Dear Investor,

One of the possibilities we identified in our 2023 Crypto Investment Outlook was that crypto assets may recover faster than other risk assets as macro conditions improve. January proved to support this thesis, with the Nasdaq Crypto Index rising 37.7% and significantly outperforming the S&P 500 and Nasdaq 100 indices. 

Crypto assets are certainly not out of the woods yet, as fallout from the failure of several centralized players is not entirely clear at this point. However, we cannot ignore that the signs of a recovery are all around. 

On Wednesday, our Chief Product and Technology Officer Samir Kerbage will be joined by FalconX Head of Research David Lawant to discuss whether we have seen the bottom for crypto, and what the rest of 2023 will bring for bitcoin and other crypto assets. You can register for the call here. 

In the meantime, the Hashdex team is here to answer any questions you have about these markets. 

-Your Partners at Hashdex 

Market Review

Last year was a tough one for risk assets, including crypto assets. However, January 2023 was a shift in course as the macroeconomic environment boosted prices for riskier assets. The S&P 500 and Nasdaq 100 rose by 6.3% and 10.7%, respectively.

As we predicted in the Hashdex 2023 Crypto Investment Outlook, crypto assets reacted faster to signs of macro improvement compared to traditional assets. The Nasdaq Crypto Index rose 37.7%, making it the third-best month since its December 2020 inception. Bitcoin returned almost 40%, but the two constituents with the highest gains were Axie Infinity and The Sandbox, with gains of 81.3% and 90.2%, respectively.

The Risk Parity Momentum Index, co-developed by Vinter and Hashdex, outperformed the NCI, with a return of 44.2%. Sector indices from CF Benchmarks had even higher returns than the Nasdaq Crypto Index: DeFi Index rose by 41.2%, including a 91.2% return for Curve. Solana, which had a strong drop due to FTX-related issues, rose over 140% and was the best asset in the Smart Contracts Platforms Index (66.1%). The Digital Culture Index had an appreciation of 65.8%, led by Gala (230.7%) and Decentraland (151.5%).

It's still too early to say that the crypto winter is gone, but January was a breath of optimism for the crypto markets. It is clear that the macro environment will continue to play a relevant role in risk asset prices, so we can’t discard the possibility of new downturns from negative surprises. Nevertheless, all indications point towards a promising year ahead. More of our perspectives on what this year will bring for crypto assets can be found in our Crypto Investment Outlook and at the Hashdex Research Center. 

NCI YtD 37.7% January 37.7%

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