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The Rise of Index Investing in Crypto

Despite undeniable growth, crypto remains volatile, posing challenges for even seasoned investors. An increasingly popular solution to navigating these risks is crypto index investing, says Julien Vallet, CEO, Finst.

Cryptocurrency has evolved as a global asset class with significant implications for modern investment portfolios. Despite undeniable growth, crypto remains volatile, posing challenges for even seasoned investors. An increasingly popular solution to navigating these risks is crypto index investing. Crypto index funds are products that bundle multiple cryptocurrencies into a single vehicle, offering a diversified, systematic approach to gaining exposure to the digital asset market while mitigating some of its inherent risks.

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The value of crypto index investing

Increasing popularity among institutional investors

An increasing number of institutional investors are looking for ways to participate in crypto without taking on unnecessary risk. Index funds and exchange-traded funds (ETFs) that focus on digital assets have emerged as a compelling option. We’ve experienced this trend as well with 30% of our retail and institutional clients opting to diversify their portfolios through a crypto index bundle.

Tailoring the index to investor goals

Crypto index funds have the ability to tailor exposure based on specific investment goals and risk tolerance. Some indexes focus exclusively on large-cap cryptocurrencies like bitcoin and ether, providing a stable base of well-established assets. Others may prioritize high-growth sectors like decentralized finance or newer blockchain protocols, offering higher potential upside alongside increased risk.

Selecting the right index strategy depends on a detailed understanding of the underlying assets and market dynamics. Diversified exposure can enhance the risk-adjusted return profile of a portfolio, but the nuances of index composition should align with an investor’s broader strategy.

Index investing offers a strategic, risk-managed approach for professional investors looking to capitalize on the crypto market’s growth. By offering diversified exposure, reducing operational complexity, and providing a controlled entry into the crypto ecosystem, index funds and ETFs are becoming valuable tools for those navigating the digital asset landscape.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.

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The Protocol: Inside North Korea’s Campaign to Put Crypto Developers on Payroll

In this week’s issue of CoinDesk’s weekly blockchain tech newsletter, we’ve got names, details and anecdotes on crypto companies’ unwitting hires of North Korean developers. PLUS month-end rankings for bitcoin, ether and other digital assets in the CoinDesk 20 index during a strangely bullish September.

When trying to determine if your crypto company might be unwittingly employing North Korean workers, sometimes it helps to pay attention to little details that just don’t seem to add up – such as when your workers claim they were distracted by an earthquake in Japan, when there was no recent earthquake in Japan. That’s just one of the tantalizing details from our Sam Kessler’s investigative opus, hot off the press, detailing North Korea’s successful campaign to place its workers on crypto-company payrolls.

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“Naoki Murano,” one of the suspected North Korean IT workers identified by ZachXBT, provided companies with an authentic-looking Japanese passport. (Image courtesy of Taylor Monahan)

HERMIT EMPIRE: An investigation published Wednesday by CoinDesk’s Sam Kessler reveals just how aggressively and frequently North Korean job applicants have targeted crypto companies in particular – successfully navigating interviews, passing reference checks, even presenting impressive histories of code contributions on the open-source software repository GitHub.

Kessler spoke to more than a dozen crypto companies that said they inadvertently hired IT workers from the Democratic People’s Republic of Korea (DPRK), as the nation is officially called. These interviews with founders, blockchain researchers and industry experts reveal that North Korean IT workers are far more prevalent in the crypto industry than previously thought. Virtually every hiring manager approached by CoinDesk for this story acknowledged that they had interviewed suspected North Korean developers, hired them unwittingly, or knew someone who had.

“The percentage of your incoming resumes, or people asking for jobs, or wanting to contribute – any of that stuff – that are probably from North Korea is greater than 50% across the entire crypto industry,” said Zaki Manian, a prominent blockchain developer who says he inadvertently hired two DPRK IT workers to help develop the Cosmos Hub blockchain in 2021. “Everyone is struggling to filter out these people.”

Among the unwitting DPRK employers identified by CoinDesk were several well-established blockchain projects, such as Cosmos Hub, Injective, ZeroLend, Fantom, Sushi and Yearn Finance. “This has all been happening behind the scenes,” said Manian. This investigation marks the first time any of these companies have publicly acknowledged that they inadvertently hired DPRK IT workers.

