The NCI closed Sunday 5.4% above last week’s closing. The index’s performance was heavily influenced by ether (ETH), up 6.6%, while bitcoin (BTC) rose 4.4%. Bitcoin closed July up over 22%, while ETH rose nearly 60% in the same period. 

The crypto market started the week on shaky ground, as bitcoin began to surrender part of the previous week's 14% gains. Bitcoin fell more than $1,000 on Monday while ETH’s price sank by over $100 — its most intense daily price drop in July. Outside of investors taking profits, uncertainty surrounding the impact of the Fed's rate hike (Wednesday) and the U.S. GDP figures (Thursday) seemed to loom heavy over the market. Investors seemed divided about the effect of the coming rate hike, despite a strong consensus pointing to a 75 bp increase to the Fed funds rate. The only exception was ETH, which started rallying on Tuesday night. 

Ethereum’s native token nearly erased all its early week losses before the Fed announcement, perhaps reflecting the news of another successful shadow fork coming online earlier than expected that sustained optimism for “The Merge” ahead of the Goerli testnet merge.  

However, early Wednesday crypto price charts began to reflect cautious optimism ahead of the FOMC’s announcement. Prices continued to creep up throughout the morning until Fed Chair Jerome Powell confirmed the 75 bp rate hike early in the afternoon.

Markets began to rally across the board as investors seemed encouraged by Powell’s remarks.  While the Fed Chair did not rule out another 75 bp rate hike, he admitted it would eventually be appropriate to take a wait-and-see approach, as Fed officials assess how previous hikes impacted the economy.

Bitcoin’s price shot up 10%, while other crypto assets showed similarly outsized gains before stabilizing on late Wednesday night.

On Thursday morning, investor focus shifted to the US Bureau of Economic Analysis (BEA) GDP figures, due to be released before US markets opened. Despite an initial dip following the announcement that the US economy shrank at 0.9% annualized rate in Q2, the crypto market quickly began to rally towards another $1,000 bitcoin price increase. 

While pundits discussed the semantics of the term “recession” after two consecutive quarters of contracting activity in the world’s largest economy, investors seemed to adhere to the “bad news is good news” narrative. The weaker-than-expected GDP figures reaffirmed bets that the worst of the interest rate tightening cycle was already in the rearview mirror.

On Friday, prices remained mostly stable despite a brief dip as markets opened in North America. During the weekend, crypto markets would remain mostly stable—outside of a bitcoin rally on Saturday morning—eventually losing steam on Sunday into the week’s closing hours.

Outside the top ten largest market caps, Ethereum Classic (ETC) registered another week of outsized gains. The Ethereum offshoot’s native token registered a 186% price increase in July, likely reflecting investors’ predictions for current Ethereum miners to migrate to Ethereum Classic—whose consensus will still rely on Proof-of-Work—after The Merge establishes Proof-of-Stake as the new consensus mechanism for the Ethereum blockchain. 

 

_____________________________________

_{This material expresses Hashdex Asset Management Ltd. and its subsidiaries and affiliates (“Hashdex”)'s opinion for informational purposes only and does not consider the investment objectives, financial situation or individual needs of one or a particular group of investors. We recommend consulting specialized professionals for investment decisions. Investors are advised to carefully read the prospectus or regulations before investing their funds. The information and conclusions contained in this material may be changed at any time, without prior notice. Nothing contained herein constitutes an offer, solicitation or recommendation regarding any investment management product or service. This information is not directed at or intended for distribution to or use by any person or entity located in any jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation or which would subject Hashdex to any registration or licensing requirements within such jurisdiction. No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of Hashdex. By receiving or reviewing this material, you agree that this material is confidential intellectual property of Hashdex and that you will not directly or indirectly copy, modify, recast, publish or redistribute this material and the information therein, in whole or in part, or otherwise make any commercial use of this material without Hashdex’s prior written consent.} 

_{Investment in any investment vehicle and cryptoassets is highly speculative and is not intended as a complete investment program. It is designed only for sophisticated persons who can bear the economic risk of the loss of their entire investment and who have limited need for liquidity in their investment. There can be no assurance that the investment vehicles will achieve its investment objective or return any capital. No guarantee or representation is made that Hashdex’s investment strategy, including, without limitation, its business and investment objectives, diversification strategies or risk monitoring goals, will be successful, and investment results may vary substantially over time. Nothing herein is intended to imply that the Hashdex s investment methodology or that investing any of the protocols or tokens listed in the Information may be considered “conservative,” “safe,” “risk free,” or “risk averse.”}

_{Certain information contained herein (including financial information) has been obtained from published and non-published sources. Such information has not been independently verified by Hashdex, and Hashdex does not assume responsibility for the accuracy of such information. Hashdex does not provide tax, accounting or legal advice. Certain information contained herein constitutes forward-looking statements, which can be identified by the use of terms such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue”  “believe” (or the negatives thereof) or other variations thereof. Due to various risks and uncertainties, including those discussed above, actual events or results, the ultimate business or activities of Hashdex and its investment vehicles or the actual performance of Hashdex, its investment vehicles, or digital tokens may differ materially from those reflected or contemplated in such forward-looking statements. As a result, investors should not rely on such forward- looking statements in making their investment decisions. None of the information contained herein has been filed with the U.S. Securities and Exchange Commission or any other governmental or self-regulatory authority. No governmental authority has opined on the merits of Hashdex’s investment vehicles or the adequacy of the information contained herein.}

_{Nasdaq®, Nasdaq Crypto Index™, NCI™, Nasdaq Crypto Index Europe™ and NCIE™ are registered trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for use by Hashdex Asset Management Ltd. The Hashdex Nasdaq Crypto Index ETF and Hashdex Nasdaq Crypto Index Europe ETP (the “Products”) have not been passed on by the Corporations as to their legality or suitability. The Products are not issued, endorsed, sold, or promoted by the Corporations.THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCTS.}