CAM | Market update | November 2023

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October more than lived up to its name as 'Uptober' once again. Bitcoin recorded a performance of around 28.5% in the past month. A relevant altcoin rally has already started, after which Bitcoin's dominance has fallen again slightly following its recent strong rise. However, we see a not insignificant probability that altcoin growth could lose momentum once again. Their market capitalization has mostly fallen again before the larger inflows have taken place, even if over USD 70 billion in market capitalization is a considerable increase. Thanks to the higher probability of ETF approval, Bitcoin was able to gain momentum in the second half of October in particular and significantly exceed the important level of the 200-week average (currently at USD 28,700).

The very solid monthly close above this level also speaks for itself, even if setbacks cannot be ruled out. For some, this breakthrough is the final signal that the bear market territory has been exited from a crypto perspective. Despite the newfound euphoria in the crypto sector, some indicators are showing cracks in the US economy. Whether Larry Fink, CEO of BlackRock, is right with his statement that crypto could represent a 'flight to quality' remains to be seen.

BlackRock tokenized on JPM network (11.10.23)

Another blockchain development in the financial sector: JPMorgan carries out the first live transaction for the settlement of collateral on a blockchain basis. BlackRock tokenizes money market fund shares, which are then almost instantly transferred to Barclays as collateral for an OTC derivatives trade. The 'Tokenized Collateral Network' (TCN) works on the Onyx blockchain, which in turn is based on Ethereum. This allows margin requirements to be met faster and more cost-effectively. This big step shows how the tokenization of traditional financial assets is creating real-world use cases.(Source)

SEC does not want to ETF ruling not blocked (13.10.23)

According to Reuters, a source says that the SEC will not block the Grayscale Bitcoin ETF. According to Bloomberg analyst James Seyffart, this could be a decisive step. Nevertheless, SEC approval remains uncertain. Grayscale, BlackRock and other providers are competing for the first Bitcoin ETF, which could make it easier for institutional investors to access Bitcoin and potentially boost its price. (Source | Source 2)

Grayscale-Conversion and ETF update (14.10.23)

According to various sources, the SEC decided last Friday that it will not appeal the court ruling in favor of Grayscale. ETF analysts at Bloomberg have confirmed this, but also say that this does not result in an immediate approval to convert to an ETF. Exchange between the two parties should start in the next two weeks. The Bloomberg experts also assume that the chances of ETF approval by the deadline of ARK and 21Shares on 10.01.2024 are 90%. The recent additions to the application by ARK suggest constructive and promising developments.(Source)

BlackRock senses crypto demand worldwide (17.10.23)

"Bitcoin rally as a 'flight to quality' - BlackRock CEO Larry Fink sees the recent rise in Bitcoin as more than just a positive movement due to rumors about spot ETFs. He interprets it as a sign of the growing interest in cryptocurrencies. Bloomberg analysts rate the chances of a Bitcoin spot ETF being approved by January 2024 at 90%. Institutions such as Fidelity and Grayscale are also awaiting SEC approval. (Source)

HAPPY BIRTHDAY BITCOIN White Paper (31.10.23)

October 31st marked the 15th anniversary of the Bitcoin White Paper, published by Satoshi Nakamoto in 2008. The paper laid the foundation for Bitcoin as the first decentralized electronic cash system without the need for trusted parties, addressed the double-spend problem and offered an alternative to the trust-based financial model. Despite controversy and copyright claims, the paper remains a foundational work for Bitcoin, which is now a global asset.(source)

MiCA Introduction planned before 2026 deadline (31.10.23)

Spain plans to introduce the EU crypto regulations (MiCA) as early as December 2025, six months ahead of the EU-wide deadline in July 2026. This is intended to provide legal certainty and better protection for investors. Major crypto exchanges such as Coinbase and Kraken have already obtained local licenses in Spain.(Source)

SNB launches Phase III in wCBDC-project (2.11.23)

Following the first two phases I and II, the Swiss National Bank (SNB), in cooperation with six commercial banks (BCV, Basler KB, Commerzbank, Hypi Lenzburg, UBS and ZKB) and SIX Swiss Exchange, is launching the Helvetia Phase III pilot project to test the issuance of digital central bank currencies (CBDCs) in wholesale trading. The project builds on findings from phases 1 and 2, which were gained by the BIS Innovation Hub, the SNB and SIX. It aims to test the effectiveness of CHF-wCBDCs in the settlement of digital securities transactions. Participating banks will issue digital Swiss franc bonds to collateralize transactions settled via SDX (SIX Digital Exchange) against wCBDC. The pilot run is scheduled from December 2023 to June 2024. In parallel, the Swiss Financial Market Supervisory Authority is working with international partners on further crypto pilot initiatives.(Source)

Bitcoin is 'exponential gold' (2.11.23)

Jurrien Timmer from Fidelity Investments sees Bitcoin as 'exponential gold'. He sees Bitcoin as an effective store of value and hedge against inflation, comparable to gold but with the potential for faster growth. Fidelity Digital Assets is one of the largest asset managers already offering Bitcoin and Ether services, while Fidelity is awaiting approval for a Bitcoin ETF. (source)

SGKB opens its doors for Bitcoin & Ethereum (2.11.23)

St. Galler Kantonalbank is now offering trading in Bitcoin and Ethereum, starting with a select group of clients. This marks the long-established bank's entry into the cryptocurrency market, with plans to expand its offering based on customer demand. (Source)

Ratingagency upgrades El Salvador (8.11.23)

S&P has upgraded El Salvador's rating from CCC+ to B- with a stable outlook. Progress in debt refinancing has reduced the default risk, regardless of the recovery in the Bitcoin price. Successes in Bitcoin projects could further strengthen the credit rating. Although El Salvador only holds 2,381 Bitcoins, this can have a significant impact in its small economy.(Source)

