Coinbase listing and Vontobel's new ether tracker

Coinbase listing and Vontobel's new ether tracker

04 May 2021 from Mikael Syding

Once again, investors have learned that a month in the cryptocurrency world is like a year in the stock market. In just one month, American car companies have time to become both bitcoin maximalists and Doge-coin advocates, while crypto prices generally go to the moon and then crash again. In the meantime, the cryptocurrency exchange Coinbase has also been listed and is valued today (April 29, 2021) at $ 60 billion. Given the quarterly profit of one billion dollars, ie 4 billion in annual rate, it seems actually quite cheap (15x the profit) provided it holds up. Furthermore, Ether has made another of its appreciation moves relative to Bitcoin, and in just a few months raised the ratio from 0.03 to 0.05, ie + 67% relative to Btc. Some in the industry are even talking about a flipping, ie that Ether could take over Bitcoin's role as the largest cryptocurrency. With a market value of $ 320 billion placed next to Bitcoin's $ 1,000 billion, it's still a long way off, but not impossible. Such an event would mean one of the biggest financial bangs ever. Not to forget, as has been seen before for both Ether and Btc there can also be longer periods of rapid downturns.

In light of this, it is worth remembering that Vontobel's current Ether tracker will be delisted and redeemed at the end of May 2021. Those who did not sell their certificates before then will have their final value paid out on June 11, so it will of course work even if you miss the delisting deadline.

The new certificate that is already being traded contains some new contract terms and fees. For you as an investor, this means, among other things, that the fee is now 3.75% p.a. and variable (meaning Vontobel can increase it in accordance with the product terms). This better than before reflects the actual capital (regulatory) requirements of Vontobel group with respect to Ether. You as a buyer of the certificate also continue to avoid the risk of e.g. incorrect handling, problems at the depository, technical problems or hacker attacks. As always, as an investor in the certificate you bear Vontobel’s credit risk (the risk that the issuer of the certificate is not able to fulfill its obligations under the certificate).

The temperature in the crypto sector has risen significantly recently, partly due to the car company Tesla being able to report a profit for the first quarter of 2021 only thanks to a profit on short-term trading in Bitcoin, while CEO Elon Musk spoke warmly for the joke cryptocurrency Dogecoin. In Sweden, both Safello and Goobit / BT.CX have prepared IPOs this spring, and may do so in May, for example. Others, such as Qickbit and Arcane, are already listed. So awareness of the crypto world's various investment opportunities is spreading. It is fast becoming easier to trade with or invest in various cryptocurrencies, and also increasingly room clean. Both individuals and companies are looking for ways to protect themselves against the central banks' extreme monetary policy and the resulting inflation threat. The more they get used to the cryptocurrencies, the more likely they also become to allocate more and more of their capital there in different ways. Most people start the journey with Bitcoin, but then soon open their eyes to alternatives, usually first Ethereum. What both crypto currencies have for sure in common is extreme volatility.

So if you want to stay invested it could be a good opportunity to roll your ether certificates now that the activity in the sector is high. Also if you are ready to take the risk in crypto related stocks you can take a look at Coinbase, which was listed on April 14 this year. It now trades at $ 295, which is below its opening value and means a valuation of about $ 1,000 per verified user of their trading platform, or 0.25x the total amount of assets on the platform.



@Mikael Syding

Important legal information

Legal notice

This information is in the sole responsibility of the guest author and does not necessarily represent the opinion of Bank Vontobel Europe AG or any other company of the Vontobel Group. The further development of the index or a company as well as its share price depends on a large number of company-, group- and sector-specific as well as economic factors. When forming his investment decision, each investor must take into account the risk of price losses. Please note that investing in these products will not generate ongoing income.

The products are not capitalprotected, in the worst case a total loss of the invested capital is possible. In the event of insolvency of the issuer and the guarantor, the investor bears the risk of a total loss of his investment. In any case, investors should note that past performance and / or analysts' opinions are no adequate indicator of future performance. The performance of the underlyings depends on a variety of economic, entrepreneurial and political factors that should be taken into account in the formation of a market expectation.

30/11/2022 22:13:16


Write a Comment






* Required fields need to be filled in