Nyheter
Oil, Gold and Silver Rise on Fears of Iraqi Fallout
Oil, Gold and Silver Rise on Fears of Iraqi Fallout. The Islamic State in Iraq and the Levant’s (ISIS) attack in northern Iraq has driven up safehaven demand for physical gold, which saw its first positive inflows in in four weeks. Crude oil inflows were at their highest since the peak of the Arab Spring in 2011. Investors are worried that the violence could spread further south and retaliation by Shia Muslims against the predominantly Sunni ISIS, could lead to an outright civil war. Cyclical commodities like copper also received support after the Federal Reserve reiterated that it is in no rush to raise interest rates. Rising global growth still remains the consensus view, but tail risks are rising with geopolitical events. Silver appears to be a clear beneficiary from this environment given its hybrid qualities.
Iraqi conflict drives US$53.8mn into crude oil ETPs. The Islamic State in Iraq and the Levant’s (ISIS) attack in northern Iraq is likely to derail the country’s plans to increase production of crude oil this year and it is unlikely that Saudi Arabia will be able to make up for the shortfall if the crisis spreads to the south. Brent crude rose 1.8% last week in response and could go higher if the violence spreads further south at a time when seasonal demand for crude remains high. Flows into ETFS Brent (OILB) were US$45.8mn, the highest since the peak of the Arab spring in 2011.
ETFS Physical Silver (PHAG) inflows rise to a three-month high. A 3.2% rise in silver prices helped drive US$25.2mn of inflows into PHAG. With its strong correlation to gold and wide industrial applications, investors are gradually becoming more optimistic on silver. Safehaven buying and short-covering amidst the Iraqi conflict has seen the price of gold and rise, pulling up silver in its wake. With global manufacturing activity rising, industrial demand for the metal is also looking more positive and another supply deficit this year would help tighten the market further.
ETFS Wheat (WEAT) inflows rise to a four-month high. Investors in wheat ETPs were attracted by bargain prices in contrast to the futures market investors where net speculative positioning has swung to net short from net long a month ago. Wheat prices have slumped to a four-month low on the back of upward revisions to global wheat supplies by the USDA. However, at the heart of the USDA’s forecasts are higher production figures from India and Australia which could be proved wrong if the delayed monsoon in India bites into yield. Also an El Niño event, with a 70% probability of starting this summer, which normally brings drought to countries like India and Australia, could damage crop prospects further. WEAT saw US$3.5mn of inflows last week as the price gained 1.4% on the back of India’s delayed monsoon news.
Rising copper prices lead to cut in short-positions. While the probe into fraudulent activity at the port of Quingdao had been weighing on prices in recent weeks, the FOMC meeting led to a copper rally on Wednesday and Thursday after emphasising it is in no rush to raise rates. We believe that prices could rise substantially to US$7500/MT from the current US$6736/MT as manufacturing activity (highlighted in today’s better-than-expected HSBC PMI reading) and fixed asset investment in China appear to have bottomed out and are growing faster.
Key events to watch this week
Investors will remain focused on the developments in Iraq in an otherwise quite data week. Consensus expects another cut to Q1 US GDP estimates, although developments in that quarter largely reflect the effects of adverse weather rather than an enduring downturn in activity. It may grab a lot of headlines but commodity prices are unlikely to be affected. The USDA’s quarterly hogs and pigs report out on Friday will garner interest after front month prices have risen close to 50% ytd.
Important Information
This communication has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by ETF Securities (UK) Limited (”ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (”FCA”).
Please find below Hashdex monthly crypto market update and performance attribution for Hashdex Crypto-Index ETPs for October 2024.
With October often showing strong seasonality for crypto assets, this month’s results reflect a promising trend for Bitcoin, although gains were more limited across Altcoins. As outlined in our latest CIO note, “Beyond Trump and Harris: Five Congressional Races That May Impact Crypto’s Future”, several upcoming US congressional races could shape the regulatory landscape for crypto, with potential implications for institutional adoption and future price action. Bipartisan support for the asset class is expected to grow, depending on the results of key races.
We will share some updates during the week, if you need any inputs on US elections, feel free to reach out to us.
Hashdex Crypto Index ETPs: performances (USD) as of end of October 24
• Beta Index ETP – Nasdaq Crypto Index ETP (HASH or HDX1) (largest Crypto Index ETP in Europe): October +7.1%, YTD +45%, 12M +89%.
• Smart-Beta Index ETP – Crypto Momentum Index ETP (HAMO or HDXM): October -0.5%, YTD +1.2%, 12M +71%.
Market Update – October 24
October, commonly known as ”Uptober” for its seasonally strong performance for Bitcoin, continued this trend in 2024. The month began with a volatile period, as the Nasdaq Crypto Index (NCI) initially gave back gains from September. All NCI constituents declined in the first ten days, with the exception of Uniswap, which announced plans for its own layer-two network on Ethereum.
Mid-month, the sentiment shifted, with a sharp rally that drove Bitcoin close to its all-time high by the 29th. The NCI ultimately closed the month up 7.1%, significantly outpacing traditional markets as both the S&P 500 and Nasdaq 100 declined slightly. This rally coincided with a sharp increase in former president Donald Trump’s odds in election betting markets, generating additional optimism around Bitcoin.
