- Last week, most cryptoassets outperformed traditional assets. While the rally in Bitcoin halted, crypto investors appear to have rotated into altcoins.
- Overall market sentiment remains at elevated levels as our in-house “Cryptoasset Sentiment Index” continues to signal a bullish sentiment.
- Consistent with this recent change in market leadership, weekly fund flows into Ethereum & altcoin ETPs have reached their highest level year-to-date while Bitcoin ETP flows turned negative last week. US spot Ethereum ETFs also had their highest daily net inflow ever recorded since trading launch, last Friday.
Chart of the Week
US Spot Ethereum ETF Fund Flows
Source: Bloomber, Bitwise Europe; data subject to change
Performance
Last week, most cryptoassets outperformed traditional assets as the rally in Bitcoin halted and crypto investors appear to have rotated into altcoins.
In fact, we have seen one of the most significant outperformances of altcoins vis-à-vis Bitcoin last week. This has led to a significant shift in market cap rankings as well. In particular, XRP has flipped Solana (SOL) in terms of market cap ranking and is now the 3rd most valuable cryptoasset just behind Ethereum (ETH) and Bitcoin (BTC).
As a result, Bitcoin's market cap dominance has decreased from a cyclical high of 61.7% recorded on the 21 st of November to around 56.8% at the time of writing this report.
Consistent with this recent change in market leadership, weekly fund flows into Ethereum & altcoin ETPs have reached their highest level year-to-date while Bitcoin ETP flows turned negative last week. US spot Ethereum ETFs also had their highest daily net inflow ever recorded since trading launch, last Friday (Chart-of-the-Week).
In general, last week saw the highest divergence among global ETP fund flows we have seen in 2024 so far.
Cross Asset Performance (Week-to-Date)
Source: Bloomberg, Coinmarketcap; performances in USD exept Bund Future
Top 10 Cryptoasset Performance (Week-to-Date)
Source: Coinmarketcap
In general, among the top 10 crypto assets, XRP, Shiba Inu, and Cardano were the relative outperformers.
Overall altcoin outperformance vis-à-vis Bitcoin has continued to be high last week, with around 80% of our tracked altcoins managing to outperform Bitcoin on a weekly basis. Ethereum also outperformed Bitcoin significantly last week.
Sentiment
Overall market sentiment remains at elevated levels as our in-house “Cryptoasset Sentiment Index”continues to signal a bullish sentiment.
At the moment, 13 out of 15 indicators are above their short-term trend.
We comntinue to obsetve high sentiment readings in indicators like the crypto dispersion index or the BTC perpetual funding rate.
The Crypto Fear & Greed Index continues to signal an “Extreme Greed” level of sentiment as of this morning.
Performance dispersion among cryptoassets has continued to hover near the highest level since March 2024. This signals that altcoins have become less correlated with the performance of Bitcoin.Altcoin outperformance vis-à-vis Bitcoin has also continued to be high last week, with around 80% of our tracked altcoins managing to outperform Bitcoin on a weekly basis. The relative performance of Ethereum vis-à-vis Bitcoin has also picked up significantly.
In general, increasing (decreasing) altcoin outperformance tends to be a sign of increasing (decreasing) risk appetite within cryptoasset markets and the latest altcoin outperformance continues to signal a very positive risk appetite at the moment.
Meanwhile, sentiment in traditional financial markets as measured by our in-house measure of Cross Asset Risk Appetite (CARA) has continued to be rather mediocre last week. The index still signals a neutral cross asset risk appetite.
Fund Flows
Weekly fund flows into global crypto ETPs have decelerated last week due to a decline in global Bitcoin ETP fund inflows while net inflows into altcoin ETPs have picked up significantly.
Global crypto ETPs saw around +583.7 mn USD in weekly net inflows across all types of cryptoassets which is a significant deceleration compared to prior week's +2,940.5 mn USD in weekly net inflows.
This was mostly due to a decline of net flows into global Bitcoin ETPs that saw net outflows totalling -202.0 mn USD last week, of which -138.1 mn USD in net inflows were related to US spot Bitcoin ETFs alone.
The Bitwise Bitcoin ETF (BITB) in the US also saw a net outflows, totalling -199.7 mn USD last week.
In Europe, the Bitwise Physical Bitcoin ETP (BTCE) saw net outflows equivalent to -17.6 mn USD, while the Bitwise Core Bitcoin ETP (BTC1) also experienced minor net outflows of around -1.3 mn USD.
Outflows from the Grayscale Bitcoin Trust (GBTC) accelerated somewhat, with around -194.4 mn USD in net outflows last week. The iShares Bitcoin Trust (IBIT) continued to see positive net inflows of +405.3 mn USD last week.
