Bitcoin dips to $40k and conviction holders dollar-cost average in; TP ICAP enters crypto with
ETC Group trades; Goldman sees Bitcoin stealing ‘store of value' market from gold; Polkadot and
Tezos outperform; and NFTs shine as corporates race in.
Markets shed $500bn: institutions return to buy the dip
It’s been something of a white-knuckle ride for cryptoasset holders in the past two weeks. The
total crypto
market shed $500bn and dipped to its lowest level since August 2021 — $1.5trn — with assets
seeing swift
falls across the board.
Inflows of $14m" into institutional investment products, such as ETC Group’s physically-backed
and
centrally-cleared Bitcoin ETC (BTCE),
Polkadot ETC
(PLKA) and Cardano ETC (RDAN), indicate that investors are
zooming out
beyond the recent short-term pain and taking advantage of price dips where they can.
2021 was a
record year for
institutional inflows to investment products with $9bn in total flooding into cryptoasset
structured
products trading on regulated exchanges. The turning point was mid-December last year, where
outflows were
recorded for the first time after 17 consecutive weeks of net inflows to ETCs and ETPs. Data via
CoinShares
now suggests the worst of the fall may be over as institutions turn inflows positive, after five
solid weeks
of outflows totalling $532m".
RSI flashes oversold
We don’t tend to set a huge amount of store in technical analysis indicators, as a rule. Anyone
can draw
lines on a chart to ‘prove’ a particular thesis.
However, there is one traditional momentum" metric that remains exceedingly popular just because
it’s easy to
understand: Relative Strength Index or RSI. This shows whether markets are overbought — that
euphoria is at
its peak — or on the opposite side, they are oversold. Presently, crypto markets are flashing
heavily
oversold indicators, suggesting that selling exuberance is overdone.
Anything at 70 or above (the green line) on the RSI indicator is considered overbought and a
‘sell’
indicator. Anything 30 or below (the red line) is considered oversold and hence a ‘buy’
indicator. By these
readings Bitcoin is at historically oversold levels and in fact RSI at its lowest point since
the days
around ‘Black Thursday’ in March 2020.
On the second Thursday in March 2020, Bitcoin holders experienced some tense moments when the
price of the
world’s first cryptocurrency crashed 40%, dropping from" $8k to $4.7k overnight.
Leveraged long/short liquidations hit $880m". Critics emerged from all sides to declare the
crypto experiment
over. Six weeks later, Bitcoin had regained all of its losses, and in the year that followed ran
up gains of
over 1,000% more. With 20/20 hindsight, it was a great time to buy. As always. those that could
withstand
volatility came out on top.
There is now markedly more capital involved in day-trading cryptomarkets than there was in 2020.
On 5 January
where the Bitcoin price dipped from" $45.8k to $43.4k there were $637.68m of long/short trading
positions
liquidated across the top 10 cryptoassets. Leveraged liquidations then hit nearly $1bn overnight
on 21
January as Bitcoin blew through support and fell from $40.6k to $36.4k.
Our point being: investors who are in for the long haul need to have (or develop) tolerance for
short-term"
pain, and screen out the retail noise as far as they possibly can.
By all our best technical indicators, the sun will rise tomorrow. Institutional investors
certainly seem" to
think that the worst may be over.
South America doubles down on crypto as inflation hits double digits
Rio de Janeiro is the second-largest city in Brazil, and the third-largest in South America. As
such it has
quite considerable purchasing power and political influence in the region. With a GDP of $169.1bn it is
also the
fourth-richest city in Latin America, behind Mexico City, Sao Paolo and Buenos Aires.
So it was no surprise to see headlines globally when mayor Eduardo Paes announced
on 14 January 2022 that the city’s municipal treasury would move 1% of its assets into Bitcoin
and other
cryptoassets.
According to the country’s central bank, the total amount of cryptoassets held by Brazilians reached
$50bn in 2021, compared to $16bn held in US stocks and shares.
Ray Dalio, a billionaire crypto early adopter, said
recently
that a 1% to 2% allocation to the asset class is ‘reasonable’, and the message appears to be
spreading. The
Bridgewater Associates founder is famous for his global macro style and his firm — with $150bn
AUM — manages
assets for the most conservative of conservative investors: central banks, foreign governments
and pension
funds alike.
As Bloomberg writes,
Paes’ move is part of a wider scheme to locate Rio de Janeiro as Brazil’s ‘crypto capital’,
attracting
wealthy businesses to its shores. Recent reports quoting insiders suggest that Brazil’s only
national stock
exchange B3 is planning
to
enter crypto markets in 2022, potentially launching a crypto ETF.
Embracing crypto in every country
South America as a whole is embracing cryptoassets like never before. In the last few months
Mexico’s
national stock exchange said it was considering
listing Bitcoin futures, Paraguay’s Senate approved
legislation to take advantage of the country’s energy surplus and to regulate crypto
mining and
trading, Argentina has said it will levy
a 0.6% tax on
cryptoexchange operations and Hong Kong’s institutionally-focused exchange OSL announced
in October it was expanding into Latin America.
