One year after the crypto exchange FTX went bust, there is no longer any sign of gloom on the markets. Significant price increases go hand in hand with rising demand.
7 Dezember 2023. FRANKFURT (Börse Frankfurt). The approval of exchange-traded Bitcoin spot ETFs in the US, which experts believe is becoming increasingly likely, has triggered a brilliant rally on the crypto markets in combination with the renewed fall in interest rates. Bitcoin itself has risen by over 25% since the end of October to its highest level since April 2022. So far this year, the biggest cryptocurrency has now gained a good 160%.
The comeback of crypto assets, which came as a surprise to many stock market participants after the weak and scandal-ridden previous year, is accompanied by some extremely euphoric visions of the future. US fund manager Cathie Wood, for example, who was celebrated during the coronavirus crisis but also heavily criticized afterwards, compares the current phase with the beginnings of the internet and sees "explosive growth potential" in cryptos as the "harbingers of a new financial era". Specifically, she names price targets of 166,000 US dollars for Ethereum and one million US dollars for Bitcoin by 2030.
Price explosion at Solana
According to Woods, recent events have strengthened this forecast once again. The price performance of the smaller cryptocurrency Solana shows just how much such statements can influence the markets. The Solana network was also praised by the head of ARK in a CNBC interview in mid-November ("even faster and cheaper than Ether"), whereupon the price rose significantly. Since mid-October, Solana has more than tripled in value, and since the beginning of the year it has gained more than 500 percent.
The soaring price has also attracted the attention of more and more investors to this cryptocurrency. The 21Shares Solana Staking (CH1114873776) has been "in very high demand for some time", as Jan Duisberg from ICF Bank reports. And in the top 10 physically backed crypto products, the security is now in fourth place with an invested volume of 318 million dollars.
The Bitcoin ETNs from CoinShares (GB00BLD4ZL17), 21Shares (CH0454664001) and the ETC Group (DE000A27Z304) with AUM of between 484 million and 1.05 billion dollars are ahead of it. "Over USD 580 million in new money has flowed into these four top products in the past 30 days alone," reports Jan Altmann from the ETC Group. "For the year as a whole, there have been inflows of 1.78 billion dollars so far."
Crypto assets as an "inflation hedge"
Duisberg also recognizes an increased interest in crypto products. "The emerging speculation about interest rate cuts has given Bitcoin & Co. another real boost," explains the trader. In addition, this asset class is being used as an "inflation hedge" by the younger generation in particular, which means that the price trend is often similar to that of gold.
According to Duisberg, the DDA Physical Bitcoin (DE000A3GK2N1), which has only been listed on the stock exchange for 2 ½ years, is delivering "particularly good turnover". However, WisdomTree Physical Bitcoin (GB00BJYDH287) and 21Shares Bitcoin Core (CH1199067674) are also "really busy". "The original crypto assets have come to stay - despite the unchanged high consumption of resources," states the ICF Bank specialist.
Duisberg
Exciting starting position for Ethereum
David Hartmann also reports a "significant increase in demand for crypto products" for Vontobel's certificate trading over the past four weeks. Almost two thirds of transactions were purchases, almost exclusively of securities that allow investors to profit from rising prices of the underlying asset. With a 15% increase in orders in this segment, the 147% rise in demand for the underlying asset Ethereum is particularly noteworthy.
In line with this, chart technician Marcel Mußler reports an imminent breakout in the long-term monthly chart for Ethereum, which "opens up almost visionary prospects". Should the zone between 2,030 and 2,160 dollars be sustainably overcome, the technical analyst believes that the next long-term resistance will only be at 3,567 dollars. And even this mark would "only serve as a milestone" on the way to new all-time highs above USD 4,865. At the same time, however, Mußler warns that a false breakout at the breakout zone would herald the "next preparatory loop of unknown duration".
Top 10 physically backed crypto products
Product | AUM in Mio. Dollar | Cash inflow last 30 days in Mio.Dollar | Cash inflow 2023 in Mio. Dollar |
ETC Group Physical Bitcoin | 1046 | 244 | 777 |
CoinShares Physical bitcoin | 523 | 119 | 354 |
21Shares Bitcoin ETP | 484 | 96 | 339 |
21Shares Solana ETP | 318 | 125 | 307 |
21Shares Ethereum Staking ETP | 303 | 69 | 149 |
WisdomTree Bitcoin | 271 | 33 | 166 |
VanEck Vectors Bitcoin ETN | 254 | 36 | 165 |
21Shares Binance BNB ETP | 233 | -2 | -24 |
CoinShares Physical Ethereum | 176 | 44 | 88 |
21Shares Crypto Basket Index ETP | 128 | 14 | 61 |
by Thomas Koch, 7 Dezember 2023 © Deutsche Börse AG
Thomas Koch is a CEFA investment analyst, investment specialist for structured products and certified certificate advisor. Since the beginning of 2006, he has been covering events on the capital markets as a freelance journalist.
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