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Crypto Winter-Era Seed Startups Mostly Persist Despite Tumult and Crisis

Ethereum had the most projects among the 2022 cohort, Bitcoin had the lowest fail rate, and Binance had the highest fail rate. (Lattice)

Crypto’s hellish 2022 was awash in washouts: Terra-Luna crashed, FTX rugged and crypto lenders bombed. Yet the disasters failed to sink many of the teams perhaps most vulnerable to mayhem: early-stage startups.

Over 80% of the crypto startups that announced seed rounds in 2022 continue to build today, according to a new report from Lattice VC.

The finding may add some retrospective hope to what was otherwise crypto’s darkest year yet. Venture capital companies deployed over $5 billion into 1,200 teams that unveiled their seed rounds during the tumultuous months of 2022 – 2.5 times more capital than in 2021.

“Because of the massive influx of capital for 2022, there was just a natural expectation” of a higher fail rate, said Mike Zajko, co-founder at Lattice. The prediction hasn’t really come to fruition.

Go here for the full article by CoinDesk’s Danny Nelson

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Top picks of the past week from our Protocol Village column, highlighting key blockchain tech upgrades and news.

Diagram of Strata’s system architecture (Strata)

Bitcoin’s Uncharacteristically Strong September Yields to Unpleasant October Surprise

Bitcoin (BTC) is suffering its worst start to October, typically its most bullish month, as Israel-Iran tensions have flared. Some $450 million in bullish crypto bets were liquidated.

September, on the other hand, looked bullish – typically in the largest cryptocurrency’s worst month of the year.

Looking back on September, the CoinDesk 20 index of blue-chip digital assets outperformed the Standard & Poor’s 500 Index, as well as gold. Here’s what that looked like, courtesy of my colleague Tracy Stephens at CoinDesk Indices

(Tracy Stephens/CoinDesk Indices)

Bitcoin (BTC), despite gaining an entirely respectable 8.3% during the month, was a bit of a laggard compared to the rest of the CoinDesk 20 members.

The alternative layer-1 blockchain’s NEAR token topped the charts, with a 36% climb.

Ethereum’s ETH put in another month of subpar performance, in what has been an inarguably lackluster year for the largest smart-contract blockchain.

Polygon’s MATIC, which is being swapped out for a new token called POL, was the index’s sole loser during the month, sliding 3.2%.

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SEC Enforcement Director Gurbir Grewal Is Leaving the Agency

Deputy Director Sanjay Wadhwa will take over for Grewal as acting enforcement chief.

Gurbir Grewal, the U.S. Securities and Exchange Commission’s (SEC) director of enforcement, is stepping down and departing the agency, according to a Wednesday press release.

Grewal’s last day will be Oct. 11. Sanjay Wadhwa, Grewal’s deputy director of enforcement, will step in as acting director of the SEC’s enforcement division after Grewal’s departure. Sam Waldon, who is currently the chief counsel for the enforcement division, will be named acting deputy director.

“We have been incredibly fortunate that such an accomplished public servant, Gurbir Grewal, came to the SEC to lead the Division of Enforcement for the last three years,” SEC Chairman Gary Gensler said in a press statement. “Every day, he has thought about how to best protect investors and help ensure market participants comply with our time-tested securities laws. He has led a Division that has acted without fear or favor, following the facts and the law wherever they may lead.”

Under Grewal’s three-year tenure as enforcement director, the SEC authorized more than 2,400 enforcement matters, leading to over $20 billion in disgorgement and civil penalties, and handed out over $1 billion in awards to whistleblowers, according to the press release.

In their announcement of Grewal’s departure, the agency lauded his crypto-related enforcement track record in particular, writing:

“Under Mr. Grewal’s leadership, the Division recommended and the Commission authorized more than 100 enforcement actions addressing widespread noncompliance in the quickly growing crypto space, including against the operators of the largest crypto asset trading platforms in the world and the operator of the largest crypto asset trading platform in the United States for depriving investors of crucial investor protections by not complying with the registration provisions of the federal securities laws.”

The SEC has announced a number of enforcement actions and settlements in the crypto space over the past few weeks, ahead of the end of the fiscal year, including eToro, Mango Markets and Galois Capital.

Bitcoin Bounce Above $62K Quickly Fades; Ether, XRP, ADA, LINK Lose as Torrid October Continues

The largest cryptocurrency’s price is currently retesting its “Bull Market Support Band” trend indicator, where prices often rebounded from pullbacks during uptrends.

