(ASX: CRYP) | BETASHARES CRYPTO INNOVATORS ETF

Jun 1, 2022

Sentiment: Bearish

Type of Trade: High Growth, Speculative

Industry: Crypto Assets

Sector: Information Technology

At BG Trading we are consistently looking for value in assets that can offer 20-40% returns in the short term so we can apply BGS 20 Strategy. Nevertheless we also look for long term in other assets. Most of our long term investment is allocated into real estate and lithium at moment. As the year goes by and we see money moving from one sector to another, we have seen great value emerging from Crypto and Technology sector that could give us much higher returns than BGS 20 gains in the medium term. (Short term consists in converting the investment back in cash within 3-12 months generally speaking, while medium term as 12 months to 2 years, long term is anything over 2 years).

The way to get exposure to tech and crypto at the same time will be via the fairly new fund (ASX: CRYP).

Before investing in (ASX: CRYP) take a look at the video below.

Key Facts that could give Crypto fundamental value:

✅ First and foremost, El Salvador’s move to add bitcoin as legal tender alongside the U.S. dollar. It was announced at the Bitcoin 2021 conference in Miami and instantly drew applause from bitcoiners as well as criticism from traditional gatekeepers like the International Monetary Fund (IMF) and World Bank

U.S. is the largest mining country in the world; a title it likely won’t give up for decades to come. The second most influential event of 2021 was the China Bitcoin ban. After years of flip-flopping with partial bans, the Chinese Communist Party (CCP) finally did it and banned bitcoin services and businesses in May. This led to an exodus of bitcoin miners from China, mainly to other countries in Central Asia and the U.S. As result, we saw an significant rise of the bitcoin mining industry in the U.S.

 ✅ Fed break with the European Central Bank (ECB) and other central banks by not demonizing stablecoins (Stablecoins are altcoins that attempt to guarantee price stability within the crypto market. A stablecoin aims to keep its value constant, regardless of market fluctuations. The DAI stablecoin, for example, is pegged to the U.S. dollar at $1. As a result, 1 DAI is always worth $1) and stiff-arming central bank digital currencies (CBDCs).

 ✅ Further adoption of BITCOIN by other countries other than El Salvador. The coming years we may see at least one more country adopting bitcoin using the blueprint of El Salvador. We speculate on which countries this could be. Countries such as Ecuador, Panama as both of these countries use the USD similarly to El Salvador.

 ✅ Further NFT adoption in various platform such as Etherium, Cardano, Polygon, Hive, EOS to name a few. People will be able to play games, listen music, collect token and much more. Which blockchain will have the most market adoption, we don’t know yet.

 ✅ Crypto is currently the fastest growth sector in the World and is set to continue in years to come.

 ✅ Crypto sell off.

Why don’t’ we just buy BITCOIN then?

Although majority of the crypto market moves along with bitcoin, these assets themselves don’t generate any type of revenue or income. Hence in order to mitigate the risk, having full exposure to these assets via some of the most profitable companies in the crypto space we believe one of the best way to do it is by spreading across multiple assets in the same class. In shares, we would buy different stocks in the same sector.

“The (ASX: CRYP) enables investors to access the growth potential of the crypto economy, by providing investment exposure to a portfolio of companies at the forefront of the crypto world, including crypto trading venues, crypto mining and mining equipment firms, and other companies servicing crypto-markets. (ASX: CRYP) provides ‘picks and shovels’ exposure to the companies building crypto mining equipment, crypto trading venues, and other key services that allow the crypto economy to thrive.

🚩 These companies listed within this ETF are in the technology space, the recent sell off has been putting the whole ETF fund under pressure, nevertheless we can see significant value over the medium term as we normally look forwards. There is no history of this fund since the recent inception November 2021, but if we analyse stock by stock (the top 10 largest holdings), we will see tha all of these stocks are trading at technically discounted price as result of tech sell off, hence offering significant growth value from the tech space, combined to crypto exposure. not to mention the distribution compound.

Technical Analysis (ASX: CRYP)

There is not enough data to analyse the fund itself, nevertheless we can see the details of each of the top 10 stocks.

(ASX: CRYP) | Negative growth since the inception

The following companies operates are leading companies that have exposure to blockchain and crypto assets (included on top 10).

COINBASE = -81%

SILVERGATE CAPITAL = -24%

GALAXY DIGITAL HOLDINGS LTD = -82%

MICROSTRATEGY = -82%

CANAAN: -92%

When to sell?

  • The asset need to be sold once 50-60% return is achieved.
  • Lead time: 6-12 months
  • Risk: High
  • Strategy: Speculative – value driven strategy
  • Stop loss: stop loss at – 25-30%

Note for investors: Crypto is a highly volatile asset, most of the companies are directly exposed to assets. We urge investors to do not trade this type of asset with money that need to be liquidated in the short term. The time frame for a successful trade in this type of asset is at least 12 months.

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The information provided by BG Trading to you does not constitute personal financial product advice. The information provided is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. BG trading recommends that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Past performance of any product discussed is not indicative of future performance. (We urge that caution should be exercised in assessing past performance. All financial products are subject to market forces and unpredictable events that may adversely affect their future performance).