Digital assets currently find themselves in a paradoxical environment, shaped by continued industry developments, macroeconomic factors, and the potential for a new regulatory regime. Despite progress in curbing inflation and a loosening labor market leading to declining interest rates, a risk-off sentiment has prevailed. Concurrently, institutional adoption reached a new milestone with the launch of spot Ether ETFs in the United States. These regulated products have attracted steady fund flows, highlighting robust interest in this emerging asset class, despite more muted price action. The success of these spot products has even spurred asset managers to explore future opportunities, evidenced by early applications for spot Solana ETFs submitted to the SEC.
Market volatility resurged in the latter half of the rebalance period, primarily triggered by the unwinding of the "Yen Carry Trade," dampening risk appetite across broader markets. On the monetary stage, Federal Reserve officials have led markets to the starting line of the next rate-cutting cycle. Jerome Powell's dovish performance at the August Jackson Hole Symposium helped mitigate some market losses. Crypto prices responded positively to these potential rate-cut signals, benefiting from their perceived inverse relationship with interest rates.
Attention has also pivoted towards the upcoming U.S. elections in November, with market participants carefully scrutinizing potential policy changes that might emerge from a new administration. Notably, former President Trump and various policymakers have endorsed Bitcoin as a potential strategic reserve asset for the U.S. Treasury, underscoring the growing influence of digital assets in the broader economic and political sphere. Digital assets have found advocates across the political spectrum, with pro-crypto Democrats calling for a "reset" with the industry after an adversarial past four years.
Ultra Caps Show Resilience as Culture Tokens Dive
Gold Surpasses Crypto in Asset Class Race
Dencun's Domino Effect
AAVE Sees Record Borrowing Activity
Solana's Scalability Powers User Surge
Helium’s Data Demand Drives Token Surge
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Lastly, our Quarterly Attribution Reports are designed to help investors understand the performance of digital assets through a purpose-centric lens called the CF Digital Asset Classification Structure (CF DACS). To learn more about CF DACS, please utilize our interactive CF DACS Token Explorer.
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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell any of the underlying instruments cited including but not limited to cryptoassets, financial instruments or any instruments that reference any index provided by CF Benchmarks Ltd. This communication is not intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. Please contact your financial adviser or professional before making an investment decision.
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Gabriel Selby
CF Benchmarks