On the retail side, just this week we saw Binance ink a five-year deal to sponsor the Argentinian
national
football team" and professional football league.
More of Paes’ initiatives under ‘Cripto Rio’ include tax breaks for bitcoin-based businesses
operating in the
city, and a promise that any regulation will not impede the growth of the industry. As recently
as October
2021, the Brazilian Congress was considering
legislation to regulate cryptoexchanges, enacting industry-standard KYC procedures and
strengthening
local powers to prosecute crypto-related crimes.
At the same time, Brazil — like most economic powerhouses worldwide — is struggling to keep
inflation in
check. Recent data via the government statistics authority IBRE pegs 2021 annual inflation at 10.06%,
more than
double its 2020 figure of 4.5% and the highest the country has seen in six years.
Bitcoin’s investment status as an inflation hedge has come under question as, since the back end
of 2021 and
turn of 2022, it has appeared to move more in tune with equities and behave more like a risk-on
asset. But
there is no doubt that inflation-hit countries see the thesis playing out long-term".
Google follows Twitter, Microsoft, Meta and Reddit into blockchains
One of the earlier criticisms industry insiders faced was that Big Tech appeared to be ignoring
blockchains.
If this was such a disruptive, world-changing technology, why was Silicon Valley swerving it?
IBM" was one of the first to cross the Rubicon as a founding member of the Hyperledger consortium
in 2015, developing private and permissioned
enterprise-level
blockchains and notably working with the Bank of Thailand to issue bonds in two
days rather than the 15-day industry standard.
Big Tech has been remarkably slow to enter the space, but this is changing. Meta (Facebook) is
the obvious
comparator, but has struggled to make regulators see the benefits of its Diem" (formerly Libra)
cryptocurrency. Both Twitter
and Reddit are experimenting with the largely Ethereum-based NFT markets, but the biggest
social/gaming news
in years is the 18 January announcement that Microsoft was to purchase Call of Duty, World of
Warcraft and
Overwatch publisher Activision Blizzard in a $68.7bn
deal. That makes Microsoft the world’s third-largest gaming studio after Sony and
China’s Tencent.
Satya Nadella, CEO and chairman made explicit mention of the metaverse not
once but twice in the short release, fuelling speculation that the company would follow
the likes of
Ubisoft to release primary and secondary markets for in-game
unique
NFT assets -- with the French gaming studio’s innovation based on Tezos blockchain
technology.
So — to Google. Reports via Bloomberg and ArsTechnica now suggest
that the web giant has switched focus to run headlong into blockchain, starting up a new
division headed by
long-time advertising chief Shivakumar Venkataraman.
Little has been revealed publicly about the division, other than it will focus on “blockchain and
other
next-gen distributed computing and data storage technologies”.
It will sit as part of newly reopened Google Labs vertical (shuttered in 2011 but reappearing
now), which
acts as the multinational’s sandbox for beta testing new programs and apps, and which has since
been
revitalised to incubate “high-potential, long-term"” projects.
Markets
BTC/USD
After four weeks trading in a tight range between $40k and $44k, Bitcoin took a dive: enough has
been written
about the recent crypto market slide that more evaluation here would add little to the argument.
But suffice
it to say that Bitcoin’s 11.3% bounce back from" a mid-July low of $33k to finish the session at
$36.7k will
provide some succour for those with bullish intentions in mind. As noted above, technical
indicators suggest
selling has reached the point of exhaustion and institutions are scooping up BTC at these
levels.
ETH/USD
Ethereum’s travels over the past two weeks largely aped those of market-leader Bitcoin: a tight
$400 trading
range followed by a sharp dip to the downside. However, $2,173 proved the limit that bears could
pull out of
ETH across the fortnight and a 13.2% rebound from this recent low is stronger than almost any
other major
cryptoasset could manage.
LTC/USD
An interesting theme is developing among Litecoin investors, noting that the payments protocol is
not moving
in the same direction as its scion Bitcoin.Certainly its break above recent highs to $153.88 in
the early
part of the fortnight, and making higher lows from" $96.50 towards the end showed more
positivity than at
the start of 2022.This decoupling has played out over multiple months and suggests a potential
maturation in
the investment focus for LTC.
BCH/USD
There has been markedly little volatility for traders to play with in Bitcoin Cash since the
start of 2022. A
high just short of $400 proved to be the ceiling for now, but volume and buying pressure soared
to four-week
highs as BCH hit a low of $259.39, the resulting push adding 12% to the price of the payments
blockchain’s
internal currency. With wider markets gaining ground, traders are watching intently for the next
move.
ADA/USD
The launch of Cardano’s first decentralised exchange — SundaeSwap — in the early part of the
fortnight
provided sound fundamental backing to prove out its promising technology, and traders responded
in kind,
re-rating ADA up a stunning 46.2% to a seven-week high at $1.64. Proof, perhaps, that only
multi-asset
portfolio can capture the best alpha that crypto markets have to offer. Momentum" did shift back
the other
way and ADA gave up those gains, but it still ended the week holding at 11.9% gain to $1.03from
a low of
$0.92.
