Consumer prices in the U.S. rose by 3.2% year-over-year in October, down from 3.7% in September, but still above the Fed’s 2% benchmark. Moody’s Investors Service has cut the US credit outlook from stable to negative. In response, long-term yields soared, which is not only an indication of investor confidence in the U.S. economy but also a proxy used by many to gauge mortgage rates and risk-on assets such as equity and crypto.
Bitcoin and Ethereum are down by 1.54% and 7.82% over the past week, respectively. Biggest winners of last week were Solana (27.56%), Avalanche (66.56%), and Optimism (3.45%). In this report, we’ll walk you through the top 4 trends to remember in markets this week: what drove Ethereum’s price to break the $2K mark before retracing after a bumpy downhill from August 15? We’ll also break down the new developments on Bitcoin that might bring streaming to the network, Kraken’s new Layer 2 blockchain, and Lido decentralizing its node-infrastructure operations.
Figure 1: Weekly Price and TVL Developments of Cryptoassets in Major Sectors
Source: 21Shares, CoinGecko, DeFi Llama. Close data as of November 16, 2023.
4 Things to Remember in Markets this Week:
Ethereum Rejoins the Race
The world’s largest asset manager, BlackRock, officially submitted an application for its iShares Ethereum Trust as a Delaware statutory trust on November 9, joining a handful of firms, including ARK Invest and 21Shares, who were the first to submit their application back in September. With BlackRock’s $8.6 trillion in assets under management, the news spurred optimism in the market, making Ethereum jump by 12.54% overnight, but fundamental developments should also be credited. Increasing base fees and burn rate have returned Ethereum to its June levels, signifying a revival of on-chain activity. As shown in the figure below, Ethereum has become deflationary over the past week, strengthening its worth. However, on November 10, around $41M worth of ETH was lost in over a $100M exploit on a crypto wallet belonging to the crypto exchange Poloniex. Crypto forensics firm Arkham Intelligence showed that the hacker had close to ~$42M on Friday night. In terms of market impact, it would take ETH $8M to move upwards or downwards by 2%. Therefore, the Poloniex hack could yield short-term selling pressure on ETH of about 10%, if the hacker liquidates their looted holdings instantaneously.
Figure 2: Ethereum’s Annualized Inflation Rate and Daily Change in Supply
Source: 21.co on Dune Analytics
Streaming on Bitcoin
Bitcoin developer Robin Linus introduced BitStream, a decentralized file hosting on Bitcoin, where users can upload unique files, enabling anyone to monetize their excess bandwidth and data storage capacities without relying on trust or heavy-weight cryptography. BitStream’s pay-to-download approach solves the problem of bandwidth costs that could skyrocket beyond the initial download revenue. It allows the server to charge for each download, ensuring that the revenue scales with the popularity and demand for the media, creating a balanced and profitable ecosystem. According to the whitepaper, the uploaded files would be fraud-proof, by splitting them into fixed-sized chunks and then hashed into a Merkle tree to derive a unique fileId. This development is yet another expansion to Bitcoin’s burgeoning use cases and would onboard a diversified audience. With BitStream’s promise, Bitcoin can capture the total addressable market of data storage, which stands at at least $230B. Although BitStream’s pricing scheme is not clear yet, decentralized data storage solutions, like Filecoin and Arweave, have been proven to be a lot cheaper than Google Cloud, Amazon S3, and its other centralized peers, varying by usage, as shown in the figure below.
Figure 3: Cost of decentralized storage vs. centralized storage in 2023
Source: State of Crypto issue 9, Coingecko
Kraken Looks to Build Their Own Blockchain
In their pursuit, Kraken is exploring potential partnerships with Polygon Labs, Matter Labs, or the Nil Foundation to establish a Zero-Knowledge-powered network, setting themselves apart from Coinbase. This move isn’t surprising, given Coinbase’s Base accrued ~$5.4M in profit since its launch, equating to around $20 million in annualized profits. Further, despite a recent decline in Base’s sequencer revenue and a 30% drop in AUM over the past weeks, the network still outperforms the rest of ETH scaling solutions in terms of hosting new applications, as shown in Figure 4, indicating a robust developer ecosystem posed to generate diversified income streams. While exchanges launching their networks is not new, the current trend of building atop Ethereum eliminates the necessity for launching a token, which strategically avoids regulatory scrutiny in the current environment. In light of this, we anticipate compliant exchanges to emulate this model and seize the opportunity to capitalize on a diversified income source in the upcoming cycle.