Bitcoin’s (BTC) modest rebound from the geopolitical turmoil-induced sell-off was arrested at $62,400 during the Wednesday U.S. session, tumbling back below $61,000 in the later hours.

BTC recently changed hands at $61,100, down 1.5% over the past 24 hours, while the broad crypto market benchmark CoinDesk 20 index was 2% lower during the same period. Altcoins fared worse, with ether (ETH), Ripple’s XRP (XRP), Cardano (ADA), Chainlink (LINK) and Near (NEAR) declining 3%-5% during the day.

U.S. stock indexes remained mostly flat after yesterday’s losses on rising conflict between Israel and Iran. Gold pared some of its gains while oil retraced to $70 from its intraday top at $72, perhaps a sign of easing investor concerns over further military escalation.

The Japanese yen tumbled 1.8% against the U.S. dollar on incoming prime minister Shigeru Ishiba ruling out further interest rate hikes in the near term, saying that the country’s economy isn’t ready yet for more restrictive monetary policy. Keeping central bank policy loose would support risk assets, as the Bank of Japan’s surprise rate hike in August triggered a broad-scale market crash as traders were forced to unwound their positions funded by cheap yen-based loans.

Bitcoin’s key test

Crypto’s dismal start of October, which was widely expected to be a bullish month, has left crypto traders worried about further downside as the euphoria from bitcoin’s swift run to $66,000 from $52,000 last month quickly faded.

Whether prices rebound or tumble lower may depend on bitcoin’s ongoing retest of its “Bull Market Support Band,” a key trend indicator defined by the asset’s 20-week simple moving average (SMA) and a 21-week exponential moving average (EMA). The band often served as support for prices during previous uptrends, and currently ranges between $61,100 and $62,900. A bounce from the band would reinvigorate the uptrend from the September lows to target, but a decisive break below could undo all the recovery, with many more weeks chopping below $60,000.

Analysts at crypto hedge fund QCP said that bitcoin could tumble to as low as $55,000 if the Middle East conflict escalates further and investors move risk-off, but the $60,000 level acted as solid support so far.

“Middle East geopolitics will steal the limelight for now, but the shallow sell-off suggests that the market remains well bid for risk assets,” QCP said in a Tuesday update.

“This minor setback shouldn’t distract from the bigger picture,” QCP analysts added. “Asset prices are expected to remain supported heading into 2025, as both the largest (the Federal Reserve) and third-largest (People’s Bank of China) central banks in the world have started their cutting cycles in earnest.”

Blockchain analytics firm CryptoQuant noted signs of BTC demand recovering from the summer slump, driven by U.S.-listed spot ETFs.

If demand picks up and favorable year-end seasonality materializes, BTC could target the $85,000-$100,000 range in the last quarter, according to CryptoQuant.

“These levels align with the upper range of the on-chain trader realized price bands, where short-term traders often take profits following price rallies,” CryptoQuant analysts said.

SEC’s Gensler Won’t Reveal his View on Trump’s Bitcoin Reserve, Reiterates Bitcoin Isn’t a Security

Gensler was responding to CNBC’s question on whether the SEC chair was “warming up to top-tier crypto?”

U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler reiterated his stance that bitcoin (BTC) is “not a security” but doubled down on his stated position that regulatory clarity exists for the crypto space in an interview with CNBC on Thursday.

“As it relates to bitcoin, my predecessor and I have said, that’s not a security,” Gensler said. “You now have a way that you can actually express that view — buy into that through exchange-traded products.” Such products were approved by the SEC in January, marking a monumental shift in the agency’s approach to the crypto space.

Gensler was responding to CNBC’s Joe Kernen asking whether the SEC chair was “warming up to top-tier crypto?”

“Where are you on what’s called altcoins, there’s 15 or 20 thousand of them. Where are you Joe?” Gensler asked.

Gensler refused to reveal a position on what he thought about Donald Trump’s idea “to keep the current government holdings “as the core of the strategic national bitcoin stockpile.”

“I have a view but given my role and also we are in election season so for the listening public I will stick to my chalk lines which are securities markets and chairman Powell and others can speak to that.”

Apart from bitcoin, Gensler has maintained that the vast majority of other tokens fit the legal definition of securities that are rightfully under the SEC’s jurisdiction. This position remains despite industry push back, lawsuits against the SEC and a recent hammering the SEC got for two hours during a congressional hearing titled “Dazed and Confused: Breaking Down the SEC’s Politicized Approach to Digital Asset.”

