S&P 500 Announces Crypto Index, Institutional ETH Ownership Reaches New Heights, and Strategy Pauses Bitcoin Buys

Takeaways

• S&P Dow Jones Indices has announced it will launch S&P Digital Markets 50, a cross-asset index that will combine 15 cryptos with 35 public firms tied to the crypto sector: Dinari will also reportedly mint a token (or “dShare”) that will track the index onchain and make it accessible to crypto-native investors.
• Zcash jumps 339% over the past month: The price of privacy-focused token Zcash has more than tripled over the past month amid renewed institutional interest and growing buzz from crypto advocates.
• Strategy has paused its weekly bitcoin acquisitions despite bitcoin reaching new highs: The leader in corporate bitcoin treasuries reportedly holds 640,031 BTC, which it purchased for roughly $47.4 billion and is now worth roughly $79 billion.
• Institutions, treasury firms, and spot ETFs now hold more than 10% of all circulating ETH: Institutional treasuries now hold roughly 5.66 million ETH while spot ETH ETFs control roughly 6.81 million ETH, representing 12.47 million ETH combined.
• DeFi protocols took in around $600 million in fees over the course of September, marking a rebound in revenue fees: The sector reached a 12-month low of just $340 million in fee revenues in March, but has since rebounded in part due to major projects including Uniswap and AAVE.

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S&P Launches Crypto Benchmark Backed by Onchain Token

The benchmark, named the S&P Digital Markets 50, will reportedly pair 15 cryptocurrencies with 35 listed firms which are involved in the crypto ecosystems, with the scope including exchanges, custody solutions, and onchain protocols.

The launch will also involve US public equity tokenization firm Dinari issuing onchain “dShares,” which will track the index on blockchains and allow the benchmark to be used natively onchain. This component of the launch is significant, as it will likely allow more crypto-native investors to factor the index into trading strategies without leaving the crypto ecosystem. This alone could result in the index being widely utilized by the crypto sector.

The benchmark aims to provide diversified exposure to digital assets and broader access to tokens and protocols which otherwise might not be acknowledged by major institutions. The launch also signals a continuing trend of traditional finance recognizing the importance of digital assets to the global financial ecosystem and the need to provide reliable data and insights on its performance.

Zcash Price More Than Triples Amid Institutional Support

Over the past month, the price of ZEC has more than tripled, pushing the market cap to approximately $3.4 billion.

The rally comes after Grayscale began offering clients direct exposure to ZEC through Grayscale Zcash Trust. The token has also received a growing level of attention of late on X, with accounts touting it as the solution to bitcoin’s privacy problem because it offers encrypted transactions.

The notional value of outstanding futures contracts for Zcash hit $237 million on Thursday, signaling renewed retail demand for the token as traders go long on the price target to anticipate future gains. The ZEC rally came as the broader crypto ecosystem pulled back on Thursday, with bitcoin dipping below $120,000 and ETH dipping below $4,400.

Strategy Takes Pause In Bitcoin Acquisition Strategy After Slow Down

Currently, the company’s balance sheet shows holdings of 640,031 BTC which it acquired at a price roughly $74,000 per coin. Its balance now represents over 3% of bitcoin’s total circulating supply. Most recently, the firm disclosed a purchase of 196 BTC for $22 million dollars, and in its most recent quarterly filing, Strategy reported an unrealized gain of $3.89 billion on digital assets.

Analysts have posited that slowing the acquisition strategy may be due to its desire to shift to perpetual preferred-stock programs, as opposed to at-the-market sales of common stock for BTC purchases. At the time of writing, 185 public companies have bitcoin treasuries, with some of the largest holders including Marathon, Metaplanet and Twenty One Capital.

Institutions, Treasuries, and ETFs Now Hold Over 10% of Ether Supply

Treasury companies account for approximately 5.66 million ETH, while US spot ETFs hold roughly 6.81 million ETH. The milestone reflects the growing interest from institutional investors for ETH’s yield generating capabilities. ETH has also been seeing highly positive signals, logging a price increase of around 8% week-over-week.

October has recorded roughly $621 million in net inflows, up significantly so far from September’s net inflow of around $286 million. Major industry players have leaned into yield-generating treasuries, with SharpLink and Bitmine remaining some of the largest strategies. SharpLink in particular has had success with its ether strategy, reporting unrealized gains of over $900 million since it began its accumulation in June.

Uniswap, Aave Lead DeFi Fee Recovery With Sector Logging $600 Million Revenue in September

Over the past six months, the DeFi ecosystem has recorded a roughly 76% revenue increase. Popular DeFi platforms including Uniswap and Aave led the revenue rebound, logging $129 million and $99 million, respectively.

Trading and lending volumes for these platforms has built momentum, as retail investors move capital back into onchain products and services. It also comes as institutional investors continue to incorporate yield-generation and other DeFi activities into their portfolios, and make tokenomics a more important aspect of their investment strategies.

The sector itself is also undergoing a shift in its tokenomics philosophy. Other popular platforms and protocols such as Ethena and Maple are testing the viability of new deflationary practices, including more aggressive token buy-back programs. These techniques aim to add value to protocol tokens by more closely mimicking the tokenomics of bitcoin and reducing the need to rely on marketing and hype in order to increase prices.

-Team Gemini