Monthly Letters
Dear Investor,
The implementation of President Trump’s tariffs on April 2 led to a massive initial sell-off, before markets followed a volatile path and received these losses later in the month.
The Nasdaq Crypto IndexTM (NCITM) closed up 11.70%, outperforming traditional indices like the S&P 500 (-0.76%) and Nasdaq-100 (1.52%), highlighting crypto's emerging ability to decouple from traditional markets.
The outperformance of the NCITM relative to traditional assets is a sign that investors might be more fully appreciating the “digital gold” narrative for bitcoin and the tailwinds setting many other crypto assets up for strong performance. In his latest Notes from the CIO, Samir Kerbage writes about the impact that bitcoin and stablecoins are having on the broader case for crypto.
As always, we are greatly appreciative of your trust in us and are here to answer any questions you may have.
-Your Partners at Hashdex
Market Review
April marked a remarkable recovery in financial markets despite the Trump administration's "Liberation Day" tariffs. The sweeping trade measures initially triggered a $9 trillion sell-off in global equities, yet markets demonstrated surprising resilience. The Nasdaq Crypto IndexTM (NCITM) closed up 11.70%, outperforming traditional indices like the S&P 500 (-0.76%) and Nasdaq-100 (1.52%), highlighting crypto's emerging ability to decouple from traditional markets.
While March saw crypto assets moving in lockstep with tech stocks, April witnessed a notable divergence. Investors appeared to view digital assets as a potential hedge against the dollar's 3% decline and rising geopolitical tensions. Sovereign credit default swap spreads widened, indicating growing concerns about US government creditworthiness amid escalating trade conflicts.
Bitcoin led major crypto assets with a 14.12% gain, reinforcing its "digital gold" narrative – a claim strengthened by physical gold's simultaneous 5.3% rise. Solana delivered even more impressive returns at 18.40%, capitalizing on growing developer activity and institutional interest. Not all crypto assets benefited equally, with Ethereum posting a modest decline of -1.63%, likely due to concerns about tariff impacts on technology supply chains.
Thematic indices reversed their March performance, all posting positive returns. The Smart Contract Platform (Web3) index led with 8.40%, followed by the Digital Culture (META) index at 7.25%. The Vinter Hashdex Risk Parity Momentum (HAMO) index delivered 6.75%, while the Decentralized Finance (DeFi) index lagged but remained positive at 2.49%.
The Power of Market Cap-Weighted Indices in Volatile Times
April's market dynamics showcase the advantages of market capitalization-weighted indices like the NCITM. While the NCITM delivered 11.70%, individual performance varied dramatically from Solana's 18.40% surge to Ethereum's 1.63% decline. This dispersion underscores the benefit of built-in diversification that helps mitigate crypto's extreme volatility.
Market cap-weighted indices naturally assign greater weight to larger, more established cryptoassets, providing more stable returns while capturing upside from top performers. This methodology effectively balances risk and reward, reflecting the market's collective assessment of each asset's value.
The 30-day rolling window normalized percentage change of NCITM compared to an equally weighted basket of BTC, ETH, XRP, and SOL. A capture ratio > 1 means NCIS outperformed the basket during that 30-day period, while < 1 means it underperformed. The NCI’s rolling capture ratio consistently delivered higher returns than the equal-weighted basket throughout the year, peaking in April 2025.
April's market movements reflected investors repricing assets to account for increased trade barriers, political turmoil, and shifting monetary policy. In this environment, the disciplined approach of market cap-weighted indices provided a steadier path through volatility than attempting to select individual winners.
Looking ahead, markets continue processing the implications of the global tariff regime and potential retaliatory measures. The ECB's 25-basis-point rate cut on April 17 signals concern about growth amid rising trade tensions, while the Federal Reserve has slowed balance sheet reduction in response to economic uncertainty. These policy shifts may create a more accommodative environment for risk assets.
April’s strong finish for crypto assets suggests that clarity on the policy front – from trade to crypto regulation – can unlock significant value in this asset class. As we move forward, we note that bitcoin remains the blue-chip core of the crypto market, but exposure to the broader ecosystem via indices like the NCITM is proving its worth as the entire crypto frontier advances. The advantages of market cap-weighted exposure to this evolving asset class have never been clearer.
Top Stories
Goldman Sachs pursues 24/7 tokenized trading in US
The firm is advancing plans to enable a 24/7 trading of tokenized US Treasuries and money market fund shares. This follows recent regulatory shifts, including national banks being allowed to engage in crypto activities without prior approval and the withdrawal of previous guidance that discouraged crypto activities, signaling a more accommodating public policy environment.
Federal Reserve withdraws crypto guidance
The Federal Reserve has withdrawn previous guidance that discouraged banks from engaging in crypto activities such as custody and trading.This move, part of a broader regulatory shift under the Trump administration, is poised to foster innovation in the crypto space by reassessing regulatory frameworks and easing restrictions.
BlackRock CEO—bitcoin could challenge USD
In BlackRock’s annual letter to investors, CEO Larry Fink suggested that bitcoin could challenge the US dollar’s reserve status. This highlights growing concerns over US debt and bitcoin’s appeal as a store-of-value asset in the so-called “debasement trade.”
_________________________