26.01.23 14:54:22

Crypto currencies: "Significantly more trading again"

The steep price increase this year is attracting the first daredevils back into crypto ETNs. Especially Bitcoin and Ethereum traders are in demand. However, prices and turnover are still far from the highs of 2021.


Jan. 26, 2023 FRANKFURT (Frankfurt Stock Exchange). Who has only this year in view, would say: it goes round again for the cryptocurrencies. Bitcoin is trading at $23,003 on Thursday morning - up 38 percent this year. Ethereum, the second most valuable cryptocurrency, is trading at $1,606, up 34 percent from the end of December. Apparently, the crypto market benefits from the generally better mood and the hope for smaller interest rate steps by central banks. However, the all-time highs are still a long way off. Bitcoin had climbed to almost 69,000 US dollars in November 2021. 

2022 was a pitch-black year for the industry. More and more bad news sent prices tumbling, such as the collapse of Terra. This was compounded by the rapid rise in interest rates, which made cryptocurrencies less attractive, and high risk aversion due to the Ukraine war and energy crisis. The collapse of FTX, by then the third largest crypto exchange in the world, then gave the currencies the final rest. At its low, bitcoin fell below $16,000. 
And the bad news from the industry does not stop: recently, the crypto exchange Genesis filed for bankruptcy for its lending division. The platform Bitzlato was suspended on money laundering charges, and its CEO was arrested. Meanwhile, FTX's collapse is being litigated: Founder Sam Bankman-Fried is accused of fraud and money laundering, among other charges. 
More sales, more purchases
That doesn't seem to matter at the moment. With the price recovery, trading in cryptocurrency ETNs is busier again. "Compared to December, volumes have picked up significantly in January, especially on the buy side," explains Nils von Schoenaich-Carolath, Managing Director Digital Assets at Bankhaus Scheich. 

Fabian Wörndl of Lang & Schwarz confirms this: "We see significantly more sales than in November and December." However, it is still little compared to 2021, he said. Much attention finds - as always - the BTCetc Bitcoin Exchange Traded Crypto (DE000A27Z304). But a lot is also going on in 21Shares Solana Staking (CH1114873776), according to Wörndl. 

"Many positions still deep in the red"

"There is more movement in the market again," says Jan Duisberg, who trades funds, ETFs and crypto ETNs for ICF Bank. However, he says those who entered in 2021 and early 2022 are still not in the black and are therefore holding back. "A lot of them got their fingers burned." When they do trade, it's mostly the major currencies, he said. Duisberg reports the most turnover in Van Eck's bitcoin and ethereum trackers (DE000A28M8D0, DE000A3GPSP7). 


Also in regular demand, he said, are 21Shares Cardano (CH1102728750), 21Shares Polkadot (CH0593331561), 21Shares Solana Staking and 21Shares Crypto Basket (CH0445689208). The latter tracks an index of five cryptocurrencies, ranked by projected 2050 market capitalization.
On Xetra, the BTCetc Bitcoin Exchange Traded Crypto, the VanEck Bitcoin and the WisdomTree Bitcoin (GB00BJYDH287) are turnover focal points on Thursday morning.

Most traded crypto ETN on Xetra in December - January figures are not yet available - was the BTCetc Bitcoin Exchange Traded Crypto, and by a wide margin. It was followed by the VanEck Bitcoin and the 21Shares Short Bitcoin (<CH0514065058>), which can be used to bet on a falling price. Also seeing a lot of turnover were 21Shares Ethereum (CH0454664027), 21Shares Bitcoin (CH0454664001) and VanEck Ethereum. In addition to Bitcoin and Ethereum trackers, there is only one currency basket on the top ten list, the 21Shares Crypto Basket. 

Jan Duisberg

"Wild West-style speculative infrastructure disappears"

The debate over stronger regulation continues. "Caroline Pham, an official with the U.S. Commodity Futures Trading Commission (CFTC), is calling for a global standard for regulating crypto to prevent cases like FTX and Terra Luna," reports issuer 21Shares. The EU is leading the way in regulation with the landmark crypto regulation MICA (Markets in Crypto Assets). Adoption by the EU Parliament was just delayed until April, but is considered certain.
"The crypto industry is at crucial crossroads and will move in a more value-creating direction," explains Hartmut Giesen in the crypto annual outlook of Hamburg-based Sutor Bank. "The Wild West-style speculative infrastructure is disappearing and making way for sustainable blockchain use cases." These include, for example, the tokenization of private equity or CO2 certificates. "Capital flows that used to go into cryptocurrencies are likely to go, to a greater or lesser extent, into these new tokenized financial instruments."


At the same time, however, Giesen is convinced that cryptocurrencies - a few of them - will endure: Bitcoin as a digital store of value, Ether and Ether-based tokens that secured the operation of the Ethereum blockchain and decentralized applications running on it, and currencies that would be used to run specialty blockchains. "Their value is based on the value created on their blockchains." 

Deutsche Börse's crypto ETN segment now comprises 96 products from 14 providers on a total of 20 individual cryptocurrencies as well as on crypto indices. All crypto ETNs tradable on Xetra are physically collateralized and listed on the Regulated Market of the Frankfurt Stock Exchange. In addition, all crypto ETNs on Xetra are centrally cleared by Eurex Clearing AG as Deutsche Börse Group's central counterparty (CCP). Through central clearing, institutional investors in particular additionally benefit from significantly reduced risks when settling transactions.

by: Anna-Maria Borse, 26 Januar 2023, © Deutsche Börse AG

Anna-Maria Borse is a finance and economics editor specializing in financial markets/stock markets and economic topics. 

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