Jersey-based CoinShares Launches Physically-backed Litecoin (LTC) ETP on SIX Exchange

Jersey-based CoinShares Launches Physically-backed Litecoin (LTC) ETP on SIX Exchange

  • CoinShares launches Litecoin electronic-traded products (ETP) on Tuesday.

One of Europe’s largest digital asset investment firms, CoinShares, announced the launch of its physically-settled Litecoin electronic-traded products on Swiss-based SIX exchange. Each ETP contract will be backed by 0.20 LTC (~$38, as of writing), and will trade under the ticker symbol, LITE.

The Litecoin ETP is the seventh digital asset added to the company’s portfolio, adding to the $4 billion assets under management by the investment firm. CoinShares Physical, the firm’s ETP investment arm, holds two-thirds of its assets in Bitcoin, with Ethereum gradually taking up a larger share. The post reads,

“Each unit of LITE is backed with 0.20 litecoins at launch, providing investors with passive exposure to the Litecoin network’s native asset.”

LITE will carry a base fee of 1.5% p.a., and the base currency is set to USD only. Chief Revenue Officer of CoinShares, Frank Spiteri commented,

“As demand for digital assets amongst the traditional investment community steadily increases, we are starting to see the green shoots of demand for investment exposures outside of the top two dominant networks.”

The Jersey-based firm reported an explosive quarter in Q1 2021, with an 11% growth in total Bitcoin and Ethereum inflows reaching the $4.5 billion mark.

Litecoin currently trades at $223 and ranks ninth on Coingecko’s largest market cap list with a total market cap of $14.8 billion.

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Author: Lujan Odera

Bitcoin Funds Attracted $4B in Inflows in 2020, CoinShares AUM Surges to $15B

Digital asset manager CoinShares saw its assets under management (AUM) rising to an all-time peak of $15 billion, which were standing at just $2.57 billion at the end of 2019.

This surge is the result of institutional investors pumping the second-highest amount on record, $429 million, into the company’s crypto funds, for the week ending Dec. 7.

Grayscale’s assets under management have risen to over $12.4 billion by amassing inflows of $4.3 billion this year. Just last week, the world’s largest crypto fund had more than $336 million in inflows.

“On an anecdotal level, based on our client conversations over the course of 2020, we have seen a decisive shift from enquiries of a speculative nature to those that begin with comments such as, ‘bitcoin is here to stay, please help us understand it,’” said James Butterfill, investment strategist at CoinShares.

“Given the levels of interest, this suggests we are only on the cusp of institutional adoption rather than it cooling down,” he added.


Source: CoinShares

The second-largest cryptocurrency Ethereum also saw inflows of US$87m, representing 20% of total inflows, far greater than its current share of 14%.

Bitcoin-focused funds attracted inflows of $334.7 million last week, bringing the total inflows so far this year to nearly $4 billion.

In contrast to this growth, gold experienced outflows of a record $9.2 billion over the last four weeks from its investment products, while bitcoin saw inflows totaling $1.4 billion during the same period, as per CoinShares latest report.

However, inflows into gold products were higher in the entire year at $45.7 billion.

The CoinShares report attributes these gains to the weak US dollar, which highlighted the fears of excessive monetary policy, combined with worries over management of the COVID crisis.

This is a period when gold should outperform; as such, the report believes, “investors are choosing to allocate to Bitcoin to help diversify the limited-supply asset component of their portfolios.”

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Author: AnTy

CoinShares Reveals 5 Possible Scenarios Post BTC Halving; Which Outcome Is Likely?

CoinShares, a crypto investment advisory firm released a research report discussing various outcome scenarios of the upcoming Bitcoin block reward halving and its impact on the crypto industry. The halving event has brought back the attention on Bitcoin more than ever as it is evident from Google metrics data showing that the searches for the ‘Bitcoin Halving’ term have risen by 4 times that of pre-2016 halving event. Apart from that many other metrics such as the number of non-zero bitcoin wallets, numbers of new users, have peaked significantly as well showing the mammoth interest that the event has generated.