Asked by CNBC if the SEC had been regulating by litigation, Gensler once again argued that current laws give his agency the power to oversee the crypto space.

“Not liking the rules is not the same as that there aren’t rules.”

Gensler also said that he didn’t know where bitcoin will be in 20 years but that that he felt “the field is going to have a challenge building trust” which it is “already” when “there’s so many fraudsters, scammers.”

“Look at the leading lights in this field, in the crypto field just two years ago. A number of them are in jail right now, and I’m not just talking about SBF… there’s been tens of billions of dollars of losses and bankruptcies and so forth,” Gensler said on Thursday. “What innovative field in America survives without having building trust in that field and protecting investors or consumers?”

Binance founder Chang Peng “CZ” Zhao, who is currently serving a four-month prison sentence, will be a free man by the end of this week.

U.S. Crypto Industry Will Follow a Different Path From Rest of World: BitMEX Group CEO

BitMex does not operate in the U.S. and is positioned more in Asia than any other part of the world.

SINGAPORE —The U.S. crypto market will take a different path from the rest of the world, consolidating more with traditional finance (TradFi), because of differences in the regulatory environment and customer needs, Stephan Lutz, CEO of crypto exchange BitMEX, said in an interview at Token2049 in Singapore.

“I think that the U.S. crypto businesses will pivot in one direction that is consolidating TradFi with crypto,” Lutz said. “If you look at Coinbase, if you look at Circle, you look at Kraken, they are basically going more and more into becoming a digital twin of the TradFi system.”

The split, Lutz called it a bifurcation, means U.S. crypto businesses will focus on domestic customers, and companies from the rest of the world will stay out of the country. BitMEX itself does not operate there, having pleaded guilty in July to violating the Bank Secrecy Act and failing to set up an adequate know-your-customer (KYC) and anti-money laundering (AML) program between 2015 and 2020. In 2022, co-founders Arthur Hayes, Benjamin Delo and Samuel Reed were fined a total of $30 million for violating money-laundering rules.

Instead, BitMEX is more prominently placed in Asia, said Lutz, who was previously a partner at PwC after spending time at Deutsche Boerse, the operator of Germany’s largest stock exchange.

The industry has been “begging for issue-specific legislation in the U.S. for years,” he said, though he’s not optimistic of the chances for crypto legislation moving through the Senate before November’s presidential election.

“Market institutions in Asia will take advantage of America’s confusion.”

Asia and India

Unlike the U.S. and European Union where almost everyone has access to the conventional banking system, Asia has the banked – family offices, accredited investors and wealthy corporates – alongside the so-called unbanked, who comprise more than half of the continent.

It’s that group that needs alternative services such as international remittances from family members working abroad to support relatives at home, a real use case.

“This is why you have a bifurcation of the markets. You serve completely different needs,” Lutz said.

According to Lutz, outside of the U.S., India will power the crypto industry in the next 10 years provided the companies are reasonably open and if policymakers understand that crypto “actually adds to their capability of maintaining” monetary policy independence.

Stablecoins Will Drive Institutional Adoption in Asia: Chainalysis CEO

In an interview, Michael Gronager also said it doesn’t matter who wins the U.S. presidential election.

SINGAPORE — Stablecoins will drive institutional adoption in Asia, “even if regulators are not happy with it,” Chainalysis co-founder and CEO Michael Gronager said in an interview at Token2049 in Singapore. Yet, while more users in the region have leaped into cryptocurrency than elsewhere, the U.S. is still the industry’s most influential geography.

Stablecoins, crypto tokens whose value is pegged to a real-world asset like the dollar or gold, underpin the crypto trading system. Also, because their value is fixed – or meant to be – they can be used as a store of value and a medium of exchange.

“One of the things we have seen as the biggest trends in crypto right now, and probably the killer app, is something as mundane as stablecoins,” he said. “Two-thirds of all transactions in transaction volume on blockchains are stablecoins.”

Chainalysis, a blockchain analytics company, regularly releases reports on the state of crypto and its adoption across the world. The most recent listed five Asian countries in the top 10 of the Global Adoption Index. India and Nigeria have kept the top two positions for two years in terms of grassroots crypto adoption, and Indonesia, a new No. 3, is the fastest growing.

“Last year, one or two banks in Japan said they wanted to launch a U.S. dollar-backed stablecoin within a year. It hasn’t happened yet,” Gronager said. “I had conversations last week in Japan and now we have 10 banks wanting to launch such stablecoins.