Meanwhile, flows into global Ethereum ETPs accelerated significantly with around +705.3 mn USD in net inflows, after +84.3 mn USD in net inflows the week before.
US Ethereum spot ETFs saw their highest daily net inflow ever recorded since trading launch with around +466.5 mn USD in net inflows on aggregate (Chart-of-the-Week). The Grayscale Ethereum Trust (ETHE) continued to see minor net outflows of around -27.7 mn USD last week.
The Bitwise Ethereum ETF (ETHW) in the US managed to attract +10.3 mn USD in net inflows last week.
In Europe, the Bitwise Physical Ethereum ETP (ZETH) experienced minor negative net flows of -0.1 mn USD while the Bitwise Ethereum Staking ETP (ET32) continued to attract capital with +0.3 mn USD in net inflows.
Altcoin ETPs ex Ethereum also saw positive net inflows with around +133.7 mn USD last week. The Bitwise Physical Solana ETP (ESOL) managed to attract +0.6 mn USD last week.
In contrast, investors continued to repatriate capital from thematic & basket crypto ETPs with around -53.3 mn USD in net outflows on aggregate last week. The Bitwise MSCI Digital Assets Select 20 ETP (DA20) saw sticky AuM (+/- 0 mn USD).
Meanwhile, global crypto hedge funds increased their market exposure to Bitcoin last week again. The 20-days rolling beta of global crypto hedge funds' performance to Bitcoin increased to around 0.86 per yesterday's close.
On-Chain Data
In general, Bitcoin on-chain metrics have continued to be very positive despite the recent break in Bitcoin's rally.
As we have outlined in our previous report, one of the major reasons why bitcoin failed to cross the 100k USD mark is probably related to the fact that net buying volumes on bitcoin spot exchanges already turned negative due to high profit-taking by investors.
Net buying volumes on BTC spot exchanges have continued to be negative with around -1.04 bn USD in net selling volumes last week.
However, the pace of profit-taking by both long-term and short-term holders of bitcoin has significantly declined compared to the week before.
That being said, there has been a temporary shift by short-term holders to realizing losses, especially when bitcoin fell below 91k USD last week which marked a temporary bottom.
In general, the overall supply shock in Bitcoin continues to build up despite the recent pick-up in realized profits. Bitcoin's illiquid supply has reached a new all-time high while exchange balances hit a new multi-year low.
Almost 75% of supply is deemed 'illiquid' according to Glassnode while less than 14% of supply remains on exchanges.
Moreover, whales continue to send bitcoins off exchange on a net basis. More specifically, BTC whales have sent -5,694 BTC off exchanges last week, signalling continuing buying interest by whales. Whales are defined as network entities that control at least 1,000 BTC. Overall exchange balances also continue to drift lower as a result.
What is more that BTC miners are selling less bitcoins into the market as the aggregate BTC holdings miners has started to drift upwards which implies that miners are selling less than they are mining on a daily basis. This is exacerbating the current supply deficit in the market even further.
Futures, Options & Perpetuals
Last week, BTC futures open interest declined significantly in BTC-terms by around -41k BTC in open interest. Traders seem to have exited positions as there was neither a significant increase in BTC long nor short futures liquidations.
However, BTC perpetual funding rates have declined somewhat but still remain elevated which signals ongoing bullish sentiment among BTC perpetual traders.
When the funding rate is positive (negative), long (short) positions periodically pay short (long) positions. A positive funding rate tends to be a sign of bullish sentiment in perpetual futures markets at the moment.
The BTC 3-months annualised basis has continued to drift higher once again to around 16.1% p.a. averaged across various futures exchanges.
Besides, BTC option open interest also decreased significantly from its previous all-time high on account of the weekly and monthly expiries on Friday. The put-call open interest ratio spiked briefly to the highest level since June 2022 on Thursday before falling back to significantly lower levels.
This signals that many puts have expired without renewal, i.e. options traders have reduced their relative put positioning after Friday's expiry.
The 1-month 25-delta skew for BTC also remains near year-to-date lows, still signalling a high appetite for call options and bullish sentiment. At the time of writing, the 1-month skew is still significantly more biased towards call options, with a premium of around 9.3% p.a. for delta-equivalent calls.
BTC option implied volatilities have declined somewhat as the market halted its rally.
At the time of writing, implied volatilities of 1-month ATM Bitcoin options are currently at around 55.4% p.a.
Bottom Line
- Last week, most cryptoassets outperformed traditional assets. While the rally in Bitcoin halted, crypto investors appear to have rotated into altcoins.
- Overall market sentiment remains at elevated levels as our in-house “Cryptoasset Sentiment Index” continues to signal a bullish sentiment.
- Consistent with this recent change in market leadership, weekly fund flows into Ethereum & altcoin ETPs have reached their highest level year-to-date while Bitcoin ETP flows turned negative last week. US spot Ethereum ETFs also had their highest daily net inflow ever recorded since trading launch, last Friday.
