Monthly Letters
Dear Investor,
Fears driven by news of repayments from the infamous Mt. Gox exchange helped push prices downward in June, even as other risk assets performed well. The Nasdaq Crypto IndexTM dropped 9.31% during the month but returned 44.3% through the first half of the year.
Despite last month’s negative price performance, there remain several short-term catalysts we think will drive prices higher this year and beyond. In his most recent Notes from the CIO, Samir Kerbage writes about how lessons from the past are signaling that this coming month could be an ideal time to allocate to crypto.
Our view that we may be at an inflection point for crypto investing, as ETF demand and institutional interest continue to accelerate, is one of the reasons we announced in June we are waiving fees for the Hashdex Nasdaq Crypto Index Europe ETP (HASH). The ETP is the second largest crypto index ETP in Europe. You can read more about the announcement here.
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
June was quite positive for traditional risk assets. Driven mainly by the performance of technology sector companies, the S&P 500 and Nasdaq 100 indices appreciated by 3.6% and 6.3%, respectively. Crypto assets, however, decoupled and posted negative returns.
After an uptick in the first days of the month, the Nasdaq Crypto IndexTM (NCITM) entered a gradual downtrend and on the 24th, fears related to payments from the Mt. Gox exchange process pushed the index further down. The last days of the month saw a slight recovery, with the index closing the month with a decline of 9.3%. Negative performance was widespread among the NCI'sTM constituent assets, with performance ranging from -8.6% (Bitcoin) to -23.3% (Chainlink).
Among other indices that serve as benchmarks for Hashdex products, the smallest drop was in the Vinter Hashdex Risk Parity Momentum Index (-10.2%). The highlight was Tron, which rose 11.9%, supported by good stablecoin movement on its network. Among CF Benchmarks' sector indices, Decentralized Finance (DeFi), Smart Contract Platforms (WEB3), and Digital Culture (META) recorded declines of 14.6%, 17.1%, and 27.4%, respectively.
The June pullback did not overshadow the brilliance of the first semester for the NCITM, which recorded an appreciation of 44.3%, largely driven by the approval of spot Bitcoin ETFs in the US and regulatory signals pointing in the same direction for Ethereum. Analysts believe that a potential victory for Donald Trump in the November elections could make US government agencies more favorable to crypto, enabling further advancements.
In the past 12 months, the NCITM has seen eight positive returns and only four negative ones, accumulating a gain of over 92%. Stumbles like June do not affect our confidence for the second semester and the years ahead.
Top Stories
Bernstein predicts BTC ETFs near approval at major wirehouses; maintains $200k target
Analysts at the firm expect institutional adoption of Bitcoin ETFs to rise by late 2024, leading to greater demand and potential price increases. They note current institutional participation is small and focused on arbitrage, but should expand to “net long” positions with better liquidity. Bernstein predicts BTC could hit $200,000 in 2025 and $1 million by 2033.
Biden officials to attend Bitcoin roundtable
US Congressman Ro Khanna, a California Democrat, is hosting a Bitcoin roundtable with key congressional officials in DC that will be attended by officials from President Biden’s administration. Khanna's office described the event as "the most significant meeting between policymakers and innovation leaders in blockchain to date." This news follows Republican candidate Donald Trump's public advocacy for BTC and crypto-friendly policies. with Trump stating last month that he wants “all remaining bitcoin to be ‘made’ in the USA.”
Kraken raising over $100M pre-IPO funding
Crypto exchange Kraken aims to secure over $100 million in funding as it prepares for a public listing in the US. Speculation about Kraken's IPO plans has been ongoing for years, but the company has recently faced SEC allegations it’s operating an unregistered brokerage. The funding round is expected to conclude by year's end, which boosts the overall positive sentiment for the crypto assets landscape in 2024.
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