Market House View (status 07 September 2021)

The House View is produced by the independent research unit. It is produced annually and reviewed on a quarterly or ad hoc basis. The House View is taken into account by the Investment Committee and Investment Unit when deliberating actions.

We express a view only for those cryptocurrencies that we trade. Each product is defined above in terms of the tradable cryptocurrencies.

Big picture:

  • Our view is that digitalization is an unstoppable technological (r)evolution which will affect all sectors of the economy and the society. Blockchain is a major and most disruptive expression of it. Bitcoin is the epitome of blockchain and best representation of the new asset class that is supported by blockchain technology and ultimately by the ineluctable digitalization process.
  • Our view is that cryptofinance and cryptoassets are major expressions of the digital (r)evolution. They have gained in popularity exponentially since 2017, supported by continuously enhanced products, process, regulations and performance. Bitcoin progressed from a value of some cents in 2010 to over 30’000 USD at the end of 2020. In 2013, 7 cryptoassets existed for a market cap of USD 1.5bn; at the end of 2020, 8’169 cryptoassets existed for a market cap of USD 653bn.

Cryptocurrencies:

  • BTC – Our view is that bitcoin price will reach a region of USD 200’000 – 300’000 until 1Q2022. The rise throughout the year will not be linear, but characterized by volatility driven by specific news, including governmental and regulatory, and by macroeconomic events. The popularity of bitcoin as a valid new asset class will continue as investors appreciate its Ledger Immunity, simplicity, immutable fix supply, the regular halvings, and steady adoption, against inflationary fiat currencies.
  • Alt-coins – Alternative Coins or Alt-coins mean in this context the tradable coins other than bitcoin. Our view is that alt-coins will continue to increase in value during 2021 and their correlation to bitcoin accentuate. Alt-coins are however also materially affected by specific protocol development news. We expect the Alt-coins to first decrease in value relative to bitcoin, as bitcoin increases towards the expected all time high; we expect then Alt-coins to increase in value relative to bitcoin after the latter will have scored a new all time high. We distinguish between different alt-coins. Protocol Layer Blokchains has been a focus and we had closely monitor the Blockchains in terms of Value Transaction, Security of ledger and Scalability. We expect new layer 2 Dapps such as the interoperability, DeFi, NFTs to be a hot topic among blockchains while at the infrastructure level , protocols try to compete for scalable solutions.
  • ETH – With the Launch of Phase 0 of ETH 2.0, Ethereum is now on a race to be the de facto Smart contract platform in the decentralized Space. Many layer 2 projects are now being developed and implemented on top of Ethereum and soon newer use cases on top of Defi and NFTs will emerge
  • Other Alt-coins – Our view is that other alt-coins will rise significantly from their lowest value during 2021, however with important differentiations between the coins. The bigger altcoins (market cap) will display a comparatively less volatile growth.

Specifically:

  • LTC – With its Proof-of-Work consensus and Dual mining with Doge coin ability, and long history of existence, Litecoin was able to keep an active ecosystem of users. It faces however increasing competition from other emerging coins. We believe Litecoin value will be highly correlated to price of bitcoin in the foreseeable future.
  • ADA – Our view is that Cardano is a project with solid fundamental value and growth potential. Long waited Alonso hard fork will be a major milestone for the protocol, which will enable users to create and deploy “smart contracts” on the Cardano blockchain. Cardano manages its community very well.
  • XLM – Our view is that Stellar faces good development potential, in particular as a platform hosting CBDCs. We believe Stellar will be a main competitor to Ripple. It has a solid network and cost effective solutions. It could become a protocol of choice for Governments and enterprises to issue their assets and transacting them.
  • TRX – Our view is that Tron is to be monitored on its path to develop all the Ethereum network features and facilities and to launch DeFi and NFT standard protocol TRC-721 with lower gas fees. Tron foundation has now become a solid underlying protocol for well-known assets such as tether. The main weak point about this project is the centralization of protocol governance.
  • XTZ – Our view is that Tezos has good potential in connection with the release protocol updates that could attract developers, reduce gas fees and enable novel applications on its blockchain. Tezos has one of the highest Supply locked for Staking and a solid team.
  • BNB – Our view is that Binance coin is to be monitored and invested opportunistically, considering potential regulatory / reputational risks. It has one of the fastest pace growing ecosystem, and Binance Smart Chain and its Native Asset BNB have shown a significant growth in terms of development, ecosystem and innovation. Binance will stay among top 10 assets in next years.
  • NEO – Our view is that NEO harbors a good potential for appreciation and for becoming one of the top 10 smart contracts platform over the next 2 years. With NEO 3.0, many scalability, security and governance issues of this blockchain will be resolved.
  • EOS – Our view is that EOS currently misses fundamental news and therefore appreciation potential. While Competitors chain are trying to win the race of Defi and NFTs, EOS is aiming to be the no.1 choice for metaverse application and IoT chains. We believe EOS needs to reclaim its reputation by rolling out new features and Dapps.
  • XRP – Our view is that Ripple finds itself in an uncertain regulatory situation following the lawsuit launched by the SEC over alleged sale of unlicensed securities and will experience significant volatility until settlement. If Ripple manages to settle their case, we could see large price appreciation.
  • BCH – Our view is that bitcoin cash will experience limited rise in value, as no significant releases are expected. With forks after forks implemented on their chain, Bitcoin Cash is signaling an inability to compete with its predecessor’s chain, Bitcoin.
  • ETC : This early fork of Ethereum classic it has the potential to attract miners migrating to this chain after a successful implementation of ETH 2.0. While we believe that ETC will experience volatility during the next phase, we hold to the view that its potential appreciation is limited

Disclaimer:

The information contained in this document is provided for information purposes only. It does not constitute any offer, recommendation, solicitation, or advice to any person to enter into any transaction or adopt any investment, trading, or hedging strategy, nor does it constitute any prediction of likely future movement in prices or any representation that any such future development will not occur or not. Users of this document should seek advice regarding the appropriateness of investing in any cryptocurrency, cryptoasset, financial instrument, or investment strategy referred to on this document and should understand that statements regarding future prospects may not be realized. Projections, estimates, and opinions are subject to change without notice.

Bitcoin Capital AG and/or FiCAS AG accept no liability and will not be liable for any loss or damage arising directly or indirectly (including special, incidental or consequential loss or damage) from the use of this document, howsoever arising, and including any loss, damage or expense arising from, but not limited to, any defect, error, imperfection, fault, mistake or inaccuracy contained in this document, its contents or associated services, or due to any unavailability of the document or any part thereof or due to any contents or associated services.

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