20
What Has Driven This
Performance?
The strong performance of
Bitcoin has been driven by a fresh wave of demand for haven assets as the
central policy-maker response to the ‘Great Corona Recession’ has driven an
unprecedented rise in debt and increased concerns for monetary debasement.
The timing of the launch of
BTCE has coincided with the growing demand for Bitcoin. This in combination
with the particularly attractive investment characteristics of BTCE as the world’s first
centrally cleared Exchange Traded Product*, have resulted in a very successful
first two months for our Bitcoin ETC.
*Source:
HANetf Capital Markets
Bitcoin and BTCE Performance - 1 Year (31.07.19 – 31.07.20)
* Bitcoin price is based off XBT
daily performance from Bloomberg
** BTCE inception
was on 08/06/2020
Performance before inception is
based on XBT daily performance from Bloomberg. Past performance of XBT does not
represent actual performance and should not be interpreted as an indication of
actual or future performance. Past performance for XBT is in USD. Past performance is not an
indicator for future results and should not be the sole factor of consideration
when selecting a product. It is provided for illustrative purposes only.
Investors should read the prospectus of the Issuer (“Prospectus”) before
investing and should refer to the section of the Prospectus entitled ‘Risk
Factors’ for further details of risks associated with an investment in these
products. Source:
Bloomberg / HANetf. Data as of 31/07/20
Industry News
The
US Dollar has resumed its downward trend helping gold’s surge through the landmark $2,000/oz[3].
The swell in precious metals and Bitcoin reflects growing momentum among
multi-asset investors about the uncertainty ahead for bonds and credit
investors as inflation returns grow and the Fed’s signaled Yield Curve Control
(YCC) intentions garner wider scrutiny.
Higher inflation drives higher long-term rates and hence lower Treasury
prices, but YCC complicates the accepted free-market pricing of bonds and therefore
there has been a surge, too, in inflation-swaps. The last time the Fed used YCC
was during similar levels of debt / GDP following WWII, which saw a marked
weakening of the USD.
One interpretation of the recent plunge in the USD is
that investors are questioning the value of cash as an
asset – another is that the massive stimulus may push up
inflation. ITI Capital (Authorised Participants for BTCE) is specifically watching
the levels of volatility in bond markets, the lack of which implies discounted
inflation concerns, so far, in fixed-income markets. Continued weakening of the USD and rallying
in gold, Bitcoin, silver and PGMs is a key indicator that this could change. Fiscal
policy via wage, tax and interest-payment support from the government is
expected to remain strong for a long time. This has been the larger part of
credit markets outstanding performance since March. Given the velocity and
magnitude of the credit recovery, multi-asset investors are naturally asking
‘where to from here?’, driving more marginal buyers from the biggest pool of
actively managed assets, globally, into Bitcoin via BTCE.
Outlook
There
is a powerful confluence of potent geo-political, macro-economic and technical
factors driving the current wave of interest into Bitcoin. The Great Corona
Recession has thus far unfolded at a much-accelerated
rate to the Global Financial Crisis. One of the differences that has confounded
institutional investor market-wizards has been the magnitude of the force from
retail investors driving the rapid bounce in US equities, in particular via
fractional ownership of high share price technology stocks. Bitcoin and other
digital assets are the world’s first retail-led investment megatrend.
BTCE gives access to more people via the familiar equity route to 1/1000th
of a Bitcoin (Less fees). Similarly, the access to Bitcoin for multi-asset
investors is attractive because their equity mandates can accommodate BTCE
without the complexities of navigating internal committees for a new asset
class. With growing concerns about Yield
Curve Control heralding 1940s US Dollar weakness and inflation concerns
reminiscent of equity titans struggle in the 1960s, the outlook for Bitcoin via
BTCE looks bullish for the 2020s.
“The
launch of BTCE on XETRA is a significant milestone for the cryptocurrency
community and investors alike. With BTCE, we are bringing Bitcoin into the fold
of mainstream, regulated financial markets, giving investors the benefits of
trading and owning Bitcoin through a regulated security, while having the
optionality of redeeming physical Bitcoin if they choose.” – Bradley Duke, Co-Founder
& CEO of ETC Group
Product Details
BTCetcBitcoin Exchange Traded Crypto (Ticker: BTCE) is an exchange traded
cryptocurrency (ETC), Bitcoin ETP that
tracks the price of Bitcoin.
The
ETC is 100% physically backed by Bitcoin, it trades on Deutsche Börse´s XETRA,
and is centrally cleared providing investors with one of the safest and most
liquid ways to gain exposure to Bitcoin. Each unit of BTCE gives the holder a
claim on a predefined amount of Bitcoin.
BTCE
is issued by ETC Group and marketed and distributed by HANetf.
Please
remember that the value of your investment may go down as well as up and past
performance is no indication of future performance.
| Exchange |
BB Code |
RIC |
ISIN |
Currency |
Income |
| Xetra |
BTCE |
BTCE.DE |
DE000A27Z304 |
EUR |
Acc |
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