Crypto Update: The ebb and flow of institutionalisation

Crypto Update: The ebb and flow of institutionalisation

Cryptocurrencies 5 minutes to read
Jacob Pouncey

Cryptocurrency analyst, Saxo Bank Group

Summary:  Cryptocurrency prices are in free-fall with miners and hedge funds starting to exit the space.


This week the entire crypto market cap fell by 27% to around $150 billion. Additionally, Ethereum fell 32% after breaking the $200 support level, and Bitcoin fell in line with the market with a decline of 28%. Over the past week Bitcoin experienced its largest difficulty drop in history. This means that miners who secure the network are leaving the network, which is mainly driven by the decrease in profitability of mining bitcoins. This difficulty is often viewed as an indicator of the health of the network.

New crypto tracker delayed

This week the SIX Swiss Exchange is set to launch the first ever exchange traded product (ETP) that tracks a basket of cryptocurrencies. The Amun Crypto ETP would track the top five most liquid cryptocurrencies weighted by market cap. The basket is comprised of 50% Bitcoin with the rest being divided among XRP, Ethereum, Bitcoin Cash and Litecoin, respectively. In fact, trading was supposed to start November 22, but sources say that one of the clearing parties backed out at the last minute. Trading of the product should begin before the end of the week.

Bakkt confirms launch date

In a blog post Bakkt, the much-anticipated cryptocurrency futures exchange, announced that it will push back its original launch date of December 12. The new launch date is set for January 24. The cryptocurrency market is hoping that the launch of physically settled daily futures will lift demand for the liquid supply of bitcoins. This demand could potentially provide support to the falling cryptocurrency prices. The delay of the launch of the futures certainly did not help to support the price of Bitcoin.

Hedge funds may start to close shop

Morgan Creek Digital founder Anthony Pompliano stated that he believes many crypto-focused hedge funds will choose to shut down their funds. Many have a high-water mark from last year’s performance that they must surpass to receive performance fees. Pompliano states that many will decide to close their funds and return capital to investors. He also mentions that ICOs, which are recently under-pressure from regulators, will be required to refund investors. The unwinding of cryptocurrency positions from ICOs and hedge funds to pay back investors could provide selling pressure to the market over the coming months.

Quarterly Outlook

01 /

  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Macro Strategy

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

None of the information provided on this website constitutes an offer, solicitation, or endorsement to buy or sell any financial instrument, nor is it financial, investment, or trading advice. Saxo Capital Markets UK Ltd. (Saxo) and the Saxo Bank Group provides execution-only services, with all trades and investments based on self-directed decisions. Analysis, research, and educational content is for informational purposes only and should not be considered advice nor a recommendation. Access and use of this website is subject to: (i) the Terms of Use; (ii) the full Disclaimer; (iii) the Risk Warning; and (iv) any other notice or terms applying to Saxo’s news and research.

Saxo’s content may reflect the personal views of the author, which are subject to change without notice. Mentions of specific financial products are for illustrative purposes only and may serve to clarify financial literacy topics. Content classified as investment research is marketing material and does not meet legal requirements for independent research.

Before making any investment decisions, you should assess your own financial situation, needs, and objectives, and consider seeking independent professional advice. Saxo does not guarantee the accuracy or completeness of any information provided and assumes no liability for any errors, omissions, losses, or damages resulting from the use of this information.

Please refer to our full disclaimer for more details.

Saxo
40 Bank Street, 26th floor
E14 5DA
London
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo is a registered Trading Name of Saxo Capital Markets UK Ltd (‘Saxo’). Saxo is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992