Sign in Subscribe

CF Benchmarks Quarterly Attribution Reports - December 2023

Thoroughly dissect and comprehend the performance of our flagship portfolio indices at the constituent, category, sub-category and segment levels.

Gabriel Selby

• 3 min read
CF Benchmarks Quarterly Attribution Reports - December 2023
upload in progress, 0
Click to Explore Compilation Report

Possible ETF Approval Sparks Year-End Rally as Ether Joins Approvals Queue

Despite the existing regulatory challenges and roadblocks that remain, institutional interest in digital assets has witnessed a swell in activity over recent months. Open interest on the Chicago Mercantile Exchange (CME) has risen - the total number of outstanding futures contracts for both Bitcoin and Ether has increased over 76% and 40% respectively since our last rebalance period, with the former surpassing its all-time high set back in June. Perhaps the largest contributing factor for this renewed interest is the potential of spot Exchange Traded Fund (ETF) products for the two largest tokens. Many investors also see the approval of spot ETFs as a major 'unlock' for the crypto industry. The ETF fund structure has grown exponentially since they were first introduced in the 1990s, breaching the $7tn level this past year in the U.S. Spot token ETFs would mark a major catalyst for adoption as retail investors would have access to the pure exposure of Bitcoin and Ether in a traditionally practical fund structure for the very first time. While many regulatory headwinds remain, the approvals of these spot ETFs could be seen as the very first steps in deconstructing these aforementioned challenges and hurdles that have plagued the digital asset class.

Over the last few months, several macroeconomic trends have impacted global markets. Inflation pressures have continued to steadily decline across the globe. With the latest data points coming in below expectations for both the U.S. and the Eurozone, this has allowed interest rate expectations for 2024 to shift in dovish manner. Some forecasters are now anticipating that the Federal Reserve could begin decreasing their benchmark rate as soon as March 2024. Furthermore, economic weakness, such as slowing job growth and cyclical demand, could give the central bank more slack in adjusting its tightening stance to the downside.

Given the current backdrop, investor sentiment has become more constructive for the digital asset class. All of our flagship portfolio indices posted strong performance over the last rebalance period, outperforming traditional risky assets, such as U.S. and global equity markets by a wide margin. The CF Web 3.0 Smart Contract Platforms Index led the pack, with the CF Blockchain Infrastructure Index coming in a close second. Both category indices outperformed the broader market (as measured by the CF Floating Broad Cap Index) by a significant margin. Lastly, the CF Digital Culture Composite Index continued to struggle, lagging behind the rest of the major portfolio indices for the second straight rebalance period.

Index Performance

Source: CF Benchmarks, Bloomberg, as of 12/01/2023

To read the full compilation report or a specific index's report, please click on the respective links below:

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.

Contact Us

Have a question or would like to chat? If so, please drop us a line to:

info@cfbenchmarks.com

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.

CF Benchmarks Ltd (“CF Benchmarks”), a company registered in England and Wales with company number 11654816 and authorised and regulated by the Financial Conduct Authority. Information about us can be found on the Financial Services Register (register number 847100).

Registered Office: 6th Floor One London Wall, London, United Kingdom, EC2Y 5EB.

You agree not to, and have no rights to, use the CF Benchmarks Data to create, calculate, issue, settle, maintain, support or develop any financial instruments (including but, without limitation exchange traded products, certificates, warrants, contracts for difference, swaps, binary options, structured products), indices, products, services (including but without limitation, portfolio management services, pre- and post-trade risk management services, or valuation services) or any other derivative works without the express written consent of CF Benchmarrks.

You agree not to analyze, reverse-engineer or disassemble any CF Benchmarks data and not to insert any code or product to manipulate the Website content in any way that affects any user’s experience. Unless CF Benchmarks gives you prior written permission, use of any Web browsers (other than generally available third-party browsers), engines, scripts, software, spiders, robots, avatars, agents, tools or other devices or mechanisms (such as crawlers, browser plug-ins and add-ons, or other technology) to navigate, access, copy in bulk, retrieve, harvest, index, search or analyse any portion of the Website is strictly prohibited.

No part of this information may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of CF Benchmarks Ltd. Use and distribution of the CF Benchmarks data requires a license from CF Benchmarks or its authorized licensing agents.

All information is provided for information purposes only. All information and data contained on this website is obtained by CF Benchmarks, from sources believed by it to be accurate and reliable. Such information and data is provided "as is" without warranty of any kind.

CF Benchmarks, nor its directors, officers, employees, partners or licensors make any claim, prediction, warranty or representation whatsoever, expressly or implied, either as to the accuracy, timeliness, completeness or merchantability of any information or of results to be obtained from the use of the CF Benchmarks indices or the fitness or suitability of the same indices for any particular purpose to which they might be put. Any representation of historical data accessible through CF Benchmarks indices is provided for information purposes only and is not a reliable indicator of future performance.

No responsibility or liability can be accepted by CF Benchmarks nor their respective directors, officers, employees, partners or licensors for any loss or damage in whole or in part caused by, resulting from, or relating to any error (negligent or otherwise) or other circumstance involved in procuring, collecting, compiling, interpreting, analysing, editing, transcribing, transmitting, communicating or delivering any such information or data or from use of this website or links to this website.

CF Benchmarks and its respective directors, officers, employees, partners or licensors do not provide investment advice and nothing accessible through CF Benchmarks, should be taken as constituting financial or investment advice or a financial promotion. Charts and graphs are provided for illustrative purposes only. Index returns shown may not represent the results of the actual trading of any assets.

CF Benchmarks is a member of the Crypto Facilities group of companies which is in turn a member of the Payward, Inc. group of companies. Payward, Inc. is the owner and operator of the Kraken Exchange, a venue that facilitates the trading of cryptocurrencies. The Kraken Exchange is a source of input data for certain CF Benchmarks indices. Payward, Inc. is the owner and operator of the Staked, a venue that operates the block production nodes for decentralized PoS protocols on behalf of institutional investors. Staked.us is a source of input data for certain CF Benchmarks indices.

Please refer to the individual product family documentation for more information about applicable input data sources.