Weekly Index Highlights, March 3, 2025

Market Performance Update

The digital asset market remained turbulent over the past week, with Bitcoin (BTC) and Ether (ETH) leading the downturn. BTC dropped -8.32%, erasing its previous gains and bringing its YTD return to -7.98%. ETH fared worse, plunging -16.09% weekly and extending its YTD loss to -33.19%. Chainlink (LINK) also faced significant pressure, declining -8.01% for the week, deepening its YTD loss to -26.53%. Avalanche (AVAX) slipped -3.87%, now down -38.37% YTD. Solana (SOL) continued its slide, falling -1.59% and accumulating a -21.11% YTD decline. In contrast, Cardano (ADA) saw a modest rebound, gaining 4.59% weekly but still down -13.53% YTD. XRP remained relatively stable, dipping -0.53% but holding a positive YTD return of 10.56%.

Sector Analysis

The CF DACS segments showed a mixed performance this week, with notable gains in some areas and steep declines in others. TIA led the Infrastructure sub-category, rallying +21.06%, while HBAR surged +15.69%, dominating the General Purpose Smart Contract Platforms segment. Maker (MKR) stood out in the Finance sub-category with a +9.89% gain. Meanwhile, the Meme Coin segment saw a bright spot as WIF jumped +12.95%, while RARI tumbled -13.41%. On the downside, Ethereum (ETH) and Injective (INJ) struggled, plunging -16.09% and -11.87%, respectively, dragging down the General Purpose Smart Contract Platforms segment. Lido DAO (LDO) weighed on the Asset & Wealth Management segment, sinking -20.00%. The Social segment also lagged, with SUPER dropping -12.18%. Market sentiment remains mixed amid a lower appetite for risk.

Staking Metrics

The CF Ether Staking Reward Rate Index (ETH_SRR) experienced moderate growth, rising 2.87 basis points over the past week to 2.78%, reflecting a 1.04% weekly increase. However, the YTD change remains negative, down 14.57 bps since the start of the year. The reward rate fluctuated notably intraweek, peaking at 4.34% before retreating.

Meanwhile, the CF SOL Staking Reward Rate Index (SOL_SRR) continued its upward trajectory, climbing 7.91 basis points to 7.09%, marking a 1.13% weekly gain and a strong 28.09 bps YTD increase. These movements highlight Solana’s sustained staking yield growth, while Ethereum’s reward rate remains volatile with a downward YTD trend.

Market Cap Index Performance

Our CF Capitalization Series saw broad-based declines this past week, with free-float market cap-weighted indices underperforming their diversified-weighted counterparts. The CF Institutional Digital Asset Index led the downturn, falling -9.38% for the week, bringing its YTD loss to -12.15%. The CF Ultra Cap 5 also struggled, dropping -8.34%. Among free-float market cap-weighted indices, the CF Large Cap Index declined -8.22%, while the CF Broad Cap Index fell -8.04%, deepening their YTD losses to -12.30% and -12.94%, respectively. Diversified-weighted indices fared slightly better, with the CF Large Cap Index down -7.72% and the CF Broad Cap Index declining -6.85%. Market sentiment remains cautious, with large-cap assets facing sustained pressure amid widespread corrections.

Classification Series Analysis

The CF Classification Series experienced broad declines this past week, signaling continued pressure across digital asset verticals. The CF DeFi Composite Index led the downturn, plunging -9.71% for the week and deepening its YTD decline to -33.02%. The CF Digital Culture Composite Index followed closely, falling -6.99%, bringing its YTD loss to -42.75%. The CF Blockchain Infrastructure Index also struggled, shedding -4.59% and extending its YTD drop to -37.25%. Meanwhile, the CF Web 3.0 Smart Contract Platforms Index saw a relatively smaller decline of -3.26%, with its YTD return slipping further to -26.08%. This week’s selloff underscores persistent challenges across sectors, as sentiment remains weak and market conditions continue to weigh on digital asset performance.

Volatility Index

The CF Bitcoin Volatility Index Settlement Rate (BVXS) rebounded this past week, rising 15.50% to settle at 54.85, though it remains down -11.67% YTD. Realized volatility also increased notably, starting the week at 30.09 and climbing to 49.82, signaling heightened short-term price fluctuations.

An analysis of the CME Bitcoin Volatility Surface indicates that while convexity remains elevated, implied volatility has surged, particularly for shorter-dated options. This suggests increased demand for near-term downside protection and upside exposure. Additionally, the flattening of the skew across strike ranges reflects a more neutral sentiment, though the sustained convexity underscores the potential for sharp price swings as option sensitivity to price changes remains pronounced.

Interest Rate Analysis

The CF Bitcoin Interest Rate Curve saw a broad adjustment this past week, with short-term rates rising while medium- and long-term tenors exhibited mixed movements. The SIRB increased to 4.89%, up from 3.95% the previous week, reflecting a slight increase in short-term borrowing costs. The 1-Week and 2-Week rates climbed to 0.39% and 0.46%, respectively, while the 3-Week and 1-Month tenors rose to 0.97% and 1.49%. Medium-term rates were mixed, with the 2-Month rate declining to 2.34%, while the 3-Month rate edged up to 2.41%. The 4-Month tenor saw a sharp drop to 0.13%. These shifts suggest fluctuating liquidity conditions and changing borrowing dynamics across maturities.