Figure 4: Deployment of New Applications Across ETH Scaling Solutions
Source: Artemis
Lido is Decentralizing its Node-Infrastructure Operations
Lido DAO, the largest non-custodial staking provider, approved two proposals to adopt Distributed Validation Technology. DVT refers to a mechanism spreading out key management and signing responsibilities across multiple parties to reduce single points of failure and increase validator resiliency. That said, Lido will integrate DVT modules with Obol and SSV protocols, which is set to introduce a more diverse profile of node operators beyond its current list of 38 Validators and help address a key concern around centralization. This is a key development as Lido stirred a debate since it’s close to accounting for a third of staked ETH (see Figure 5),; it could have undesired influence over the network’s validation process and block production. Thus, this implementation is crucial to ensure the diversification of the protocol’s node operators and increase their reliability in case of validator failures or attempts of censorship. Conversely, SSV and Obol networks represent new primitives, so it’s essential to remain vigilant regarding any unforeseen vulnerabilities they could introduce.
Figure 5: Dominance of Entities Staking on the Ethereum Network
Source: 21co at Dune
What You Should Pay Attention To
US Credit Outlook: From Stable to Negative
Citing political polarization and fiscal deficits, Moody signals negative indicators for the U.S. economy, lowering the credit rating from stable to negative. 10 and 30-year Treasury yields rose on Monday, taking a toll on investor portfolios and making it more expensive for the government to borrow more money. In the case that the U.S. government doesn’t honor its federal debt of $33.7 trillion, the country might be paving its way to a recession. Although the bull run of Bitcoin can be likely triggered due to speculation around a potential spot ETF in the U.S., the weakening of credit ratings and sticky inflation strengthens Bitcoin’s narrative as a hedge against currency debasement.
Figure 6: 30-Y Treasury Bill Yields Plotted Against Bitcoin’s Performance (YTD)
Source: Yahoo Finance
NEAR Announcing Multiple Partnerships Aimed at Closer Alignment with Ethereum
First, Near Foundation unveiled a collaboration with Polygon Labs, marking a significant stride in building a zkWASM prover. In other words, the partnership enables WASM-based networks to validate their settlements on Ethereum, tapping into its battle-tested security guarantees. For context, WebAssembly (WASM) is an alternative operating system to Ethereum’s EVM, offering data efficiency and a versatile toolkit supporting languages like Rust and C++, and powers platforms like Solana, Cosmos, and Near.
This collaboration is pivotal as it provides developers on Polygon CDK with expanded choices for building customizable networks beyond Ethereum’s EVM constraints and using technologies like sharding that are not yet feasible on Ethereum. Finally, the integration facilitates access to Ethereum’s robust liquidity via Polygon’s shared layer, offering a strategic advantage to external non-EVM entities lacking this capability. In essence, this implementation fosters interconnectivity and interdependence between incompatible blockchain operating systems. The synergy also has the potential to propel Polygon’s ZK-EVM user base, enabling it to bridge the gap with both Ethereum and Near networks, as shown below in Figure 7.
Figure 7: Active Daily Users of Near vs Polygon ZK-EVM vs Ethereum
Source: Artemis
Near also revealed its NEAR DA, a new data availability solution offering ETH scaling networks (L2s) like Arbitrum and Optimism, a cost efficient means for posting data. For context, traditional blockchains combine all key functions such as settlement, consensus, execution and data availability, which make networks inefficient as they grow in size. Thus, the modular approach instead focuses on separating few intensive processes, like posting data on Ethereum to prove their validity, in order to help L2 streamline their operations.
In the case of Near, it’s expected to be 8000x cheaper to post data on the network than on Ethereum, specifically it would cost rollups ~$26 to post 100KB of call-data on Ethereum versus $0.0033. Near is now the second protocol offering the modular approach after Celestia announced their mainnet deployment at the end of October. This is a crucial development to help scale the Ethereum ecosystem further and diversify away from the monolithic architectures that are more complex and less flexible.