The pre-halving period has also brought back the trend of price predictions among several trade pundits many of whom believe that post halving Bitcoin price would rise to 5-figure mark. While price prediction in the crypto space has never aged well, that does not seem to deter these analysts from putting their bet on Bitcoin. A majority of the crypto-verse is highly bullish about the outcome, however, there are few others who also believe the halving event won’t have any major impact on BTC price.

CoinShares research on such possible outcomes was published on May 4th where the investment advisory firm’s head of research, Christopher Bendiksen discussed five possible outcomes of the event.

CoinShares Research on Possible Outcomes

1. The Halving Would Cause a Mining Death Spiral:

The first possible outcome of the halving which was considered by CoinShares was the chances of Halving leading to a Mining death spiral, where it was speculated whether the low cost of Bitcoin post halving would force miners to bailout from the Bitcoin game, which in turn would have a catastrophic impact on the network as no miners mean no transaction confirmation which would completely shut the Bitcoin network down.

However, the research found that the likelihood of such an outcome is zero and it is next to impossible that anything of that magnitude would occur.

2. Bitcoin Would Follow Stock-to-Flow and Rise to New Highs:

The second possible outcome post halving could be that the Bitcoin price follows the stock-to-flow chart and reach new highs. Stock-to-flow chart measures the scarcity of an asset and how the supply-demand scenarios play in. Bitcoin with its 21 million limited supply is only behind Gold in terms of scarcity and the upcoming halving event would make it even scarcer than gold.

The research believes there is a high likelihood of Bitcoin following the stock-to-flow chart which predicts its price to reach near $288k by the end of 2024

3. Traders Who Bought the Rumors Would Sell the News:

The third scenario under consideration was that a majority of the traders have jumped in prior to the bitcoin halving event based on rumors of a possible bull run. The Coinshares analysis suggested that although it is hard to analyze this outcome since it would require hard data on what percentage of trades bought in based on the rumors.

However, traders mostly invest based on retail demands, and thus they concluded that the chances of this scenario playing out are highly unlikely and even if traders sell their assets it wouldn’t be on a scale that it would impact bitcoin’s price.

4. The Halving Will Cause Extra Selling Pressure From Miners, Driving Prices Down:

The fourth scenario under consideration was that the block reward halving would cut down the profits of miners and if the prices don’t pick up they might be forced to sell their holdings leading to falling in Bitcoin price.

The Coinshares research analyzed that miners enjoy Bitcoin prices higher than their ROI breakeven mining costs, can help them in saving coins they get in the mining process, which in turn helps the Bitcoin price as well. However, if the Bitcoin price falls below the ROI breakeven line and is less, miners are not only forced to sell their mined coins but also their reserves which could lead to a decline in Bitcoin price.

CoinShares concluded that the chances of this scenario playing out is quite thin and chances of it even occurring would require a few other factors to play in especially scenario three.

5. The Halving Will be a Big Fat Nothing-Burger (At Least Initially):

The final possible scenario that might occur is actually, ‘nothing.’ This scenario suggests that Bitcoin halving would not have any impact on its prices i.e bitcoin would move between 1%-5% on both sides, but nothing out of the blue or headlines worthy would follow the Bitcoin halving event.

This scenario is based on the assumption that the supply-demand dynamics would take some time to kick-in but it would not have any impact right after the halving. CoinShares research suggest that the chances of this scenario playing out is highly likely and has been the case in the past event. Where Bitcoin halving in 2016 did not have any impact on BTC price almost for one and a half years before BTC broke into a bull run by the end of 2017

The study concludes saying,

“In our opinion, the likely outcome of the halving is a positive supply-side impact over the mid- to longer-term. The dual mining shakeout from the recent drop plus the halving has accelerated a reinvestment cycle among the lowest cost miners who have been the last ones to make the switch into the most modern generation of mining gear.”

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Author: James W