/ Monthly Letter


Dec 2022

FTX earthquake rattles crypto markets

by Hashdex Research
5 min read
Dec 05, 2022

FTX earthquake rattles crypto markets

Dear Investor,

The last several weeks have tested the resilience of crypto markets like no other period before. While most risk assets had positive performance during November, crypto assets were shaken by the fallout from the FTX disaster. 

This has been a trying time. However, we remain fully committed to providing simple, secure, and regulated access to crypto assets for investors. In the wake of FTX, our CEO Marcelo sent a note to clients emphasizing this perspective, while our Head of Operations Bruno Passos answered questions about how we avoided FTX and the other failures of centralized institutions this year. These articles and others can be found on our Research Center

On Wednesday, Marcelo will join Michael Venuto, Co-Founder & CIO Tidal Financial Group, and Sui Chung, CEO of CF Benchmarks for our monthly call. We are releasing our 2023 Crypto Investment Outlook prior to the call, and the trio will discuss what recent events mean for crypto investors in the new year. You can register for the call here. 

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


-Your Partners at Hashdex 





Market Review


November was a positive month for most risk assets. Both the S&P 500 and Nasdaq 100 rose 5.5%, their second consecutive positive month. Among the good news that led to these results, probably the most important was the announcement of October's CPI (US), which was below market expectations and signaled a slowdown in inflation. 

Unfortunately, crypto assets were an exception to the solid performance of risk assets. After a few days with a slightly positive performance, the Nasdaq Crypto Index (NCI) was hit by the FTX collapse. By November 9, the index had fallen nearly 20% month-to-date. The following days were relatively stable. However, from November 18 to 21, fears of FTX’s contagion drove the NCI 7% down. At this point, bitcoin traded near US$15,500. A partial recovery took place in the final days of the month, as the NCI soared 12%. By the end of month, the NCI had dropped 16.6%, in line with bitcoin’s decline.

The Risk Parity Momentum Index, co-developed by Vinter and Hashdex, lost 16.7%. Among the CF Benchmarks Sector indices, the best performing was the DeFI Index, which dropped 18.8%. Its relatively better performance can be partially explained by the resilience of the DeFi protocols during this most recent turmoil. The Digital Culture Index lost 24.3% of its value and the Web3 Smart Contract Platforms Index had the worst performance, plunging 32.2%, mostly due to its exposure to Solana, which lost more than half of its value and is closely related to Alameda Research (the trading firm owned by FTX founder Sam Bankman-Fried).  

In historical perspective, November's result is far from being among the worst months for the crypto market. Even so, it was a heavy blow due to the crisis that preceded the downturn in prices. At Hashdex, we always reinforce the long-term view for crypto investments. Over an extended time frame, fundamentals prevail. In our view, the FTX collapse, as well as the other events that occurred this year (Terra/LUNA, 3AC, Celsius, etc.), have a negligible impact on the fundamentals of the main crypto assets. Despite the observed price shocks, Bitcoin and Ethereum, for example, still present very strong investment cases.

We remain confident about the prospects for crypto assets and blockchain technology and are always available to answer any questions you may have.


Top Stories


FTX founder speaks

Sam Bankman-Fried (SBF), spoke at the New York Times DealBook conference about his role in the collapse of FTX. He cited “huge management failures” and insisted he did not have intentions to commit fraud. Hashdex had no exposure to FTX, FTT, or Alameda Research, but the implosion of the exchange has sent shockwaves throughout the crypto ecosystem. 

Genesis Global Capital claims no plans for bankruptcy

Bloomberg published an article claiming that Genesis Global Capital was “struggling” to raise the $1 billion it would need to remain solvent, while the company issued a statement that clarified it had “no plans to file bankruptcy imminently.” In the wake of FTX, Genesis Global Capital suspended redemptions. Hashdex has no counterparty risk exposure to the company.

Self-custody thrives as customer become weary of centralized exchanges  

Data from Glassnode showed that FTX’s disastrous collapse caused a mass exodus of tokens from centralized exchanges as investors looked to safeguard their tokens in self-custody. Decentralized Exchanges (DEXs) also benefited from investors looking to move away from traditional exchanges. Uniswap, leader in market share amongst DEXs, saw its trading volume triple after news got out that Binance signed a letter of intent to purchase FTX.




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.

© 2023 Hashdex Asset Management Ltd.
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