Crypto market update & Performance attribution Hashdex Crypto Index ETPs

With multiple macroeconomic factors converging, the current entry point in the asset class appears appealing. As highlighted in our latest CIO note, ”Are We Entering a Bull Market?”, we may be approaching a pivotal moment for crypto assets:

• US Election Impact: The 2024 US election could accelerate regulatory clarity, potentially driving increased institutional participation.

• Fed Rate Cuts: Anticipated Federal Reserve rate cuts in late 2024 may boost liquidity, making risk assets like cryptos more attractive as traditional investments lose appeal.

• Bitcoin’s Market Cycle: Bitcoin is transitioning from a recovery phase, with signs pointing toward a potential bull market fueled by institutional inflows and growing ETF adoption.

These factors suggest now could be a compelling entry point for investors looking to capitalize on the next phase of crypto market growth.

Hashdex Crypto Index ETPs: performances (USD) as of end of September 24

• Beta Index ETP – Nasdaq Crypto Index ETP (HASH or HDX1) (largest Crypto Index ETP in Europe): September +9.8%, YTD +35%, 12m +115%.

• Smart-Beta Index ETP – Crypto Momentum Index ETP (HAMO or HDXM): September 5.2%, YTD 3%, 12m +98%.

Market Update – September 24

After a tough August, September saw crypto markets rebound. The month started with some volatility following a weak US jobs report, leading to uncertainty over the Fed’s next move. Stocks fell, with the S&P 500 down 4.2% and Nasdaq 100 dropping 5.9%. The Nasdaq Crypto Index (NCI) mirrored this with a 9.3% decline.

Mid-month, sentiment shifted with a 50bps Fed rate cut on September 18, boosting both traditional and crypto markets. The NCI recovered, finishing the month up by more than 9%. Meanwhile, the S&P 500 gained 2.1%, and Nasdaq 100 rose 2.6%. Altcoins outperformed, leading the recovery.

Despite renewed turbulence from Japan late in the month, crypto assets remained resilient. Bitcoin posted a 7.9% gain, while altcoins in the NCI outshined, marking September as Bitcoin’s strongest since 2012. With upcoming US elections and more monetary easing expected, the outlook remains positive for the crypto market.

Nasdaq Crypto Index (NCI) relative to other asset class in September 24

Source: Hashdex, as of 30/09/24.

Performance attribution

Nasdaq Crypto Index (NCI)

The Nasdaq Crypto Index recorded positive returns for most of its constituents, with Bitcoin (+7.9%) and Ethereum (+5.6%) contributing positively to the overall performance. Altcoins such as Uniswap (UNI) and Avalanche (AVAX) were the top performers, with 26.0% and 23.4% gains, respectively. Polygon’s MATIC was the only constituent with a negative return, as the network transitions to its new token structure.

Source: Hashdex, as of 30/09/24.

Crypto Momentum Factor Index

The Crypto Momentum Factor Index gained 5%, driven by strong performances from several altcoins. Although Tron (TRX) posted a slight decline of 0.6%, other assets within the index more than offset this, contributing to the positive monthly performance.

Source: Hashdex, as of 30/09/24.

Correlation (3m) to traditional asset classes

Source: Hashdex, as of 30/09/24. NCI for Nasdaq Crypto Index.

Hashdex Nasdaq Crypto Index Europe ETP

ISIN: CH1184151731 / Tickers: HASH (SIX and Euronext) or HDX1 (Xetra) – tradable in USD, EUR, CHF and GBP

Hashdex Crypto Momentum Factor ETP

ISIN: CH1218734544 / Tickers: HAMO (SIX and Euronext) or HDXM (Xetra) – tradable in USD, EUR, CHF and GBP