When you trade a bitcoin ETF or ETP your capital is at risk.
- BTCE rallied 38.9% in December amidst ongoing investor scramble to keep pace with
asset-price inflation;
- The
rate of change of institutional investors publicly embracing Bitcoin accelerates;
- The
biggest force in markets remains Monetary Policy, accelerating the debasement
of DM currencies and creating demand for bitcoin and BTCE
Performance Review
- The
Bitcoin price ranged between a max of $28,996 on 31st December to a
min of $18,101 on 11th December, a growth of 60.19%.[1]
- At the end of December, the Bitcoin Exchange Traded Crypto ETC stands at $352m of assets under management. AUM in
USD terms grew by 101.35% in December, alongside the 49.63% growth in the USD
price of Bitcoin.
Bitcoin
Monthly Performance
December*
|
12 Month**
|
49.63%
|
305.07%
|
Past
performance is no guarantee of future performance.
Source: Bloomberg, HANetf
Performance based off XBT price
*December figures based on 31.11.20 – 31.12.20
**12 Month figures based on 31.12.19
-31.12.20
This past year BTCE became the fastest
growing Exchange Traded Product in the history of Deutsche Borse and was the
highest traded product on Xetra’s ETN segment.[2] This is a powerful
testament to the merits of the world’s first centrally cleared ETP on a digital
asset.
December saw a continuation of the
public embrace of bitcoin from major institutions. Guggenheim, Blackrock,
Bridgewater, Massachusetts Mutual, Skybridge, Bernstein and other buy-side
investment behemoths publicly restated their views towards adoption of
bitcoin. Sell-side firms like Citigroup mentioned potential
year-end 2021 Bitcoin price-targets in excess of $300k as the hitherto
crypto language of ‘fiat debasement’ became mainstream analyst parlance.[3]
Bitcoin and BTCE Performance
Total
Return NAV to Date (up to 31/12/2020)
|
1M
|
3M
|
6M
|
YTD
|
12M
|
Since Inception
|
Bitcoin Exchange Traded Crypto – BTCE*
|
49.06%
|
168.89%
|
213.16%
|
194.86%
|
-
|
194.86%
|
Bitcoin**
|
49.63%
|
170.82%
|
217.00%
|
305.07%
|
305.07%
|
198.84%
|
*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 31/12/20
Industry News
Our bitcoin ETF saw
another surge in December with a 49.06% rally following the 42.08% gain in
November taking the 2020 YTD gain to 194.86% since its launch in mid-June 2020. Global
markets remained in a firm risk-on mode following on from the US election and
news of Covid vaccination deployments. The UK became the first major
developed market to begin vaccinations and the Great Rotation continued to
evolve into a catch-up for cyclical and value stocks as well as technology
and growth equities. The ‘Everything rally’ continued to reflect investors
growing fears of missing out on the asset-price inflation sweeping across
equities, commodities, pockets of real-estate and other perceived havens as the
purchasing power of hard currencies continued to decline. ITI observes
that this debasement of currency and erosion of wealth is a familiar EM dynamic
that has now arrived firmly in Developed Markets. We have previously
observed here that one of the biggest drivers of why Bitcoin is accelerating so
strongly at this time is the basis-change in the absolute risk / reward for
professional asset allocators and asset managers who now need to be able to
point to the safest mechanism to access bitcoin – the rationale behind BTCE. However, on
a relative basis, the risk / reward decision for Bitcoin is now much less of an
outlier when considered against Tesla which rallied 8.2x in 2020 to achieve a
market capitalisation in excess of the world’s seven biggest auto
manufacturers, yet with a fraction of their revenues.
SPACs,
special purpose acquisition vehicles were another post-Great Corona Recession
phenomenon where even empty shell companies traded up to staggering gains and
perceived ‘disruptor’ IPOs such as Airbnb, DoorDash and OZON displayed Dotcom-era
dynamics. These frothy market conditions reminded many of the subsequent
collapse of the nascent tech market in 2000-2001, again following a disputed US
election (Bush-Gore). However, the analyst earnings outlooks for equities
importantly managed to rise in Q4 2020 and conversely reduced some of the
pressure on the lofty valuation multiples that developed over the
northern-hemisphere summer. The Equity Risk Premium argument remains
supportive of equities and the December Triple Witching options and futures
expiry passed without any signs of the feared mutual fund reallocation out of
equities. This price action in equities signals a continuation of the
scramble for risk assets as the Dollar continues to decline.
Outlook
At current levels of
c.$30k, Bitcoin represents c.5% of the value of gold above ground. As Bitcoin
is ‘better at being gold than gold’ for many investors given the ease of
accessibility and lower / zero cost of carry, analysts are pointing to that
relative percentage increasing. Furthermore, the demand for scarcity
assets like gold, PGMs, agricultural land inter alia is expected to
dramatically increase as the Federal Reserve, ECB and Banks of Japan and
England are not expected to change tack any time soon from the extraordinary
monetary policy measures.
ITI expects 2021 to see
an acceleration of the mainstream adoption of Bitcoin. Reports that
investment trusts were acquiring bitcoins at a rate in excess of the miner
supply helped Bitcoin rally from $20k to $30k. With a maximum finite
supply of 21 million coins and a much-increased pool of demand chasing them,
the outlook for BTCE remains bullish.
"BTCE
enjoyed incredible growth in 2020, with the value of Bitcoin increasing by
almost 300%. Our ETP brings to the world of Bitcoin the transparency and
investor protection that regulators and institutional investors require, and we
are confident that the rally in Bitcoin will continue, because its unique
attributes are now more attractive than ever following the financial rescue
packages rolled-out by governments in response to the Coronavirus crisis, and
the implications of these. Furthermore, unlike in 2017, the current rally
in the price of Bitcoin is supported by both retail and institutional investors,
and the infrastructure in place today is much stronger than it was three years
ago.” - Bradley Duke, Co-Founder & CEO of ETC Group CEO of ETC
Group
Product Details
BTCetcBitcoin Exchange Traded Crypto (Ticker: BTCE) is an exchange traded
cryptocurrency (ETC) 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.
When trading a Bitcoin ETF or ETP your capital is at risk.
EXCHANGE
|
BB CODE
|
RIC
|
ISIN
|
CURRENCY
|
INCOME
|
XETRA
|
BTCE
|
BTCE.DE
|
DE000A27Z304
|
EUR
|
Acc
|
SIX
|
BTCEUSD SW
|
BTCEUSD.S
|
DE000A27Z304
|
USD
|
Acc
|
SIX
|
BTCEBGP SW
|
BTCEGBP.S
|
DE000A27Z304
|
GBP
|
Acc
|
SIX
|
BTCECHF SW
|
BTCECHF.S
|
DE000A27Z304
|
CHF
|
Acc
|