Bitcoin Monthly Report | March

13 March 2021

  • Despite the largest pull-back in Bitcoin prices in recent times amidst macro turmoil, we continued to see inflows into our Bitcoin ETC           
  • The rate of institutional adoption of Bitcoin continues to accelerate


Bitcoin Performance


12 Month*



Past performance is no guarantee of future performance.

Source: Bloomberg, Solactive, HANetf *XBTUSD Index, in USD. 12 Month figures based on 28.02.20 -26.02.21.


Performance Review

Bitcoin saw another surge February with a 31.84% rally following the 19.5% rise in January and 49.6% gain in December, taking the total gain to 388.8% since June 2020 when the Bitcoin ETC launched.

The Bitcoin price ranged between a max of $55,620 on 19th of February to a minimum of $33,665 on 1st of February, a growth of 65.2%.[1]

At the end of February, the Bitcoin ETC stands at $846m of assets under management.

February saw a dramatic 26% correction in the underlying Bitcoin market in the last week of the month on the confluence of a comment from influential Elon Musk that the ‘price seems high’ and remarks from Janet Yellen, the US Treasury Secretary, that Bitcoin was ‘highly speculative’ and ‘inefficient’ for transactions. 


Industry News

The main driver of the recent correction in bitcoin was the escalation of concerns about the US bond market as yields began to rise in the 10 Year and longer maturities as expectations rose for the $1.9bn fiscal package.  Investors are getting increasingly worried that accelerating inflation could trigger a pullback in monetary policy support that has fueled gains in risk assets during the Great Corona Recession.  Federal Reserve Chairman Jerome Powell reiterated that higher Treasury yields reflect optimism on the outlook for growth and officials have stressed that the central bank has no plans to tighten monetary policy, the motive force behind the asset price inflation.  The move in yields also led an acceleration of the Great Rotation in equities where the growth / tech stocks in the Nasdaq with greater share price sensitivity to forward interest rates suffered a c.7% drawdown from peak whilst the value / cyclical sectors held up well into the month-end.  The multi-asset volatility extended across energy, metals and agriculture with confidence growing in a nascent commodity super-cycle.


BTCE Performance Table

As of 28.02.21






















*BTCE inception was on 08/06/2020

**Bitcoin price is based off XBT daily performance from Bloomberg

Performance before inception is based on back tested data. Back testing is the process of evaluating an investment strategy by applying it to historical data to simulate what the performance of such strategy would have been. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. Past performance for the index 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. 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 this product. Source: Bloomberg / HANetf. Data as of 28/02/2021



As markets head into March, the uncertainty in the bond market is likely to prevail with a consolidation required following the sharp moves in the US 10 year yield where the market perceives the ‘line in the sand’ at 1.75% level whereby large multi-asset investors are expected to accelerate reallocations out of equities and back into bonds.  Blackrock, the world’s biggest fixed income manager, shifted towards a more pro-growth allocation, increasing exposure to equities and going underweight government bonds as inflation expectations rise sharply.  Last year, renowned economists and strategists were quick to look forward to the spectre of rising inflation and the challenges navigating those financial conditions.  There are few asset managers operating today with experience of navigating true inflation.  With front-end rates firmly anchored on the floor for the foreseeable future, expectations are mounting that the Fed will have to apply Yield Curve Control in longer-end bonds.  Whilst turmoil in the biggest asset markets of government bonds and equities will inevitably lead to amplified short-term drawdowns in Bitcoin, the longer-term outlook for Bitcoin continues to build.  Blackrock’s CIO and CEO themselves are among those citing Bitcoin’s place in portfolios.  Short-dated correlations increased again between Bitcoin and Tech stocks – increasingly caught up as the tech behemoths continue to invest their treasury cash-piles in Bitcoin, supported by influential asset managers like ARK’s Cathie Wood or FundStrat’s Tom Lee – one of the most accurate investors since the onset of the Pandemic.  It also reflects growing institutional adoption when short-dated correlation increases during episodes of market stress.  This was the case when gold fell c.30% during the GFC[1] and Bitcoin fell 63% last March[2].  Both then went on to multiply in value when the investment case returned to the fore and investors horizons looked forward.  There has been speculation that a collapse in premium of the popular US closed-end trust on Bitcoin would lead to a break-down in Bitcoin.  ITI disagrees with this hypothesis as arbitrageurs of that premium have to unwind short-positions in Bitcoin or Bitcoin futures so the net impact on supply is flat.  ITI believes that the primary driver of the compression of the premium on such vehicles is due to the rising popularity of BTCE as more investors realise that they don’t need to pay a premium or suffer a lock-up on their investment.  As the debate about inflation begins to intensify, ITI believes that there will be increased flows into BTCE from institutions seeking the most fiduciary responsible way to gain exposure to Bitcoin. 

BTCE Fund page


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