“Why hasn’t it happened yet? (Because) banks are slow. They talk to the regulator.”

Regulators definitely have “some level of concern” and many things will need to be ironed out, he said. In the meantime, banks have to face growing competition from stablecoins when it comes to remittances, according to Gronager.

While Asia appears to dominate in terms of adoption, the U.S. which ranks fourth in the Chainalysis report, is the most influential region because that’s where the trading volumes come from and the crypto economy looks to institutions like the U.S. Congress and Securities and Exchange Commission (SEC) for big signals.

“The real volume of crypto is tied to countries like the U.S. and others,” Gronager said. “The story we are trying to tell you is more like saying crypto users per capita. So basically, how many people using [crypto] within the country. The adoption is, like, who’s holding crypto for the average people in countries. In the U.S., that’s less than it is, for example, in India.”

Despite the regulatory influence and despite crypto influencers’ focus on the U.S. presidential candidates’ positions on the industry, the November election isn’t a big deal, Gronager said.

“It won’t matter much,” whether Donal Trump or Kamala Harris wins, Gronager predicted. “Just getting on the other side” of this election will be healthy for everyone.”

Utah Judge Rules SEC’s Case Against Alleged Crypto Mining Scam Green United Can Proceed to Trial

And no, she didn’t rule that crypto mining devices were securities.

The U.S. Securities and Exchange Commission’s (SEC) lawsuit against Green United can proceed to trial, a Utah judge ruled Monday.

Last March, the SEC accused the Utah-based operation of scamming investors out of $18 million by selling them phony crypto mining equipment via a multi-level marketing scheme in which the company’s affiliates received a portion of the proceeds from each of the $3,000 “Green Boxes” they sold.

According to the SEC’s complaint, investors were told that the so-called Green Boxes were specialized crypto miners that mined GREEN tokens on the Green Blockchain – which they allegedly claimed supported a “public global decentralized power grid” – and could generate 40% to 50% monthly returns. Investors never physically received their equipment, and were told that the machines would be remotely hosted at a Green United-controlled data center.

In reality, the Green Blockchain didn’t exist, but the Green Boxes did – sort of.

Green United’s founder, Will Thurston (who, along with promoter Kristoffer Krohn, is also named as a defendant in the lawsuit), allegedly used the money investors gave him for the phony Green Boxes and used it to buy S9 Antminers – commercially-available bitcoin mining machines – which he then used to mine bitcoin for himself. According to the SEC, investors didn’t see any of the actual bitcoin (BTC) their purchases mined, but instead received periodic distributions of worthless GREEN tokens created by Thurston on the Ethereum blockchain.

Though Green United’s lawyers attempted to have the case dismissed, U.S. District Court Judge Ann Marie McIff Allen ruled that the SEC has “sufficiently alleged a security in the form of Green Boxes” to allow the case to proceed to trial, as well as its allegations of fraud.

The ruling caused something of a stir in online crypto circles, with at least one large X account claiming (in a since-deleted post) that the “SEC says crypto mining devices are securities.”

“This is wrong. Remain calm,” responded Neeraj Agrawal, director of communications at crypto lobbying group Coin Center. “This has no bearing on managed crypto mining. It’s garden variety ‘cloud mining’ scamming.”

The judge’s Monday ruling makes no mention of the real S9 Antminers – or bitcoin – Green United was allegedly buying with investor funds.

Harris Says Her White House Will ‘Invest in America’s Future’ Which Includes ‘Digital Assets’

The Democratic nominee promises she’ll be a tech-friendly president in remarks to donors.

Vice President and Democratic nominee Kamala Harris made her first remarks on crypto before donors in New York City, according to a report from Bloomberg.

“To build that opportunity economy, I will bring together labor, small business, founders and innovators, and major companies. We will partner together to invest in America’s competitiveness, to invest in America’s future,” Bloomberg quoted Harris as saying. “We will encourage innovative technologies like AI and digital assets while protecting consumers and investors. We will create a safe business environment with consistent and transparent rules of the road.”

Uniswap Labs CEO Hayden Adams appeared to endorse Harris following her remarks.

“Yes, Biden has been bad for crypto, and actions will speak louder than words, but progress is progress; it needs to start somewhere and should be encouraged,” he wrote on X. “She is signaling her admin will approach it differently / be more pro-innovation.”

In April, Uniswap received a Wells Notice, a memo that the Securities and Exchange Commission is considering enforcement action.

