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Cryptocurrency Monthly Report | October

 

Key Takeaways

  • Digital asset investment products saw positive inflows for the past five weeks. [1]
  • Ukraine follows El Salvador and Cuba to legalise and regulate Bitcoin. [2]
  • Fed Chair Powell says he has ‘No Intention’ of banning cryptocurrency. [3]
  • 120 out of the 125 largest DeFi venues now work on Ethereum. [4]

 

Macro Outlook

Bitcoin has taken quite the circuitous route back to $50,000 over the past weeks, via an extensive dip down into the low-$42,000 region over the past fortnight. One trading session even brought the original cryptocurrency beneath the $40,000 mark it has held since early August, but this remained a blip on the surge back towards the higher watermark. Across the two-week period Bitcoin gained a total of 21.03%, representing quite the reversal. [5]

Ether (Ethereum) has recaptured the zeitgeist with a spell above $3,000, while bears have been trounced continually across the two-week trading period. Overall, we’ve witnessed a recent quite stunning 27.6% turnaround for the blockchain, which after all is the basis for the vast majority of DeFi and NFT activity. And here, perhaps, have a preview of the march back towards the $4,000 region, with Ethereum ending the fortnight at $3,469.74, just a fraction of a percent below its peak. [6]

Digital asset investment products saw positive inflows for the past five weeks which suggests that sentiment is turning for the better for the asset classes. In total $42m was drawn into ETP and ETF products, with Bitcoin seeing the highest gains across the last week in September. [7] The data seems to demonstrate increased appetite for cryptocurrency exposure across the sector and sentiment not confined to any one asset. Given the inflow, it can be assumed that investors are broadening their market focus and entering more sophisticated positions using secure, centrally cleared ETP products like the physically backed cryptocurrency ETCs offered by ETC Group. 

Large holders tend to accumulate Bitcoin in anticipation of higher prices. This is a cycle that has played out countless times since Bitcoin was first widely tradeable in the early 2010s. Among them, now, are El Salvadorian President Nayib Bukele. He tweeted on 7 September that — in the parlance of the crypto market — the country’s treasury department was “buying the dip”, adding 150 BTC at the then-market price of $42,900. [8] Michael Saylor’s Microstrategy (NASDAQ:MSTR), the pioneer in corporate Bitcoin treasury buying, is another. On 13 September, the CEO announced his company had picked up another 5,050 BTC. [9] On Wednesday 8 September, Ukraine passed a draft law [10] legalising and regulating cryptocurrency and other digital assets, making it the fifth-such economy to do so in recent weeks. Panama is also drafting new cryptocurrency regulations [11] to propose the use of cryptocurrency as a means of payment for civil and commercial operations.

Overall global adoption of cryptocurrency has taken off in the last year, up 881%, according to new data from Chainalysis. [12]

 

Crypto Performance (As of 30.09.2021)

 

1M

3M

6M

YTD

12M

SI

BTCetc - Bitcoin Exchange Traded Crypto

-7.75%%

24.96%

-27.07%

47.86%

297.57%

335.95%

Bitcoin

-7.60%

25.59%

-26.33%

49.80%

305.68%

347.66%

ETHetc - ETC Group Physical Ethereum

-12.47%

32.32%

52.09%

92.28%

NA

92.28%

Ether (Ethereum)

-12.36%

32.83%

53.24%

93.94%

733.22%

93.94%

LTCetc - ETC Group Physical Litecoin

-12.15%

5.77%

NA

-38.65%

NA

-38.65%

Litecoin

-12.01%

6.31%

-22.71%

-38.06%

229.52%

-38.06%

BCHetc – ETC Group Physical Bitcoin Cash

-19.61%

NA

NA

-19.61%

NA

-19.61%

Bitcoin Cash

-19.55%

-4.38%

-7.26 %

19.55%

119.82%

-19.55%

Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 30/09/2021. 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.

 

Learn more about our crypto ETCs:

BTCetc – ETC Group Physical Bitcoin

ETHetc - ETC Group Physical Ethereum

LTCetc - ETC Group Physical Litecoin

BCHetc – ETC Group Physical Bitcoin Cash

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