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Renewable Energy: Trends and Future Outlook

Educational ressources

May 17, 2024

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Week of May 17 - 24, 2024

Three legislative wins for digital asset industry in the U.S. and one surprise win at the hands of an otherwise recalcitrant SEC helped drive digital assets and related players like Coinbase (COIN, +13.6% WTD, +35.6% YTD) higher.

The SEC’s unexpected approval of several spot ETH ETFs applications pushed ETH (+21% WTD, +64% YTD) to its largest 1-day gain since May 2021, closing the YTD gap on BTC’s +65% YTD gain.

Of the three legislative wins, FIT21 (see story below) and the repeal of the SEC’s SAB 121 that unduly punished a firm for acting as a digital asset custodian, are the most noteworthy for industry impact and degree of non-partisan support.

This week’s news flow did NOT translate to gains for equities, bonds (BBerg Agg, -0.3%), and most commodities (Gold, -3.3% / WTI, -3.3%) as investors digested the impact of higher for longer rate realities which were substantiated by several investment firms.

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Digital Assets vs TradFi Returns — *Source: 3iQ Research. Data sourced from Bloomberg LP as of May 24, 2024. You cannot invest directly into an index.*

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The lone bright spot in equities was the EPS beat by NVIDIA (NVDA, +15% WTD), which continues to benefit from the tsunami of spending by firms on Artificial Intelligence.

Below we include the 1-year graph of NVDA with those for BTC and ETH to demonstrate a potential reason for the shift in sentiment by U.S. lawmakers. The fact that over 50% of the YTD gains in the S&P 500 are coming from just four large cap tech stocks is NOT lost on the CEOs of banks, industrials and other companies which are all but locked out of such earnings and expansion.

Nvidia, BTC and ETH — *Source: 3iQ Research. Data sourced from Bloomberg LP as of May 24, 2024.*

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Bitcoin is more efficient than the current banking system’s equity securities settlement process that is only now switching to a T+1 settlement. But the approval of the spot BTC ETF was more a boon for asset managers than banks as retail and now institutions have adopted it for its apparent store of wealth properties and ‘moneyness’.

The BTC asset that rides on the globally distributed Bitcoin network is a digital alternative money and store of value, but won’t hold a digital USD, or settle a digital contract.

But the Ethereum network can.

Approving FIT21 allows banks and other industries to further engage the value proposition of the Ethereum network, leveraging the open architecture of the Ethereum Virtual Machine.

The 5-year annualized gain for banks (S5BANKX,+8.5%) barely kept pace with the growth in the money supply and is less than half of NASDAQ’s+17.4% price gain over the same period.

Can Ethereum adoption help the beleaguered banking system shift to the fintech platforms they aspire to be? We do not know, but FIT21 was likely a result of many in the banking industry lobbying for the chance to find out.

(NB: The banks may be a bit more motivated to secure new efficiencies as higher rates may cause bring defaults, a dynamic that has already caused the regional bank index to flatline in 2024.)

*Source: 3iQ Research. Data sourced from Bloomberg LP as of May 24, 2024. You cannot invest directly into an index.*

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Headline Performance 1-Week

BTC Market Cap (▲3.33%) to $1.36T USD

ETH Market Cap (▲21.21%) to $450B USD

Implied Stablecoin Market Cap (▲0.06%) to $141B USD*

Implied Altcoin Market Cap (▲1.24%) to $525B USD*

Total Crypto Market Cap (▲5.50%) to $2.48T USD*

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Bitcoin Performance 1-Week

BTC/USD (▲3.32%) to $69,148 USD

52-Week High ($73,157 USD) Low ($24,928 USD)

BTC/CAD (▲3.72%) to $94,491 CAD

52-Week High ($98,550 CAD) Low ($33,215 CAD)

Current Supply (▲0.01%) to 19,702,387 BTC*

Bitcoin Hash Rate (Mean) (▲20.37%) to 707 EH/s*

Daily Active Addresses (7D Avg) (▲6.35%) to 703,245*

Daily Transactions (7D Avg) (▲4.20%) to 586,632*

Mean Transaction Fee (7D Avg) (▼-13.34%) to 0.00004 BTC / $2.75 USD*

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Ethereum Performance 1-Week

ETH/USD (▲21.20%) to $3745 USD

52-Week High ($4033 USD) Low ($1536 USD)

ETH/CAD (▲21.67%) to $5,118 CAD

52-Week High ($5437 CAD) Low ($2092 CAD)

Current Supply (▲0.00%) to 120,134,246 ETH*

Daily Active Smart Contracts (7D Avg) (Layer 1) (▲0.20%) to 96,913*

Daily Active Addresses (7D Avg) (Layer 1) (▼-5.55%) to 566,984*

Daily Active Addresses (7D Avg) (Layer 2) (▲12.32%) to 2,106,878*

Daily Transactions (7D Avg) (Layer 1) (▼-2.48%) to 1,126,387*

Daily Transactions (7D Avg) (Layer 2) (▲7.89%) to 7,253,252*

Active Validator Count (▲0.21%) to 1,006,168*

7D Avg. Validator Staking Yields to 3.49% APY

Total ETH Staked (▼-0.41%) to 32,289,940 ETH*

Percentage of Current ETH Supply Staked to 26.9%

ETH Supply Burned (7D Total) (▲48.97%) to 6,812 ETH*

Mean Transaction Fee (7D Avg) (Layer 1) (▲47.81%) to 0.00119 ETH / $4.28 USD*

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TradFi Performance 1-Week

S&P 500 (▼-0.09%) to $5299 USD

NASDAQ Composite (▲1.41%) to $16,921 USD

STOXX Europe 600 (▼-0.45%) to 521 EUR

Hang Seng (▼-4.83%) to 18,609 HKD

Spot Gold Oz. (▼-3.34%) to $2335 USD

Source: 3iQ Research. Price and Market Capitalization data sourced from Bloomberg, CoinMetrics as of May 24, 2024. Market prices are based off 4:00 ET prices. You cannot invest directly into an index.

