Dear Investor,

 

The bull market is back. 

The Nasdaq Crypto Index had a double digit return in November and bitcoin is currently trading above $44,000.  While there are certainly potential headwinds in the new year, the combination of macro conditions, a spot ETF in the US, and Bitcoin’s halving are setting up 2024 to be monumental for crypto investors.  

We cover these topics and more in our 2024 Crypto Investment Outlook and on Wednesday. December 13th we’ll discuss what investors should be thinking about going into the new year in our webinar. You can register for the webinar here. 

This will be our last Monthly Letter for 2023. As crypto enters a new regime of opportunity in the new year, we want to thank each of you for your ongoing trust. 

In 2024, our team is uniting around a theme of getting “back to boldness,” and we are greatly appreciative to have you along for this exciting journey. 

 

-Your Partners at Hashdex 

 

 

 

 

Market Review

 

November was quite a positive month for risk assets, with the S&P 500 and Nasdaq 100 recording gains of 9.1% and 10.8%, respectively. As a result, both indices recovered losses accumulated over the three consecutive months of decline between August and October. The explanation for this increase is primarily an improvement in the macroeconomic outlook in the US, including inflation data below expectations, reaffirmations that the FOMC has already concluded the interest rate hiking cycle, and signs of improvement on the fiscal front. In this environment, crypto assets also appreciated, with the Nasdaq Crypto Index rising 10.7%, with several altcoins driving the outperformance.

Bitcoin (+9.6%) and Ethereum (+13.0%) were the fifth and fourth best performers among the eight constituents of the NCI. Topping the podium were Uniswap, Chainlink, and Polkadot, with increases of 44.1%, 26.6%, and 22.7%, respectively. One of the reasons cited for the strong appreciation of Uniswap was the increase in transaction fees collected by the decentralized exchange, which had its best month in history in November.

Among the sectoral indices from CF Benchmarks, the best result came from the Smart Contract Platforms, which surged 34.5%, led by the highest-weighted asset, Solana (+63.9%). Despite the strong appreciation, Solana was only the third best among the index constituents, behind Immutable X (+96.1%) and Avalanche (87.0%). The Decentralized Finance (DEFI) and Digital Culture indices rose by 26.1% and 16.2%, respectively. The Vinter Hashdex Risk Parity Momentum Index appreciated by 22.4%.

Returning to the NCI, with the November results, it surpassed a 100% gain for the year. Optimism has returned to dominate the market, and assets other than bitcoin and ether are once again drawing attention. All of this leads to our continued belief that 2023 will close strongly. This raises expectations for 2024, when there will be the Bitcoin halving and likely the first crypto ETFs listed in the US.

 

Top Stories

UK asset managers given go-ahead to launch ‘tokenized’ funds

The UK's financial regulator endorses a blueprint for asset managers to tokenize funds using blockchain. Tokenization is seen as a way to boost efficiency and transparency in financial services, with real-time record-keeping reducing costs and enabling quicker settlements. This aligns with the global trend of investment firms adopting digital asset strategies and tokenization.

 

MicroStrategy buys $593M of BTC, may raise up to $750M in new stock sale

MicroStrategy, led by Michael Saylor, has made its largest bitcoin purchase in over two years, acquiring an additional 16,130 bitcoins for $593.3 million. This transaction elevates the company's total bitcoin holdings to 174,540 bitcoins, reassuring its leadership among public companies in including bitcoin as a balance sheet strategy.

 

Binance's Zhao pleads guilty, steps down as part of DOJ settlement

The US Department of Justice closed a $4.3 billion settlement with crypto exchange Binance, concluding its investigation into the company's alleged involvement in money laundering, bank fraud, and sanctions violations. As part of the deal, Binance must meet conditions including the payment of fines, admission of non-compliance, and setting up a monitoring process for future legal compliance.

 

Spot bitcoin ETF discussions continue at SEC

Memos released by the SEC show that the regulator continues to meet with issuers that have filed for spot bitcoin ETFs. The ongoing discussions are a positive sign that the SEC will at some point approve spot ETFs, but the timing of this remains unclear.

 

 

______________________________

_{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.}

_{Nasdaq®, Nasdaq Crypto IndexTM, NCITM, Nasdaq Crypto Index EuropeTM, NCIETM are registered trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for use by Hashdex Asset Management Ltd. The Hashdex Nasdaq Crypto Index Europe ETP (the Product) have not been passed on by the Corporations as to their legality or suitability. The Product is not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT.}