Comparatively, Near inked a partnership with EigenLabs, the company building the re-staking primitive on top of Ethereum. As a refresher, restaking refers to repurposing staked ETH to validate the security of other applications and networks. With this in mind, Near is building a fast-finality rollup solution, powered by Eigen’s Active Validator Service (AVS), or restakers, to enable near-instant transaction finalization, surpassing the current time frames of hours or days, and is 4000X cheaper than current options. This would ensure that rollups can inherit the security of Ethereum via re-staking, while benefiting from Near’s faster settlement guarantees and help address the fragmentation of liquidity amongst ETH L2s with a cross-rollup communication system in the process. These key developments align with our thesis of a multichain future, with projects seamlessly utilizing various networks in a trustless manner for their distinctive benefits, making infrastructure imperceptible to end-users, while Ethereum continues to wield significant influence in fueling the ecosystem.
Bookmarks
• Insights from our last newsletter were featured on CoinDesk.
• In collaboration with ARK Invest, 21Shares is listing 5 products in the Chicago Board Options Exchange.
• Get a digital copy of State of Crypto issue 10!
Next Week’s Calendar
These are the top 3 events we’re monitoring for next week.
• November 17: UK Retail Sales, European Central Bank’s President Christine Lagarde speaks
• November 21: FOMC Meeting Minutes
• November 23: Flash manufacturing and services PMI data for Germany, France and the UK.
Each week the 21Shares Research team will publish our data-driven insights into the crypto asset world through this newsletter. Please direct any comments, questions, and words of feedback to research@21shares.com
Disclaimer
The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction. Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof.
iShares Metaverse UCITSETF USD (Acc) (CBUV ETF) med ISIN IE000RN58M26, försöker följa STOXX Global Metaverse-index. STOXX Global Metaverse-index spårar företag från hela världen som har affärsverksamhet i metaverse-ekosystemet. Aktierna som ingår filtreras enligt ESG-kriterier (miljö, social och bolagsstyrning).
Den börshandlade fondens TER (total cost ratio) uppgår till 0,50 % p.a. iShares Metaverse UCITSETF USD (Acc) är den enda ETF som följer STOXX Global Metaverse-index. ETF:n replikerar det underliggande indexets prestanda genom fullständig replikering (köper alla indexbeståndsdelar). Utdelningarna ackumuleras och återinvesteras.
iShares Metaverse UCITSETF USD (Acc) är en liten ETF med tillgångar på 88 miljoner euro under förvaltning. Denna ETF anserades den 7 december 2022 och har sin hemvist i Irland.
Investeringsmål
Fonden strävar efter att uppnå en avkastning, genom en kombination av kapitaltillväxt och inkomst, som återspeglar avkastningen från STOXX Global Metaverse Index.
Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel DEGIRO, Nordnet, Aktieinvest och Avanza.
Jane Edmondson, Head of Index Product Strategy på TMXVettaFi, träffade Steve Darling från Proactive för att diskutera det snabbt utvecklande globala försvarslandskapet och de investeringsimplikationer som en europeisk försvarsutgiftsboom medför. Med geopolitiska spänningar på uppgång och skiftande försvarsprioriteringar måste investerare navigera efter nya möjligheter och risker i sektorn.
Edmondson lyfte fram Europas oöverträffade ökning av försvarsutgifterna, ett direkt svar på USA:s beslut att minska militärt bistånd till Ukraina. Centralt i denna förändring är EUs initiativ ”Rearm Europe Readiness 2030” på 800 miljarder euro, som syftar till att stärka den militära beredskapen. Detta inkluderar betydande investeringar i nyckelförsvarstekniker och en dedikerad kreditfacilitet på 150 miljarder euro för att förbättra militär kapacitet.
”Det kommer att bli mycket utgifter framöver,” noterade Edmondson och betonade stora tillväxtområden som artificiell intelligens, cyberförsvar, drönarteknik och avancerade artillerisystem.