Binance Expands its own app (8.11.23)

Another innovation in terms of Web3 establishment: Binance is revolutionizing self-management with the new Web3 wallet: the innovative MPC technology gives users more control and security by splitting keys into three shares, thus reducing the risk of loss. Binance is leading the way by making access to DeFi (integration with existing app) easier and more secure. This lowering of entry barriers and simplified handling should further strengthen the acceptance of Bitcoin and co.(Source)

Ethereum ETF from Blackrock? (9.11.23)

The price of Ether has surpassed the 2,000 dollar mark, influenced by the prospect of an Ethereum ETF from BlackRock. The expectation that BlackRock will launch such an ETF through its iShares brand has led to a price increase of eight percent within 24 hours and ten percent over a week. Analysts at Bloomberg confirm the potential for such a fund, which would be particularly attractive to institutional investors.(Source)

EU Parliament waves Data Act through (10.11.23)

The EU Parliament has clearly adopted the Data Act, which contains new data protection rules and is specifically aimed at AI and the Internet of Things. This is intended to "optimize existing business models and processes*. Despite criticism from the crypto industry regarding a 'kill switch' function for smart contracts, the Federal Ministry of Finance assures that blockchain business models will remain unaffected. The Act still has to be confirmed by the EU Council. (source)

Bitcoin On-Chain Analysis

Bitcoin supply is now proving to be tight, which is underlined by certain indicators that are trading at all-time highs. We have already spoken several times about the long-term (LTH) and short-term (STH) investors who are giving important signals. The divergence of the balances of these two groups is an indication of the conviction of the more experienced investors. As can be seen on the right, the holdings of BTC investors with a weighted duration of more than 155 days are rising steadily. In combination with a trend towards rising demand due to ETF opportunities and the further tightening of supply due to the halving in April 2024, exciting months are therefore likely to lie ahead. Even if the selling risk from LTH has increased slightly due to the higher prices, the levels are still low in a historical context.

Did you know...? 

that a book has made predictions that today among other things are remarkably relevant today in the context of cryptocurrencies such as Bitcoin?

In the 1990s, a book entitled "The Fourth Turning" was published by authors William Strauss and Neil Howe. This book presented a fascinating theory about historical cycles and social change. Strauss and Howe argued that history follows a pattern of about 80-100 years and can be broken down into smaller cycles called "turnings".

The theory of "The Fourth Turning" states that every "turning point" is accompanied by a crisis that triggers a fundamental change in society. These crises are defining moments that reshape the social, economic and political fabric. Interestingly, the book also wrote about how generations play a crucial role in these "turnings" and how their values and attitudes influence the development of society.

Now that we are in the 21st century, many people have started to draw parallels between the predictions of "The Fourth Turning" and current events. Especially in the area of cryptocurrencies such as Bitcoin, some see a connection to the theory of the Fourth Turning.

Bitcoin was created by Satoshi Nakamoto in 2009 and has attracted considerable attention in recent years. It is seen as a possible alternative to traditional fiat money and as a hedge against inflation and economic uncertainty. The idea that Bitcoin could gain importance in times of economic crisis 

could win, fits well with the idea of a "fourth turning point" in which big changes are taking place. Some argue that Bitcoin and other cryptocurrencies could play a role in shaping our financial future by providing decentralized and resilient systems. This could reduce the influence of financial institutions and governments and give people more control over their finances.

While the predictions of "The Fourth Turning" are not accepted by everyone and can certainly be controversial, it is interesting to observe how historical theories and current events, particularly in the field of cryptocurrencies, can be linked. It remains to be seen to what extent these connections will prove to be true in the future and to what extent Bitcoin and other cryptocurrencies will play a role in times of social upheaval.

Market Commentary

Due to various uncertainties and a new high in October, yields on long-dated US government bonds have once again come into focus. These have now fallen again as the Fed has become less restrictive and the outlook for the economy has deteriorated. Sales of US government bonds by China were also examined. A less dramatic picture emerges if the decline in Chinese holdings is put into perspective by the valuation of the bonds at market prices. Nevertheless, the huge economies of China and Japan have reduced their holdings of US debt significantly in recent years. It is precisely these loans to the US that worry market observers, as the debt service is growing and has now reached dimensions that many consider difficult to control. Especially if further debt has to be taken on

and some countries will no longer necessarily be buyers. For some, Bitcoin offers a valuable alternative in such developments. The events of recent days show that crypto does seem to be attracting some attention again. Previously, it was regularly argued that the crypto market could not pick up as long as the central banks did not loosen the reins. However, current events could show that ETF developments are now being priced in. Even if the approved spot ETFs turn out to be a 'sell-the-event' event, demand is likely to have a positive effect at least in the medium term by shifting into exchange-traded funds. In our view, there is a clear chance that the prices of Bitcoin and Co. will move in the desired direction when the major entities take the reins, despite any adversities for the US and global economy.

Deepen your understanding of cryptocurrencies

Entertaining and informative. Our Youtube videos on cryptocurrencies offer versatile insights into the crypto world. If you have a small time budget, but a need to quench your thirst for knowledge and broaden your horizons, this is the ideal format.

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A significant proportion of our customers have a voluntary uncommitted investment plan, which enables them to pursue a long-term average cost strategy. In case of lower market prices, the cost prices can thus be reduced. To check your individual suitability for an investment plan, please contact us if you are interested.

(*Information: bitcoin and Bitcoin: bitcoin lowercase is used in the crypto domain to denote the monetary unit. Bitcoin capitalized refers to the network as a whole. For simplicity, we use upper case in this newsletter).

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