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Greetings, advisors!
In this edition, Joshua de Vos and Jacob Joseph from CoinDesk Research analyze the significant recovery of digital assets in Q3, outperforming both stocks and gold.
Additionally, in the “Ask an Expert” segment, Kevin Tam provides insights into crypto perpetual contracts.
If you have three minutes, Mesh is conducting a 2026 State of Digital Money Survey to gather insights on how financial institutions and digital-asset businesses navigate regulatory complexities across different markets. Participation is anonymous, and results will be shared in this newsletter. (edited)
Enjoy your reading!
Digital Assets Break Losing Streak in Q3
In a remarkable turnaround, digital assets saw a resurgence in the third quarter of 2026, ending a three-quarter trend of losses and achieving their best performance of the year. According to CoinDesk’s recent Quarterly Review and Outlook, this recovery was influenced by a reduction in geopolitical tensions, improved liquidity conditions, and a resurgence of institutional investments.
Review of Q3
The CoinDesk 20 (CD20) index surged by 52.7%, reaching 2,447, while Bitcoin (BTC) increased by 42.7%, hitting $83,554. In contrast, the S&P 500 and Nasdaq recorded modest gains of 2.03% and 0.85%, respectively, and gold rose by 3.84%. Digital assets clearly outperformed these traditional assets.
Comparative Performance: BTC, Gold, S&P 500, Nasdaq, and CoinDesk 20 in Q3 2026
Several factors contributed to this recovery. Although tensions in the Middle East persisted, they eased compared to the previous quarter. Additionally, the U.S. Treasury's announcement of longer-dated bond buybacks in August revived the “debasement trade” narrative, likened by some to a form of “mini quantitative easing.” Greater regulatory clarity and the rapid rise of tokenized equities also positively influenced market sentiment, enhancing the integration of traditional finance with digital asset infrastructure.
ETF Flows: A Reversal
Bitcoin spot ETFs highlighted the renewed optimism in the industry during Q3. Following a net outflow of $4.67 billion in the second quarter, the third quarter saw a strong inflow of $6.36 billion, with $3.54 billion in August alone, marking the highest monthly total since July 2025, followed by $2.65 billion in September. This represents an $11 billion shift from the previous quarter. The previous quarter raised concerns about institutional exits, but the latest data indicates that institutions were merely waiting for favorable macro conditions.
Monthly ETF Net Flows: BTC, ETH, SOL, 2024 — Present
Highlights from Constituents
The CoinDesk 100 (CD100) increased by 53.3% to 1,890, while the CoinDesk Memecoin Index (CDMEME) grew 45.9% to 324. The CoinDesk 5 (CD5) gained 46.7% to 1,406, lagging behind the CD20 by six points. The CoinDesk 80 (CD80) led the multi-asset indices with a 57.4% increase to 559, outpacing Bitcoin by approximately 14.7 percentage points, with Zcash continuing its strong performance as interest in privacy assets grew.
Performance of CoinDesk 20 Constituents in Q3 2026
All constituents of the CD20 ended the quarter on a positive note, with Uniswap (UNI) leading at a 220% gain, followed by NEAR at 200%. Chainlink (LINK) and Aave (AAVE) saw increases of 100% and 87.5%, respectively. Twelve assets outperformed the index, including Cardano (ADA, 71.0%), Ether (ETH, 70.9%), Sui (SUI, 68.8%), Avalanche (AVAX, 67.5%), and Solana (SOL, 60.5%). Despite robust overall gains, a significant disparity emerged among the top performers.