- Bitcoin reaches its highest price since May 2022 on the back of ongoing ETF optimism; Grayscale’s NAV discount continues to narrow
- Our in-house “Cryptoasset Sentiment Index” briefly declined but stays at elevated levels
- Weekly global cryptoasset ETP net inflows reached the highest level year-to-date with over 300 mn USD last week
Chart of the Week
Performance
Last week, cryptoassets managed to outperform traditional assets like equities on the back of ongoing optimism for a Bitcoin spot ETF approval in the US. Binance's 4.3 bn USD settlement with the DOJ combined with a planned complete exit of Binance from the US market have significantly increased the odds of an ultimate ETF approval as Binance's US operations were generally seen as a significant thorn in the side of the SEC.
This ongoing optimism was also accompanied by significant fund inflows.
In fact, weekly global crypto ETP flows reached their highest level year-to-date last week with over 300 mn USD in net inflows (Chart of the Week). Grayscale Bitcoin Trust's NAV discount also narrowed significantly last week signalling an increased probability of an ETF approval.
At the same time, there was a pick-up in altcoin outperformance due to an increase in risk appetite and as some idiosyncratic news fuelled optimism for Ethereum and Layer 2s like Blast in particular.
Among the top 10 crypto assets, TRON, Ethereum, and Cardano were the relative outperformers.
However, altcoin outperformance vis-à-vis Bitcoin picked up against the prior week but remains in early stages. Still only 25% of our tracked altcoins managed to outperform Bitcoin on a weekly basis.
Sentiment
Our in-house Cryptoasset Sentiment Index has briefly declined but stays relatively elevated. At the moment , 12 out of 15 indicators are above their short-term trend.
Compared to last week, we saw major reversals in the Altseason index and BTC Exchange Inflows, which declined.
The Crypto Fear & Greed Index also remains in "Greed" territory as of this morning.
Meanwhile, our own measure of Cross Asset Risk Appetite (CARA) also remains positive implying a positive sentiment in traditional financial markets.
Performance dispersion among cryptoassets has declined significantly compared to last week but continues to be relatively high . In general, high-performance dispersion among cryptoassets implies that correlations among cryptoassets have decreased which means that cryptoassets are trading more on coin-specific factors and that diversification among cryptoassets is high.
At the same time, although there has been a pick-up in altcoin outperformance last week compared to the week prior, altcoin outperformance has continued to be low with only 25% of altcoins outperforming Bitcoin on a weekly basis. In general, low altcoin outperformance is a sign of low-risk appetite within cryptoasset markets.
Flows
Last week, we saw the highest amount of net fund inflows into global cryptoasset ETPs year-to-date.
In aggregate, we saw net fund inflows in the amount of +302.9 mn USD (week ending Friday).
The large majority of these inflows focused on Bitcoin ETPs (+275.4 mn USD) and Ethereum ETPs (+26.6 mn USD). Altcoin ex ETH ETPs attracted +1.3 mn USD in net fund inflows last week.
In contrast, thematic & basket crypto ETPs experienced minor net fund outflows (-0.5 mn USD) last week.
The NAV discount of the biggest Bitcoin fund in the world - Grayscale Bitcoin Trust (GBTC) – continued to narrow significantly last week to around -8%. In other words, investors are assigning a probability of around 92% that the Trust will ultimately be converted into a Spot Bitcoin ETF.
Besides, the beta of global crypto hedge funds to Bitcoin over the last 20 trading remains relatively low with slightly less than 0.8, implying that global crypto hedge funds remain under-exposed to Bitcoin market risks.
On-Chain
Overall, on-chain activity in Bitcoin has declined somewhat last week but still remains very high.
For instance, the congestion in the mempool has eased somewhat as the mempool transaction count has declined as have mean fees and the number of coins waiting to be transferred. The mempool represents the queue of unconfirmed Bitcoin transactions. A high number of transactions in the mempool usually indicates high demand for Bitcoin transactions and block space in general.
Nonetheless, the mean number of transactions per block is still hovering near all-time highs around 4000 transactions per block and the daily total number of transactions has reached an all-time high. UTXO growth on the Bitcoin blockchain is also very high with more than 500k new UTXOs being currently created on a daily basis.
In that context, inscriptions remain very dominant on the Bitcoin blockchain with still above 60% transaction share, most of which are text-based.
Meanwhile, Bitcoin's hash rate has also been hovering near its all-time highs with currently around ~500 EH/s.
Moreover, bitcoins continued to flow out of exchanges last week. Around -25k BTC have flown out of exchanges last week on an aggregate basis according to data compiled by Glassnode. It is important to note that the bulk of these exchange outflows happened in wallets with sizes in excess of 1 mn USD.
Some Korean exchanges experienced more significant outflows which signalled some institutional buying interest in that region.
Furthermore, the negative news flow around exchange behemoth Binance resulted in around -18k BTC exchange outflows over the past week. So, Binance accounted for the bulk of aggregate BTC exchange outflows last week. Binance's BTC exchange balances have reached their lowest level since March 2023 and Binance's ETH exchange balances even reached their lowest level since January 2021.