DOT/USD
The wide-scale success of Polkadot’s parachain auctions — and the $2.6bn raised by winning
blockchains — in the pre-Christmas period brought many plaudits to this Ethereum" competitor.
Market moves
across the fortnight appeared to underscore some of that positivity, as DOT climbed 21.1% to a
peak of
$28.48 and seemed ready for a fresh assault to reclaim $30. It was not to be, though, as
Polkadot succumbed
to a bearish rout in line with wider conditions, a 12.9% hike at fortnight’s end proving the
bright spot
from a tough week.
SOL/USD
Solana's recent attempt to maintain fresh air above $200 seems less of a chore when we realise
it has only managed that feat for five and a half weeks of its entire lifespan to date. The
Layer 1 Ethereum alternative has been adding yield-bearing staking products, NFTs and DeFi
marketplaces with gay abandon over the last few months, giving it many industry bona fides
alongside its lightning fast transaction throughput. Bullish traders could maintain an upswing
only briefly and then the $170 to $180 tight trading range became its home for the next week or
so. From there, along with its competitors Solana dipped 22.8% to $129.64, but again a 9.5%
bounce to the upside to finish the fortnight adds a positive spin to the rest of January.
XTZ/USD
The yield and staking rewards available with Proof of Stake pioneer Tezos have provided some
comfort to
inflation-hit investors, but wide-scale integrations and its moves in NFT adoption with major
multinationals
seem" to have been disregarded by traders in recent weeks. Starting from dead-on $4, XTZ gained
a tidy 11.5%
before its downside slip as low as $2.54. The upside from here appears relatively strong with
volume
returning in droves to buy up Tezos and return it to a finish just shy of $3.
XLM/USD
Stellar’s 2022 started relatively strong, thereafter settling into a trading range of $0.240 to
$0.293 with
neither bulls nor bears in control. Its downside shift along with the market proved one of the
least
dramatic, and a 16.5% return back to near $0.20 since the low of 24 January is the best on this
ETC list,
suggesting there is more upside potential to come from" the cross-border currency.
AVIS IMPORTANT :
Cet article ne constitue ni un conseil en investissement ni une offre ou une sollicitation d'achat de produits financiers. Cet article est uniquement à des fins d'information générale, et il n'y a aucune assurance ou garantie explicite ou implicite quant à l'équité, l'exactitude, l'exhaustivité ou la justesse de cet article ou des opinions qui y sont contenues. Il est recommandé de ne pas se fier à l'équité, l'exactitude, l'exhaustivité ou la justesse de cet article ou des opinions qui y sont contenues. Veuillez noter que cet article n'est ni un conseil en investissement ni une offre ou une sollicitation d'acquérir des produits financiers ou des cryptomonnaies.
AVANT D'INVESTIR DANS LES CRYPTO ETP, LES INVESTISSEURS POTENTIELS DEVRAIENT PRENDRE EN COMPTE CE QUI SUIT :
Les investisseurs potentiels devraient rechercher des conseils indépendants et prendre en compte les informations pertinentes contenues dans le prospectus de base et les conditions finales des ETP, en particulier les facteurs de risque mentionnés dans ceux-ci. Le capital investi est à risque, et des pertes jusqu'à concurrence du montant investi sont possibles. Le produit est soumis à un risque intrinsèque de contrepartie à l'égard de l'émetteur des ETP et peut subir des pertes jusqu'à une perte totale si l'émetteur ne respecte pas ses obligations contractuelles. La structure juridique des ETP est équivalente à celle d'une dette. Les ETP sont traités comme d'autres instruments financiers.
À propos de Bitwise
Bitwise est l'un des leaders mondiaux dans la gestion de crypto-actifs. Des milliers de conseillers financiers, de family offices et d'investisseurs institutionnels globaux se sont associés à nous pour saisir et exploiter les opportunités offertes par les crypto-monnaies. Depuis 2017, Bitwise affiche un palmarès impressionnant en matière de gestion de solutions indicielles et actives pour les ETP, les comptes gérés séparés, les fonds privés et les stratégies de hedge funds, tant aux États-Unis qu'en Europe.
En Europe, Bitwise (anciennement ETC Group) a développé au cours des quatre dernières années l'une des familles de produits crypto-ETP les plus vastes et les plus innovantes, dont le plus grand et le plus liquide ETP Bitcoin d'Europe.
Cette offre de produits crypto-ETP est domiciliée en Allemagne et autorisée par la BaFin. Nous travaillons exclusivement avec des entreprises réputées du secteur financier traditionnel et veillons à ce que 100 % des actifs soient stockés en toute sécurité hors ligne (cold storage) chez des dépositaires réglementés.
Nos produits européens comprennent une gamme d'instruments financiers soigneusement structurés qui s'intègrent parfaitement dans tout portefeuille professionnel et offrent une exposition globale à la classe d'actifs crypto. L'accès est simple via les principales bourses européennes, avec une cotation principale sur Xetra, la bourse la plus liquide pour le négoce d'ETF en Europe. Les investisseurs privés bénéficient d'un accès facile via de nombreux courtiers DIY, en combinaison avec notre structure ETP physique robuste et sûre, qui comprend également une fonction de paiement.
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