Harris’ remarks come after Republican nominee Donald Trump purchased burgers with bitcoin (BTC) at a crypto-themed bar called PubKey in New York.

Trump and his family are also promoting a Decentralized Finance (DeFi) project called World Liberty Financial on the campaign trail. Trump recently appeared on Rug Radio, a crypto media platform, to promote the project and discuss crypto policy.

Recently, Anthony Scaramucci, founder and managing partner of SkyBridge Capital, who also had a brief tenure as White House communications director under then-President Donald Trump, said during Token 2049 in Singapore that he is working with the Harris campaign to develop crypto policy.

In July, Scaramucci said on CoinDeskTV that the Democrats made a “horrific mistake” on crypto crackdowns, and largely mishandled crypto policy.

Currently, Polymarket is giving Harris a 52-47% lead with over $980 million bet on the election.

Ether Leads Post-Fed Crypto Market Rally as Yen Weakness Sparks Risk-On Frenzy

From the U.S. dollar to cat-themed cryptos, global assets roar back following the FOMC’s bold move

On Sept. 18, the Federal Open Market Committee (FOMC) made a pivotal decision that significantly impacted risk-on assets. The Federal Reserve cut interest rates by 50 basis points, setting a new target range for the federal funds rate at 4.75% to 5.00%.

This move sparked debate, with some arguing that the Fed may have been late in the rate-cutting cycle, potentially signaling an impending recession. Historically, the last two times the Federal Reserve started with a 50 basis point rate cut were the 2001 and 2008 recessions, raising concerns that this current cut might signal similar economic challenges.

However, others suggest that the Federal Reserve may be navigating a “Goldilocks” period—where the economy grows sustainably. U.S. GDP growth for Q2 was a solid 3% on an annualized basis, and headline inflation has fallen to 2.5%, the lowest level since March 2021, reducing the need for real rates to remain this elevated (the real rate is the difference between the Fed’s target rate and the inflation rate). Furthermore, the Atlanta Fed’s GDPNow model predicts a Q3 GDP growth estimate of 2.9%, further supporting a balanced economic environment.

Impact on key macro assets

The development has been the significant rebound in the crypto market. Ether (ETH) surged nearly 14%, highlighting a resurgence of investor risk appetite. Within the cryptocurrency space, cat-themed meme coins have led the charge, emerging as some of the top performers with gains of 40% in just a week. Bitcoin (BTC) also saw a gain of over 5%, although its dominance in the crypto market dipped below 58%, signaling a broad-based rally across other digital assets.

Following the FOMC decision, several key macro assets have reacted positively. The U.S. Dollar Index (DXY) rose by 0.36%, pushing the index back above 101, a level widely regarded as vital. Meanwhile, the USD/JPY exchange rate, which had dropped to around 141 just before the Fed’s announcement, has since climbed to approximately 143.5. The weakening yen has further bolstered risk-on assets, including cryptocurrencies.

Crude oil prices have climbed over 2%, potentially influenced by ongoing geopolitical tensions in the Middle East. Gold, a traditional safe haven, also saw gains. Additionally, Nvidia (NVDA) shares increased by just under 2%, while the S&P 500 index (SPX) rose by over 1%, indicating that risk-on asset classes broadly welcomed the Fed’s decision.

Crypto ETFs see inflows

The buoyancy in the cryptocurrency market was further supported by inflows into both ether and bitcoin ETFs on Sept. 19 and 20. Ether-based ETFs recorded $8.1 million in inflows over these two days, while bitcoin ETFs saw much larger inflows of $250.3 million, according to Farside data.

Performance of market capitalization groups

When analyzing performance from a broader market perspective, it becomes clear that large, mid, and small-cap coins all faced underperformance in the lead-up to the FOMC decision.

However, coming out of the FOMC decision, small-cap cryptocurrencies have emerged as the biggest winners. Despite their early struggles, all three capitalization groups—large, mid, and small caps—have now made relative highs against bitcoin since the Fed’s announcement, reflecting a general increase in risk-on sentiment and liquidity across financial markets.

Market capitalization groups are typically defined as follows: large-cap stocks have a market capitalization greater than $1 billion, mid-caps fall between $100 million and $1 billion, and small caps range from $50 million to $100 million.

Looking ahead, the CME Fed Funds futures are evenly split, with a 50/50 probability of either a 25 or 50 basis point rate cut at the upcoming Nov. 7 FOMC meeting, scheduled just two days after the U.S. presidential election.