Crypto Markets Outperform Traditional Equities Amid Elevated Interest Rates

Following the recent rate hike, cryptocurrency markets have outperformed traditional equity indexes. However, elevated interest rates remain a significant constraint on cross-asset allocation.

In the week of September 12 to 18, major cryptocurrencies BTC and ETH gained 4.83% and 3.84%, respectively, while SOL jumped by 9.96%. The S&P 500 declined by 0.08% during this period. Meanwhile, the U.S. Dollar Index rose 1.11%, and the 10-year U.S. Treasury yield closed at approximately 4.998%.

This contradictory market behavior is attributed to coexisting risk appetite and elevated discount rates. Investors need to consider not only returns on assets but also on-chain liquidity and collateral efficiency when allocating resources. In this scenario, tokenized equities have seen significant growth despite the overall RWA market facing pressure.

Tokenized equities reached $3.056 billion as of September 18, a notable increase of 6.03% from the previous week. Distributed Asset Value across RWAs stood at $38.503 billion, down 1.13% week over week. This growth in tokenized equities suggests that capital is reallocating within RWA segments rather than expanding the entire market.