While Bitcoin posted a robust 10.6% gain, Altcoins generally underperformed. The notable positive exception among altcoins was Solana, which rose 9.0%. In contrast, Ripple declined 18.6% due to ongoing SEC litigation, and Polygon’s MATIC dropped over 20% as it migrated to a new token model (POL).
Nasdaq Crypto Index (NCI) relative to other asset class in October 24
Source: Hashdex, as of 30/10/24.
In comparison with traditional assets, the NCI’s 7.1% gain far outpaced the S&P 500 and Nasdaq 100, both of which posted slight declines. This performance underscores the potential for crypto assets to provide upside during periods of broader market uncertainty. The majority of this outperformance was driven by Bitcoin’s strength, underscoring its role as a cornerstone of the crypto asset class and its growing appeal as a macroeconomic hedge.
Performance attribution:
Nasdaq Crypto Index (NCI)
The NCI recorded positive returns for most of its primary constituents, with Bitcoin (+10.6%) leading the gains. Solana (SOL) also contributed positively, rising 9.0%. However, Ripple (XRP) and Polygon’s MATIC weighed on the index, with losses of 18.6% and over 20%, respectively. Ripple’s decline was largely attributed to ongoing legal issues with the SEC, while MATIC’s transition to the POL token created additional downward pressure.
Source: Hashdex, as of 31/10/24.
Crypto Momentum Factor Index
The Crypto Momentum Factor Index showed a slight monthly decline of 0.5% in October, reflecting the underperformance of altcoins in general. Although Tron (TRX) remained relatively stable, other altcoins in the index faced headwinds, leading to a small monthly loss for the index.
Source: Hashdex, as of 31/10/24.
Correlation (3m) to traditional asset classes
Source: Hashdex, as of 31/10/24. NCI for Nasdaq Crypto Index.
Hashdex Nasdaq Crypto Index ETP
Largest Crypto Index ETP in Europe, AUM ~$400m
ISIN: CH1184151731 / Tickers: HASH (SIX and Euronext) or HDX1 (Xetra) – tradable in USD, EUR, CHF and GBP
Hashdex Crypto Momentum Factor ETP
ISIN: CH1218734544 / Tickers: HAMO (SIX and Euronext) or HDXM (Xetra) – tradable in USD, EUR, CHF and GBP
Nyheter
Microsoft considers bitcoin, UBS launches tokenized fund, and MicroStrategy will buy $42B in BTC
Crypto markets faced a volatile week as key macroeconomic events approached, with the upcoming US presidential election and anticipated Fed rate decision fueling uncertainty in risk assets. Bitcoin (BTC) rose 1.7%, ether (ETH) declined 1%, Solana (SOL) fell 8.2%, and the Nasdaq Crypto IndexTM (NCITM) was down 0.5%.
Microsoft to consider bitcoin investment starting December
According to a new SEC filing, Microsoft is considering the possibility of investing in Bitcoin as a hedge strategy against inflation despite opposition from its Board of Directors. This move, by one of the world’s largest companies, would mark a significant step in institutional adoption for Bitcoin.
MicroStrategy discloses plans to buy $42B of BTC
The firm announced bold plans to raise $42 billion over the next three years to acquire more bitcoin. This new wave of capital will be split equally, with $21 billion from equity issuance and $21 billion from debt offerings, in a project called the ”21/21” plan. This move, led by founder Michael Saylor, underscores bitcoin’s potential as a valuable hedge against inflation and highlights its appeal as a strategic investment option.
UBS launches its first tokenized fund on Ethereum
UBS Asset Management has launched its first tokenized fund, the USD Money Market Investment Fund Token (uMINT), a money market fund built on the Ethereum blockchain, available through authorized partners. The launch supports the growing demand for tokenized financial assets and leverages distributed technology to enhance fund issuance and distribution, as well as UBS’s broader strategy to expand its tokenization services.
Oct. 24 crypto market update & Performance attribution Hashdex Crypto Index ETPs
GSGR ETF investerar i gröna obligationer från hela världen
Microsoft considers bitcoin, UBS launches tokenized fund, and MicroStrategy will buy $42B in BTC
Altcoins struggle as elections loom
Valour introducerar världens första Physical Yield Bearing Bitcoin (1VBS) ETP i samarbete med Core Foundation, för tyska investerare på Xetra
Satoshi Unmasked? What’s At Stake?
Nytt ETC från The Royal Mint via HANetf ger tillgång till guldmarknaden med valutasäkring
Samsung’s new crypto payment option, USDA leverages blockchains, and half of hedge funds invest in crypto
Europa saknar kapacitet att försvara sig
Börshandlade fonder med månatlig utdelning
-
Nyheter4 veckor sedanSatoshi Unmasked? What’s At Stake?
-
Nyheter4 veckor sedanNytt ETC från The Royal Mint via HANetf ger tillgång till guldmarknaden med valutasäkring
-
Nyheter3 veckor sedanSamsung’s new crypto payment option, USDA leverages blockchains, and half of hedge funds invest in crypto
-
Nyheter5 dagar sedanBörshandlade fonder med månatlig utdelning
-
Nyheter3 veckor sedanEuropa saknar kapacitet att försvara sig
-
Nyheter5 dagar sedanVilka börshandlade fonder lockade mest i oktober 2024?
-
Nyheter3 veckor sedanTillgång till en brett diversifierad portfölj baserad på en värdebaserad investeringsstrategi
-
Nyheter3 veckor sedanValour flyttar sina 19 ETPer från NGM till Spotlight Stock Market
