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Jan 03, 2023

CF Benchmarks Monthly Market Recap

This report has been designed to help you see at a glance which blockchain economic categories have been driving recent crypto market performance, get a sense of where institutional investors are allocating capital earmarked for digital assets, and understand how crypto fits into, impacts and is influenced by the broader market picture.

Hawkish Fed kills early price gains

  • Our portfolio indices erased their early December gains after the Federal Reserve doubled down on their fight to tame inflationary pressures.
  • Blue-chip tokens remained relatively resilient with our Ultra Cap 5 Index finishing the month just 1.3% lower and our Diversified Large Cap Index (-7.9%) outperforming the remaining cohort.
  • The CF Digital Culture Index finished the month as the worst performer (falling over 17%) and edging out last month’s laggard, the CF Smart Contract Platforms Index (-16.3%).

Monthly Index Performance

Source: CF Benchmarks, Bloomberg, as of December 31, 2022

Major Crypto-Pairs (USD)

Source: CF Benchmarks, Bloomberg, as of December 31, 2022
  • The two mega-cap tokens, Bitcoin and Ether, performed relative defensively, falling only 2.3% and 6.0% (respectively).
  • Doge finished the month as the worst performer, falling over 33% as the popular meme coin continued to pair its post-Twitter takeover rally.

Trailing Risk-Adjusted Returns

Source: CF Benchmarks, Bloomberg, total return indices referenced are denominated in USD, as of December 31, 2022
  • When compared to traditional asset classes, Bitcoin and Ether continue to provide the best risk-adjusted performance over a longer-time horizon.

Currency of Flows

Source: CF Benchmarks, Bloomberg, as of December 31, 2022
Source: CF Benchmarks, Bloomberg, as of December 31, 2022
  • Fund flows by asset-type remained broadly negative, falling -$96m with most of the decrease concentrated in ETH funds.
  • From a regional perspective, Europe and North America saw almost $100M in fund outflows as the Asia Pacific region edged a slight gain (+500K).

Futures Positioning and Open Interest

Source: CF Benchmarks, Bloomberg, as of December 31, 2022
Source: CF Benchmarks, Bloomberg, as of December 31, 2022
  • Bitcoin futures positioning remained slightly bearish in December, with net positioning rising from -456 to -346 contracts.
  • Open interest trends for Bitcoin and ETH futures was mixed, with Bitcoin futures edging slightly lower as ETH continued to climb higher.  

On-chain updates: Total Value Locked (TVL) in DeFi protocols

Source: CF Benchmarks, DeFiLlama, Kraken Intelligence, as of December 31, 2022
  • Total Valued Locked (TVL) in DeFi Protocols edged lower in the month of December (falling from $60bn to $57bn). This proxy for gauging the size of DeFi has stabilized in the $55bn to $65bn range since the FTX / Alameda collapse in November.  

NFT Transactions and Volumes

Source: CF Benchmarks, DeFiLlama, Kraken Intelligence, as of December 31, 2022
  • Activity for NFTs rebounded in December, with both total transaction increasing over 20% and prices (or volumes) rising almost 30%.  

Download The CF Benchmarks Monthly Market Recap here (PDF file)