Weekly Index Highlights, January 20, 2025

Market Performance Update

The digital asset market saw a rebound over the recent week, with all CME CF Single Asset Series registering strong gains. Solana (SOL) led the surge, skyrocketing +50.68% weekly and boosting its YTD return to an impressive +41.07%. Chainlink (LINK) followed closely, climbing +34.12% for the week, pushing its YTD performance to +24.81%. XRP (XRP) also stood out, gaining +27.15% weekly and extending its YTD return to +43.79%. Cardano (ADA) advanced +15.30% for the week, now up +23.98% YTD. Bitcoin (BTC) posted a solid +13.42% weekly gain, bringing its YTD return to +11.46%. Avalanche (AVAX) and Ether (ETH) rounded out the pack, up +11.83% and +10.71% weekly, respectively, with both showing positive YTD returns.

Sector Analysis

The digital asset market saw strong weekly performance across all CF DACS segments, with clear leaders and laggards emerging. In Finance, the Borrowing & Lending category surged, led by SPELL (+38.71%), AAVE (+20.83%), and ONDO (+20.06%), pushing the sub-category’s average return to +15.07%. Trading tokens like BAL (+22.17%) and CRV (+19.75%) also performed well. Culture segments rebounded, with Meme Coins BONK (+30.53%) and DOGE (+19.40%) standing out, driving the category’s average to +10.10%. The Utility segment saw LINK (+34.12%) dominate, while Identity tokens like ENS (+23.06%) contributed to the segment’s +11.38% average. Settlement protocols soared, led by SOL (+50.68%) and HBAR (+27.28%) in Programmable platforms, while protocols like LTC (+27.47%) and XRP (+27.15%) led the pack in the non-programmable segment.

Staking Metrics

The CF Ether Staking Reward Rate Index (ETH_SRR) increased by +48.79 basis points over the past week, settling at a 3.19% annual rate. The index experienced notable intraweek volatility, peaking at 3.49% before stabilizing. On a year-to-date basis, ETH staking yields have risen by +27.17 basis points, reflecting a +9.29% increase.

In contrast, the CF SOL Staking Reward Rate Index (SOL_SRR) exhibited minimal movement, declining by -0.75 basis points to 6.82%, marking a slight -0.11% weekly change and a modest +0.16% YTD gain. The diverging trends highlight increased validator activity and yield volatility for Ethereum, while Solana remains steady.

Market Cap Index Performance

Our CF Capitalization Series reflected strong gains this past week, with diversified weightings slightly outperforming their free float counterparts. The CF Large Cap Index (Diversified Weight) led the charge with a +19.28% weekly return, boosting its year-to-date performance to +16.22%. Similarly, the CF Broad Cap (Diversified Weight) climbed +19.10% for the week, resulting in a +16.57% YTD gain.

Free float market cap-weighted indices followed closely, with the CF Broad Cap Index and CF Large Cap Index posting +15.67% and +15.76% weekly returns, respectively. The CF Ultra Cap 5 and CF Institutional Digital Asset Index also saw notable gains of +15.65% and +13.00%, underscoring robust performance across capitalization tiers as 2025 progresses.

Classification Series Analysis

The CF Classification Series indices delivered strong gains this past week, building on early-year momentum. The CF Web 3.0 Smart Contract Platforms Index led the pack with a +21.68% weekly return, boosting its year-to-date performance to an impressive +18.21%. The CF DeFi Composite Index also performed well, advancing +16.45% for the week and raising its YTD return to +4.76%.

Infrastructure protocols showed robust growth, with the CF Blockchain Infrastructure Index gaining +16.40% weekly and improving its YTD return to +8.27%. Similarly, the CF Digital Culture Composite Index rose +14.76% for the week, bringing its YTD performance to +4.81%. The sector-wide gains reflect renewed optimism and growing confidence in specialized digital asset verticals as 2025 progresses positively.

Volatility 

The CF Bitcoin Volatility Index Settlement Rate (BVXS) continued its upward trajectory, increasing by +3.41% over the past week to reach 64.02. Year-to-date implied volatility metrics now show a slight recovery, up +3.08%. Realized volatility also climbed steadily, peaking at 51.96 after starting the week at 45.48.

An analysis of the CME Bitcoin Volatility Surface shows a steepening skew, with increased convexity observed across strike ranges as of January 17, 2025, compared to earlier in the month. The sustained rise in both implied and realized volatility highlights heightened demand for options hedging, reflecting evolving sentiment and growing caution. These trends suggest increased focus on potential tail-risk events as institutions ramp up their call positioning.

Interest Rate Analysis

The CF Bitcoin Interest Rate Curve experienced notable repricing across tenors, with short-term rates seeing sharp increases. The SIRB dropped to 1.16%, reflecting a -31 basis point weekly decline, while the 1-Week tenor surged to 1.62% from 0.09%. Medium-term tenors also saw gains, with the 2-Week and 3-Week rates rising to 3.52% (+282 basis points) and 4.20% (+200 basis points), respectively.

Longer tenors showed a mix of stability and decline, with the 2-Month rate increasing slightly to 3.47% (+11 basis points) and the 5-Month tenor falling to 2.44% (-57 basis points). These shifts highlight increased demand for short-term borrowing and lending amid evolving institutional strategies for Bitcoin collateral.