/ Monthly Letter


Nov 2022

Rays of light for crypto as inflation clouds linger

by Hashdex Research
5 min read
Nov 03, 2022

Rays of light for crypto as inflation clouds linger

Dear Investor,

October was a peculiar month. While US inflation has been the main driver of asset prices this year, core indicators released during the month — more inflationary than expected — didn’t lead to negative results for risk assets like equities and crypto. In this month’s letter, we review some of the reasons for this dichotomy in the current environment. 

Early in the month, Morgan Stanley released a report on the global crypto ETP landscape, which supports our belief that access to crypto investment products remains a high priority for many investors. You can read our perspective on the report here. 

October ended with the 14th anniversary of the Bitcoin whitepaper. We remain as bullish as ever on the world’s first cryptocurrency and recently updated our BTC investment case, which can be found here. 

Next week, our monthly investor call will be a look back over 2022, exploring the fundamental leaps crypto has made this year — despite the ongoing crypto winter — and how investors should be thinking about these developments going into 2023. You can register for the call here. 


As always, our team is here to answer any questions you might have about these markets. 


-Your Partners at Hashdex 







October: Positive month in spite of negative inflation news


October was a peculiar month. Inflation in the US has been the main driver of asset prices in 2022. Three core indicators released in October were more inflationary than expected by the market: higher CPI, lower unemployment and stronger GDP growth (3rd quarter). Under these circumstances, many would bet on a negative result for the equities but it didn’t happen. S&P 500 rose 8.1%, nearly offsetting the losses from September, while Nasdaq 100 returned 4.0% due to some negative earnings announcement from major companies such as Meta and Google.

This apparent dichotomy was partially explained by inflation itself. In spite of the numbers announced, some analysts argue that there are some reasons to believe that inflation will drop soon, based on some slowing down signs from housing. Some others point that the possibility of recession will limit the strength and duration of the tightening cycle. Apart from inflation, substantial buybacks and relevant technical points were among the reasons presented for the positive month.

In this environment, cryptoassets also had a good performance, with the Nasdaq Crypto Index growing 7.6%  Most of this result was mostly built in the final days of the month, lagged compared to equities. Among the idiosyncratic facts of the crypto environment that helped pushing prices up, we can mention the new regulation in the UK that recognizes crypto as financial instruments and a clearer guideline from Apple on how crypto and NTFs will interact with AppleStore.

Another highlight is the surge of Ethereum (16.6%), being the top performing constituent of the NCI and closing the gap relative to Bitcoin (4.0%) since The Merge. NCI outperformed all the three sector benchmark indexes followed by Hashdex products: CF DeFi (7.5%), CF Smart Contracts (1.0%) and CF Digital Culture (-2.1%). The worst performing asset in the NCI was Axie Infinity, plunging more than 27%, which highly impacted the CF Digital Culture Index. Year to date, NCI has dropped.56.5%.


Top Stories

Google and Coinbase announce strategic partnership

Google Cloud and Coinbase have announced a strategic partnership that promises to involve three of Coinbase’s main business units. The partnership is an important validation for the crypto industry and its long-term investment case. Read more here. 

Fidelity survey shows institutional interest remains high

Fidelity, one of the largest asset managers in the world, released the results of a survey that showed the adoption of digital assets among institutional investors increased year-over-year. Earlier this year, Fidelity announced plans to include a BTC investment option for its 401k plans and began trading ETH for institutions this month. 

Mastercard forms partnership to bring crypto to traditional banks

Mastercard announced a partnership with Paxos, a crypto infrastructure provider used by PayPal, to help banks offer crypto trading. Mastercard believes many investors are interested in crypto but are intimidated by the prospect of investing through crypto exchanges and would rather invest through their current financial institution.

Brazil's largest digital bank to launch proprietary token 

Nubank, Brazil’s largest digital bank by market value, announced plans to launch its own crypto currency in Brazil, Colombia, and Mexico in 2023. The Polygon based token, nucoin, will be made available to its 70 million clients as part of a discounts and perks program. 




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.

© 2022 Hashdex Asset Management Ltd.
Stay in Touch
Get timely market updates and our monthly newsletter for investors.

No spam. Ever.