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Post-election rally cools at year end

Monthly Letters

Dear Investor,

 

Last year was a memorable one for crypto investors. The Nasdaq Crypto IndexTM (NCITM) returned over 104% in 2024 as the tide shifted dramatically for this asset class in the US. 

The year ended with a cooling of November’s post-election fervor, with the NCITM down 5.3% in December. But we are already seeing signs this may be short lived, with bitcoin once again crossing the $100,000 mark in the early days of the new year.  

In his latest Notes from the CIO, Samir Kerbage shared his thoughts on why it’s not just bitcoin investors should be watching, covering which other assets might outperform this year. On Wednesday, our Research Team will host a webinar to discuss our 2025 Outlook and what investors can expect in the coming weeks and months. 

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

 

The last month of the year saw a correction in crypto asset prices, following the spectacular performance in November following the US elections. In the first half of December, the optimism observed in the previous month still prevailed. On the 17th, the Nasdaq Crypto IndexTM (NCITM) was up almost 10% for the month. However, the FOMC's announcement indicating the possibility of fewer interest rate cuts in the future triggered a trend reversal, affecting both the price of crypto assets and traditional risk assets. By the 19th, the NCITM had turned negative and oscillated with a slight bearish bias until the end of the month, closing December down 5.3%.

The best performance within the index came from XRP, which rose just over 10%. Among the worst performers, Solana, Cardano, and Avalanche registered losses around 20%. The two main assets, Bitcoin and Ethereum, fell 3.7% and 10.0%, respectively.

Among the sector indices from CF Benchmarks, the highlight was Decentralized Finance (DeFi), which rose almost 6%, driven by the lending platform AAVE, which reached its highest value in collateralized assets and increased by almost 50% during the month. On the other hand, the Smart Contract Platforms and Digital Culture indices saw losses around 14%, with key assets giving back some of November's gains. The Vinter Hashdex Risk Parity Momentum Index dropped almost 4%, despite its largest-weighted asset, XRP, performing well.

Overall, 2024 was an excellent year for the crypto market. This is evident from the NCITM, which more than doubled in value during the period. Cyclical, regulatory, and technological factors lead us to believe 2025 could be an even better year. In 2024, Bitcoin stood out significantly, but the year end already hinted at how other theses, involving assets with smaller market capitalizations, could gain traction. We recommend reading our 2025 Crypto Investment Outlook for more details. We remain highly optimistic about the prospects for the crypto market this year and beyond.

 

Top Stories


MicroStrategy joins the Nasdaq 100 and heavily traded ‘QQQ’ ETF

MicroStrategy, a company known for its large Bitcoin acquisitions, joined the Nasdaq 100 index, reflecting the company’s growing relevance based on its Bitcoin-centric strategy. The inclusion means that funds and ETFs like the Invesco QQQ Trust will need to buy MicroStrategy shares, driving additional demand and potential appreciation of the company's value.

 

Ray Dalio predicts global debt crisis, backs Bitcoin, gold

The billionaire founder of Bridgewater Associates warned of a potential global debt crisis driven by unsustainable debt levels in the US, China, and other large economies, advising investors to seek wealth protection in assets such as Bitcoin and gold as monetary devaluation risks increase in the coming years.

 

US ETFs now hold more bitcoin than Satoshi Nakamoto

US bitcoin ETFs reached a historic milestone by accumulating over 1.1 million BTC in 2024, surpassing the estimated amount held by Bitcoin’s pseudonymous creator, Satoshi Nakamoto. These ETFs now hold more BTC than any other market participant, reflecting the growing institutional adoption of Bitcoin, solidifying ETFs as a key vehicle for accessing the crypto market and highlighting the role of traditional finance in crypto’s global acceptance.

 

 

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