Appendix
Bitcoin Price vs Cryptoasset Sentiment Index
Source: Bloomberg, Coinmarketcap, Glassnode, NilssonHedge, alternative.me, Bitwise Europe
Cryptoasset Sentiment Index
Source: Bloomberg, Coinmarketcap, Glassnode, NilssonHedge, alternative.me, Bitwise Europe; *multiplied by (-1)
Cryptoasset Sentiment Index
Source: Bloomberg, Coinmarketcap, Glassnode, NilssonHedge, alternative.me, Bitwise Europe
TradFi Sentiment Indicators
Source: Bloomberg, NilssonHedge, Bitwise Europe
Crypto Sentiment Indicators
Source: Coinmarketcap, alternative.me, Bitwise Europe
Crypto Options' Sentiment Indicators
Source: Glassnode, Bitwise Europe
Crypto Futures & Perpetuals' Sentiment Indicators
Source: Glassnode, Bitwise Europe; *Inverted
Crypto On-Chain Indicators
Source: Glassnode, Bitwise Europe
Bitcoin vs Crypto Fear & Greed Index
Source: alternative.me, Coinmarketcap, Bitwise Europe
Bitcoin vs Global Crypto ETP Fund Flows
Source: Bloomberg, Bitwise Europe; ETPs only, data subject to change
Global Crypto ETP Fund Flows
Source: Bloomberg, Bitwise Europe; ETPs only; data subject to change
US Spot Bitcoin ETF Fund Flows
Source: Bloomberg, Bitwise Europe; data subject to change
US Spot Bitcoin ETFs: Flows since launch
Source: Bloomberg, Fund flows since traiding launch on 11/01/24; data subject to change
US Spot Bitcoin ETFs: 5-days flow
Source: Bloomber; data subject to change
US Bitcoin ETFs: Net Fund Flows since 11th Jan mn USD
Source: Bloomberg, Bitwise Europe; data as of 29-11-2024
US Sport Ethereum ETF Fund Flows
Source: Bloomberg, Bitwise Europe; data subject to change
US Sport Ethereum ETFs: Flows since launch
Source: Bloomberg, Fund flows since trading launch on 23/07/24; data subject on change
US Sport Ethereum ETFs: 5-days flow
Source: Bloomberg; data subject on change
US Ethereum ETFs: Net Fund Flows since 23rd July
Source: Bloomberg, Bitwise Europe; data as of 29-11-2024
Bitcoin vs Crypto Hedge Fund Beta
Source: Glassnode, Bloomberg, NilssonHedge, Bitwise Europe
Altseason Index
Source: Coinmetrics, Bitwise Europe
Bitcoin vs Crypto Dispersion Index
Source: Coinmarketcap, Bitwise Europe; Dispersion = (1 - Average Altcoin Correlation with Bitcoin)
Bitcoin Price vs Futures Basis Rate
Source: Glassnode, Bitwise Europe; data as of 2024-12-01
Ethereum Price vs Futures Basis Rate
Source: Glassnode, Bitwise Europe; data as of 2024-12-01
BTC Net Exchange Volume by Size
Source: Glassnode, Bitwise Europe
AVVISO IMPORTANTE:
Questo articolo non costituisce consulenza finanziaria, né rappresenta un'offerta o un invito all'acquisto di prodotti finanziari. Questo articolo è solo a scopo informativo generale, e non vi è alcuna assicurazione o garanzia esplicita o implicita sulla correttezza, accuratezza, completezza o correttezza di questo articolo o delle opinioni in esso contenute. Si consiglia di non fare affidamento sulla correttezza, accuratezza, completezza o correttezza di questo articolo o delle opinioni in esso contenute. Si prega di notare che questo articolo non costituisce né consulenza finanziaria né un'offerta o un invito all'acquisizione di prodotti finanziari o criptovalute.
PRIMA DI INVESTIRE IN CRYPTO ETP, GLI INVESTITORI POTENZIALI DOVREBBERO CONSIDERARE QUANTO SEGUE:
Gli investitori potenziali dovrebbero cercare consulenza indipendente e prendere in considerazione le informazioni rilevanti contenute nel prospetto base e nelle condizioni finali degli ETP, in particolare i fattori di rischio menzionati in essi. Il capitale investito è a rischio, e le perdite fino all'importo investito sono possibili. Il prodotto è soggetto a un rischio controparte intrinseco nei confronti dell'emittente degli ETP e può subire perdite fino a una perdita totale se l'emittente non adempie ai suoi obblighi contrattuali. La struttura legale degli ETP è equivalente a quella di un titolo di debito. Gli ETP sono trattati come altri strumenti finanziari.
