- On August 17th ETC Group announced that the
total inflow of investor money to our Bitcoin ETC for the first time amounted to a total
of $50 million in assets under management;
- With current Nasdaq and big-tech stock
price-action analogous to Bitcoin in 2017, more tech-investors are looking at
Bitcoin now;
- BTCE as a product used for equity financing for bitcoin
holders solves one of the biggest issues in digital-assets – the concept of
counterparty credit risk for institutional enterprises.
Performance Review
- The
Bitcoin
price ranged between $11,345.65
on 31st of July
and $11,678.60 on 31st of
August,
increasing 2.80%[1]
- At
the end of August, the
Bitcoin Exchange Traded Crypto ETC
stands at just
under $54m of assets under management as of 31st
August. AUM in USD terms grew by 21.50% in August.
| August* |
12 Month** |
| 2.93% |
21.32% |
Past performance is no guarantee of future performance.
Source: Bloomberg, HANetf
*August figures based on 02.08.20 – 31.08.20
**12 Month figures based on 31.08.19 -31.08.20
What Has Driven This
Performance?
Whilst
ostensibly the performance of bitcoin was subdued, it belied the ongoing macro
dynamics behind the demand for scarcity assets. Gold consolidated its
hitherto rapid ascent to new all-time highs post the GFC and Euro-crisis of
2012 and the access to retail investors is a largely irreversible new force
driving capital markets as information and online access accelerate.
Bitcoin is the world’s first investment mega-trend where retail has led
institutional investors and increased demand is expected from both segments as
the macro uncertainty prevails through the US election and beyond.
The
popularity of our Bitcoin ETC is gaining amongst the digital-asset ecosystem as for example ITI
Capital, the FCA-regulated Prime Broker can use it to provide significantly
more attractive equity financing for bitcoin holders. This solves one of
the biggest issues in digital-assets – the concept of counterparty credit risk
for institutional enterprises.
Bitcoin and BTCE Performance- 1 Year (31.08.19 - 31.08.20)
Total Return NAV to Date (up to 31/08/2020)
| |
1M |
3M |
6M |
YTD |
12M |
Since Inception |
| Bitcoin Exchange Traded Crypto - BTCE* |
2.76% |
- |
- |
19.81% |
- |
19.81% |
| Bitcoin** |
2.93% |
24.03% |
34.68% |
20.36% |
21.32% |
20.36% |
*BTCE inception was on 08/06/2020
** Bitcoin price is based off XBT daily performance from Bloomberg
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 31/08/20
Industry News
August was a strong month for ‘risk’ assets as
equities rallied on the acceptance of a ‘K-shaped recovery’ summarising
divergent fortunes across resurgent markets despite bearish forward
expectations for many sectors of the global ‘real economy’. Economic data
continued to improve across developed and emerging markets; hopes for a
Covid-19 vaccine gained traction with expectations firming up for early next
year. Q2 earnings blew out albeit ‘kitchen-sinked’ expectations; technology and
cloud stocks pushed up ‘into thin air’ as investors sought to position for the
‘new normal’ after the Great Corona Recession. Many of the quantitative and
smart-beta investment funds and vehicles bought back into the equity market
having liquidated during the exodus in March.
The annual Jackson Hole summit, online this year,
marked another significant checkpoint for markets as Fed chairman Powell
announced earlier than expected to shift policy to target average inflation of
2%[2]. This led the US Yield curve to steepen to its widest gap in
recent months between 5 year and 30 year Treasury Bonds. The Fed is likely to
hold short-term rates very low for a very long time as it targets inflation in
the longer-end of the curve. This dovish stance from the Fed was taken as a
clear message that the US Dollar would resume its downward trajectory versus
other major currencies. This ‘next leg lower’ provided fresh impetus to Bitcoin
and commodities. Gold spent much of August consolidating gains after its
dramatic price action since March.
Bitcoin continued to attract new marginal buyers seeking to protect
portfolios.
Outlook
ITI Capital, an Authorised Participant of the Bitcoin ETC,
observes that there is little choice for policy-makers but to continue with aggressive
fiscal policy and monetary easing given the state of the broad economy after
the pandemic. This will likely remain the motive force supporting the rally in
financial assets for the foreseeable future. However, there is growing
scrutiny of technology stock valuations with the S&P 500 average at 26x
earnings - whilst 12m trailing earnings of the big-tech titans are truly ‘off
the charts’ (Tesla 1100x, Amazon 130x and ‘Quality’ Apple 38x) [3].
Rising inflation expectations challenge the terminal valuations of these and
other growth stocks more sensitive to future earnings. Bitcoin’s parabolic
price action in 2017 and subsequent correction was followed by nearly three
years of consolidation. With current Nasdaq and big-tech stock price-action
analogous to Bitcoin in 2017, more tech-investors are looking at Bitcoin now. BTCE
gives access to more people via the familiar equity route to 1/1000th of a
Bitcoin (Less fees). The access to Bitcoin for multi-asset investors is
attractive because their equity mandates can accommodate BTCE rather than
crypto. As multi-asset investors get ‘back to school’, Bitcoin and BTCE are expected to benefit further from
the prevailing macro conditions.
"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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