Hon påpekade att ledande europeiska försvarsföretag – inklusive Rheinmetall, BAE Systems, Thales, Dassault och Leonardo SPA – kommer att dra stor nytta av denna expansion. Dessutom framträder Sydkoreas Hanwha Aerospace som en nyckelspelare i globala försvarskontrakt. Däremot upplever amerikanska försvarsföretag motvind på grund av budgetnedskärningar och inställda upphandlingsavtal, vilket leder till en relativ nedgång i sektorn.
En annan kritisk förändring av global försvarsupphandling håller på att utvecklas när traditionella amerikanska allierade omprövar sina försvarsinköp. Kanada och Portugal, till exempel, omvärderar beställningar på USA-tillverkade F-35 stridsflygplan till förmån för alternativa alternativ, som flygplan från Dassault Aviation.
Edmondson betonade att dessa geopolitiska omställningar skapar stark ekonomisk medvind, särskilt för Tyskland, som kommer att investera uppskattningsvis 500 miljarder euro i försvar under de kommande åren. Hon citerade en nyligen gjord rapport från Goldman Sachs, som förutspår att hälften av dessa utgifter direkt kommer att underblåsa BNP-tillväxten – en effekt som redan återspeglas på finansmarknaderna. Medan europeiska aktier, särskilt Euro Stoxx 50-index, tar fart, har stora amerikanska aktieindex kämpat för att hålla jämna steg.
”Detta är en kraftfull påminnelse för investerare att hålla sig diversifierade, behålla exponering utanför amerikanska marknader och allokera kapital till framväxande globala försvarsteman,” rådde Edmondson.
När globala militära strategier fortsätter att utvecklas kan investerare som positionerar sig tidigt i viktiga internationella försvarssektorer dra nytta av denna historiska förändring.
HanETF planerar en ny försvarsfond med fokus på europeiska företag som kommer att börja handlas i nästa vecka. Vi har ännu inte namnet på denna, men kortnamnet på tyska Xetra är 8RMY medan det i London blir tickern ARMY.
Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel Nordnet, SAVR, DEGIRO och Avanza.
WisdomTree Uranium and Nuclear Energy UCITSETF USD Unhedged Acc (WNUC ETF) med ISIN IE0003BJ2JS4, försöker spåra WisdomTree Uranium and Nuclear Energy UCITS-index. WisdomTree Uranium and Nuclear Energy UCITS-index spårar företag över hela världen som är engagerade inom uran- eller kärnenergiindustrin.
Den börshandlade fondens TER (total cost ratio) uppgår till 0,45 % p.a. WisdomTree Uranium and Nuclear Energy UCITSETF USD Unhedged Acc är den enda ETF som följer WisdomTree Uranium and Nuclear Energy UCITS-index. ETFen replikerar det underliggande indexets prestanda genom full replikering (köper alla indexbeståndsdelar). Utdelningarna i ETFen ackumuleras och återinvesteras.
Denna ETF lanserades den 5 mars 2025 och har sin hemvist i Irland.
WisdomTree Uranium and Nuclear Energy UCITSETF (”Fonden”) strävar efter att spåra pris- och avkastningsutvecklingen, före avgifter och utgifter, för WisdomTree Uranium and Nuclear Energy UCITS Index (”Indexet”). Indexet är utformat för att följa resultatet för företag som är involverade i uran- och kärnenergiindustrin.
Varför investera?
Få en unik strategi med hög övertygelse för investeringar i uran- och kärnenergiföretag.
Kärnenergi är avgörande för den framtida hållbara energimixen, eftersom kraven på energi ökar, kommer det att bli nödvändigt att skala upp tillförlitliga källor för ren energi.
Denna ETF erbjuder exponering mot en diversifierad korg av företag som är involverade i uran- och kärnenergimarknaden, såsom uranbrytning, byggande av kärnkraftsinfrastruktur eller bedriver avancerad forskning om framtida kärnteknik.
Analysen för urval och viktning av företag i indexet utförs av WisdomTree med betydande expertis i att konstruera tematiska index, vilket säkerställer att portföljkorgen förblir fokuserad och relevant.
Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel Nordnet, SAVR, DEGIRO och Avanza.
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