Meanwhile, both Coinbase's BTC and ETH exchange balances remained relatively stable over the course of last week.
On a positive note, accumulation activity across various BTC wallet cohorts still remains near the strongest observed year-to-date.
Ethereum was also buoyed by increased Layer 2 on-chain activity last week. Most notably, Blast experienced a very sharp increase in its Total-Value-Locked (TVL). By November 26, 2023, Blast had more than $500 million in TVL. DefiLlama data shows that this was a substantial rise from its previous results, with approximately 512 mn USD poured into its contract. Interestingly, Blast raised its first 100 mn USD in TVL in less than twenty-four hours following launch, a sign of a receptive market and keen investor interest.
Derivatives
Open interest in both BTC futures and perpetuals mainly went sideways last week. CME still remains the biggest futures market in terms of open interest ahead of Binance this week.
The 3-months annualized rolling basis in BTC futures has increased again compared to last week and remains near year-to-date highs of around 8.3% p.a.
BTC perpetual funding rates have mostly remained positive throughout the week across various exchanges.
On the other hand, BTC options open interest have declined significantly in BTC-terms following the expiries last Friday. BTC options open interest have declined by almost -100k BTC compared to levels observed last Thursday. With that decline, we saw a significant decline in put open interest relative to call open interest as well. The BTC put-call ratio has reached the lowest level since February 2023 signalling a very low appetite for downside protection at the moment and, hence, a heightened sentiment.
BTC 1-month 25-delta option skew also remains biased towards calls at the moment with the skew still hovering near year-to-date lows. BTC 1-month option investors pay around 11% p.a. implied volatility premium for delta-equivalent calls relative to puts.
Bottom Line
- Bitcoin reaches its highest price since May 2022 on the back of ongoing ETF optimism; Grayscale’s NAV discount continues to narrow
- Our in-house “Cryptoasset Sentiment Index” briefly declined but stays at elevated levels
- Weekly global cryptoasset ETP net inflows reached the highest level year-to-date with over 300 mn USD last week
Appendix
Informations importantes
Communication à caractère promotionnel. Les informations contenues dans le présent Document sont fournies à des fins d’information et de pédagogie. Elles ne constituent ni un conseil en investissement, ni une recommandation personnalisée, ni une sollicitation en vue d’acheter ou de vendre un instrument financier.
Le présent Document (qui peut prendre la forme d’une présentation, d’un communiqué de presse, d’une publication sur les réseaux sociaux, d’un article de blog, d’une communication audiovisuelle ou d’un support similaire – ci-après le « Document ») est émis par Bitwise Europe GmbH (« BEU » ou l’« Émetteur »).
Bitwise Europe GmbH est constituée selon le droit allemand et agit en qualité d’émetteur des produits négociés en bourse (« Exchange Traded Products » ou « ETP ») mentionnés dans le présent Document. Les ETP sont émis sur la base d’un prospectus de base et de conditions définitives, susceptibles d’être complétés. Un prospectus a été publié ou, le cas échéant, sera publié conformément au Règlement (UE) 2017/1129. Les investisseurs peuvent obtenir gratuitement le prospectus de base, les conditions définitives applicables ainsi que tout supplément éventuel sur le site www.bitwiseinvestments.eu/fr
L’approbation d’un prospectus par l’autorité compétente ne constitue ni une approbation ni une recommandation des instruments financiers concernés.
Capital à risque. Les crypto-actifs sont des actifs hautement volatils et présentent un risque élevé. La valeur des investissements dans des crypto-actifs ou dans des ETP liés aux crypto-actifs peut fluctuer fortement à la hausse comme à la baisse et les investisseurs peuvent perdre tout ou partie de leur capital investi.
Les ETP liés aux crypto-actifs sont des instruments financiers complexes et peuvent ne pas convenir à tous les investisseurs. Ils peuvent exposer les investisseurs à des risques spécifiques, notamment un risque de crédit de l’émetteur, un risque de liquidité, des risques opérationnels ainsi que des risques liés au fonctionnement, à la réglementation et à la valorisation des marchés des crypto-actifs sous-jacents.
Aucun mécanisme de garantie du capital ne s’applique. Selon la juridiction et le mode de détention, les investisseurs peuvent ne bénéficier d’aucun mécanisme public d’indemnisation ou de protection des investisseurs.
Les performances passées ne constituent pas un indicateur fiable des performances futures. Toute déclaration prospective reflète des hypothèses et des anticipations et ne constitue pas une garantie de résultats futurs.
Avant toute décision d’investissement, les investisseurs doivent lire attentivement le prospectus de base, les conditions définitives applicables et notamment la section intitulée « Avertissements ». Une décision d’investissement doit tenir compte de la situation personnelle de l’investisseur, de ses objectifs, de son horizon d’investissement et de sa capacité à supporter des pertes potentielles. Le cas échéant, il convient de solliciter un conseil indépendant en matière financière, fiscale et juridique.
Un avertissement détaillé sur les risques applicables aux ETP liés aux crypto-actifs est disponible à l’adresse suivante : www.bitwiseinvestments.eu/fr/risk-warning
