Market vector indexes turned positive in July, but traders flocked to the most liquid assets

Most Market Vector indexes moved in a positive direction in July, though traders preferred the biggest and most liquid assets. The past month lifted all assets, though there was a divergence between retail and institutional-grade investments. 

Market Vector’s indexes showed July was a successful month for crypto, erasing most of the losses from the Q2 correction. However, the indexes pointed at a divergence between institutional-grade crypto and retail activity. Blue chip tokens, especially BTC and ETH, showed significant inflows from institutions, while retail Web3 activity moved sideways. 

The best proxy for retail activity was the memecoin index. Both established and newer meme tokens are often traded by whales, but they remain the territory of crypto insiders. 

Market Vector shows the leading indicators for both traditional finance and crypto, updating its indexes on a monthly basis as some tokens are excluded.

Memes and DeFi are recovering slowly

The meme token index by Market Vector rose from around 50 points at the beginning of the month to over 73 points. The index is still far from its peak in November 2024, when it reached 165 points. For the year to date, meme performance is still carrying a small overall loss. 

The DeFi index, tracking the top decentralized app assets, returned to levels not seen since February. The index expanded from around 20 points at the beginning of July, to over 31 points. However, the growth was more gradual compared to indexes linked to BTC or ETH. 

The smart contract index performed slightly better, as it tracked the top L1 platforms. The marker expanded based on its component of ETH and SOL, the leading smart contract platforms at the moment, climbing from 126 points to over 169 points. 

Crypto media and entertainment assets underperformed, with limited net change for the month. Overall, Web3 projects still show retail activity, but lag behind the performance of blue chip tokens. The infrastructure app index also moved sideways for the past month, with minimal recovery.

Blue chip indexes move near all-time highs

Indexes reflecting the performance of BTC and blue-chip tokens outperformed in July, with some moving to new all-time highs. 

As BTC peaked above $123,000, top crypto assets also drew in more liquidity. The chief narrative for top tokens was the creation of corporate treasuries, spreading to ETH, SOL, and BNB. Not all tokens were actually purchased, but even the announcements of new treasuries boosted the assets. 

The top 10 digital asset index moved to a new record at over 40,000 points, mostly based on Ethereum’s performance as the asset with the biggest weight. The index climbed from a baseline of 30,000 points at the beginning of the month. It changed one asset in the past month, but reflected the overall performance of ETH and SOL for the period. 

The Gold Crypto Leader Index showed the wider picture of a rush to inflation-proof assets. The index reached a five-year peak of 683 points, based on the outperformance of gold and top crypto assets. It’s up more than 100% in the past two years, and is significantly swayed by the performance of gold due to its 53% representation in the index calculation.