Cryptocurrencies: Fans sniff the morning air

The appetite for crypto trackers is back. No wonder: The currencies were able to make strong gains recently. The bitcoin price has doubled since the beginning of the year, and the Solana price has even quadrupled.? ?

2?November 2023. FRANKFURT (B?rse Frankfurt). The Bitcoin Spot ETF in the US remains topic number one on the crypto market, specifically the question if and when it will be approved. Signs that the U.S. Securities and Exchange Commission (SEC) will grant approval soon have been mounting recently. "We believe that the approval of a listed bitcoin ETF is very likely in the coming months," commented James Butterfill, head of research at CoinShares, a U.K.-based asset manager specializing in digital assets, for example. "This will be a regulatory milestone for the industry."

Much euphoria

Already, the price has risen significantly, with bitcoin costing $35,257 on Thursday morning, the most since May 2022, more than doubling since the start of the year. However, the all-time high from 2021 at almost 69,000 US dollars, still remains far away. The price of bitcoin rival Ethereum also rose recently, albeit not as significantly. The currency currently costs 1,830 U.S. dollars, which results in a plus of 53 percent this year. The jump in Solana is even greater, the price has quadrupled since the beginning of the year to currently 43 US dollars. However, the demise of the crypto exchange FTX also particularly weighed on Solana. The all-time high was 260 US dollars.

Bitcoin as "digital gold"?

The bitcoin halving expected for mid-April 2024 also provides support. "Before bitcoin's halving, the cryptocurrency always developed positively," notes Jan Altmann from the issuer ETC Group. Last but not least, bitcoin is also acting as a safe haven at the moment, he adds. "On the stock markets, prices have been on a downward slide since mid-September. Bitcoin has already proven its properties as 'digital gold' in the past." The trial of the founder of the bankrupt crypto exchange FTX, Sam Bankman Fried, on the other hand, hardly weighs. A verdict is expected in mid-November.

High ETN inflows, Solana trackers also extremely popular

The news led to significantly more interest in cryptocurrencies. "Digital investment products saw the highest inflows in a week since July 2022 in the last week of October," reports Butterfill of CoinShares. Altmann also reports more turnover and high inflows, especially into ETC Group Physical Bitcoin (DE000A27Z304). "In October alone, these amounted to more than 300 million euros. Also in demand: bitcoin trackers from CoinShares and 21Shares. ETNs on other cryptocurrencies also benefited, Altmann notes. Higher inflows were seen in Ethereum ETNs from CoinShares and 21Shares, for example, as well as the 21Shares Solana Staking (CH1114873776).

Bernard Wenger of issuer 21Shares confirms the picture: "There were high inflows into crypto ETNs in October, especially bitcoin products." He reports small outflows for crypto baskets. "In altcoins, Solana in particular stood out with significant inflows."

"There's a lot more going on again"

"We had a lot more going on last week," also reports Leo Puschmann, who trades crypto ETNs at Lang & Schwarz, among others. "Now it's a little quieter." Bitcoin ETNs such as the 21Shares Bitcoin (CH0454664001) and Ethereum trackers such as the ETC Group Physical Ethereum (DE000A3GMKD7) are trading a lot on both sides, he said, as is the 21Shares Solana Staking. He sees more buying for the 21Shares Ripple (CH0454664043) and the VanEck Crypto Leaders (DE000A3GWEU3), a crypto basket.

by: Anna-Maria Borse , 2?November 2023 ? Deutsche B?rse AG