*Source: 3iQ Research. Fundamental digital asset data sourced from CoinMetrics, Etherscan, ETH.Store, GrowThePie, Coin.Dance as of May 23, 2024. Hash rate is represented in Exahashes (EH/s) per second. Some metrics are expressed as a rolling 7-day average. Some altcoin and stablecoin data has been omitted from analysis.

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Market Developments Past 1-Week

U.S. SEC Approves Exchange Applications to List Spot Ether ETFs (source)

Hong Kong Considers Allowing Ether ETF Staking in Contrast to US (source)

U.S. House Approves Crypto FIT21 Bill With Wave of Democratic Support (source)

U.S. Senate Votes to Kill SEC's Crypto Accounting Policy, Testing Biden's Veto Threat (source)

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Technology Developments Past 1-Week

The New Wave Of Bitcoin L2s Are Sidechains (source)

EtherFi Unveils Plans For Credit Card Tied To Restaking Holdings (source)

Major Crypto Exchanges Launch ‘Tech Against Scams’ Coalition to Combat Crypto Fraud (source)

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3iQ Mentions/Developments Past 1-Week

Decrypt: Ethereum ETF Applicants Ditch Staking Language in 'Temporary Concession' to SEC: Analyst. "In other regions, such as Canada, funds that hold staked Ethereum have shown that it can be done. Two of 3iQ’s exchange-traded products, for example, began offering customers the benefits of Ethereum staking in 2023." (source)

Blockchain North Video: 3iQ Founder message to government: keep it simple and you’re allowed to say yes! At the Canadian Crypto Asset & Blockchain Policy Conference, Fred Pye, Founder & Chairman of 3iQ, shared his insights on the Canadian blockchain industry, ETFs, mining, the importance of investing in blockchain, and provided an update on his company. (source)

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Schwab Network: Can Bitcoin Break the 100k Level Before the end of the Year? 3iQ’s Mark Connors details why that remains his low-end target for BTC, as he and S&P Global Ratings’ Andrew O’Neill discuss the outlook for crypto markets with Nicole Petallides. (source)

Disclosure

THESE MATERIALS AND THE INFORMATION CONTAINED HEREIN, IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

These materials do not constitute an offer to sell or issue or the solicitation of an offer to buy or subscribe for securities in the United States or any other jurisdiction. Neither the 3iQ Corp.’s (the “Manager”) nor the Fund’s securities have been nor will be registered under the United States Securities Act of 1933, as amended (the “Securities Act”), nor under the applicable securities laws of any state or other jurisdiction of the United States, and may not be offered, sold, resold, transferred or delivered, directly or indirectly within, into or in the United States, absent registration or an applicable exemption from, or except in a transaction not subject to, the registration requirements of the Securities Act and in compliance with the securities laws of any relevant state or other jurisdiction of the United States. No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. The commentaries contained herein are provided as a general source of information based on information available as of May 24, 2024. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change investment decisions arising from the use or relevance on the information contained here. Investors are expected to obtain professional investment advice to determine suitability of their investment objectives and portfolio. 3iQ Corp. makes no representation or warranty to any investor regarding the legality of any investment, the income or tax consequences, or the suitability of an investment for such investor. Prospective investors must not rely on this document as part of any assessment of any potential investment and should not treat the contents of this document as advice relating to legal, taxation, financial or investment matters. Prospective investors are strongly advised to make their own inquiries and consult their own professional advisers as to the legal, tax, accounting and related matters concerning the acquisition, holding or disposal of an investment. All content is original and has been researched and produced by 3iQ Corp. unless otherwise sourced or stated therein.

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Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated.

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There are ongoing fees and expenses associated with owning units of an investment fund. An investment fund must prepare disclosure documents that contain key information about the fund. You can find more detailed information about the fund in these documents. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all distributions and does not take into account certain fees such as redemption fees or optional charges or income taxes payable by any security holder that would have reduced returns. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated.

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Certain statements in this document are forward-looking statements, including those identified by the expressions “anticipate”, “believe”, “plan”, “estimate”, “expect”, “intend”, “target”, “seek”, “will” and similar expressions to the extent they relate to the Manager. Forward-looking statements are not historical facts but reflect the current expectations of the Manager regarding future results or events. Such forward-looking statements reflect the Manager’s current beliefs and are based on information currently available to them. Forward-looking statements are made with assumptions and involve significant risks and uncertainties. Although the forward-looking statements contained in this document are based upon assumptions the Manager believe to be reasonable, none of the Manager can assure investors that actual results will be consistent with these forward-looking statements. As a result, readers are cautioned not to place undue reliance on these statements as a number of factors could cause actual results or events to differ materially from current expectations. The forward-looking statements containedherein were prepared for the purpose of providing general educational background information about cryptoassets and may not be appropriate for other purposes. The Manager does not assume any obligation to update or revise them to reflect new events or circumstances, except as required by law. Nothing in this email should be considered investment Advice. Digital Asset trading markets are volatile and can change rapidly. All opinions and analysis are of the writer and not of 3iQ.

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