ALTERNATIVE MARKETS OUTLOOK – END JULY 2024

​The US election campaign is moving fast. Trump is leading the polls, although the race is likely to be very close. After the assassination attempt on Trump, the Republicans moved their conference forward and declared Trump as their nominee with Vance as his vice-presidential candidate. Trump has been the clear Republican nominee since relatively early in the primaries, when he won most of the votes. On the Democratic side, things have also been complicated. Initially, Biden seemed to have the nomination wrapped up, but this was gradually called into question. Since the Biden-Trump televised debate, voices around Biden's state have grown louder, leading to Biden's decision to withdraw from the race and endorse Harris as the Democratic presidential nominee. Harris kicked off her candidacy with a strong speech. Although Harris does not yet have the Democratic nomination, it is likely that she will soon be announced as the official Democratic candidate. Her late entry into the race certainly complicates the situation, but the polls do not seem to have changed much from when Biden was the Democratic frontrunner. A more detailed comparison of the two candidates' agendas, along with more debates, will provide more details. Trump is currently leading, but the election will be close.
Meanwhile, equity markets have also been on the move. In recent weeks, equity markets have mostly fallen. Increasingly high valuations of technology companies led to concerns and triggered several sell-offs in recent days. This was exacerbated by poor financial results from Alphabet and Tesla. Since 10 July 2024, the Magnificent 7 have lost more than 10%, wiping out $1.7tn in value in a matter of weeks. Figure 1 shows the fall of the Magnificent 7 alongside other major US indices, which also fell, but by a much smaller amount. The results of Apple and Microsoft in the coming weeks will be crucial in determining whether the current slide can be halted or accelerated. The S&P 500 and Nasdaq also fell significantly, again largely driven by the Magnificent 7 and other tech-oriented companies in the indices. The Dow Jones managed to limit the fall significantly, as part of the recent decline has been a shift from riskier tech stocks to more quality oriented companies.

*|MC_PREVIEW_TEXT|*

RESEARCH PERSPECTIVE VOL. 232 July 2024 Alternative Markets Update The US election campaign is moving fast. Trump is leading the polls, although the race is likely to be very close. After the assassination attempt on Trump, the Republicans moved their conference forward and declared Trump as their nominee with Vance as his vice-presidential candidate. Trump has been the clear Republican nominee since relatively early in the primaries, when he won most of the votes. On the Democratic side, things have also been complicated. Initially, Biden seemed to have the nomination wrapped up, but this was gradually called into question. Since the Biden-Trump televised debate, voices around Biden's state have grown louder, leading to Biden's decision to withdraw from the race and endorse Harris as the Democratic presidential nominee. Harris kicked off her candidacy with a strong speech. Although Harris does not yet have the Democratic nomination, it is likely that she will soon be announced as the official Democratic candidate. Her late entry into the race certainly complicates the situation, but the polls do not seem to have changed much from when Biden was the Democratic frontrunner. A more detailed comparison of the two candidates' agendas, along with more debates, will provide more details. Trump is currently leading, but the election will be close. Meanwhile, equity markets have also been on the move. In recent weeks, equity markets have mostly fallen. Increasingly high valuations of technology companies led to concerns and triggered several sell-offs in recent days. This was exacerbated by poor financial results from Alphabet and Tesla. Since 10 July 2024, the Magnificent 7 have lost more than 10%, wiping out $1.7tn in value in a matter of weeks. Figure 1 shows the fall of the Magnificent 7 alongside other major US indices, which also fell, but by a much smaller amount. The results of Apple and Microsoft in the coming weeks will be crucial in determining whether the current slide can be halted or accelerated. The S&P 500 and Nasdaq also fell significantly, again largely driven by the Magnificent 7 and other tech-oriented companies in the indices. The Dow Jones managed to limit the fall significantly, as part of the recent decline has been a shift from riskier tech stocks to more quality oriented companies. Figure 1: Indexed Performance of the Magnificent 7, the Dow Jones Industrial Average, the S&P 500 Index, and the Nasdaq Composite Index Since the Beginning of 2024, Sources: Roundhill Mag7 ETF, Standard & Poor’s, Nasdaq, Investing, July 2024 Institutional adoption in the cryptocurrency space continues to grow. Following the recent approval of the spot ETH ETF at the end of May 2024, the ETFs started trading on 23 July 2024. Although the global trading volume of the ETFs exceeded $1 billion on the first trading day, the price of ETH remained very stable between $3,400 and $3,500. The total volume and assets managed for the newly launched ETFs is shown in Figure 2. At the time of writing, ETH has fallen to $3,200, slightly below the level at which the spot ETFs were launched. This is common as crypto prices typically fall after such an event. This happened both times the Spot Bitcoin and Spot Ethereum ETFs were approved, as shown in Figure 3. Despite the slight decline in Ethereum, Bitcoin remains relatively high at $67k and the cryptocurrency market capitalisation is close to $2.5tn, a level that has not been exceeded often this year. Interestingly, the current crypto bull market was sparked by the approval of the January 2024 BTC spot ETF, and despite the recent approval of the new ETH spot ETF, Bitcoin is still significantly outperforming Ethereum. For 2024, BTC is up 60% compared to 44% for ETH. Circling back to the US election, the cryptocurrency market has not found much support from the US government in the past. With Trump speaking at the Bitcoin Conference 2024 in the past few days and suggesting a strategic Bitcoin reserve, implies support strong support for cryptocurrencies. Thus, a Republican victory is positive for the cryptocurrency space, while a Democratic victory would likely have a negative impact on the asset class. For the US, it is important to stay on top of this development, as the country has for internet companies. As shown in Figure 4, the US is the dominant player in internet companies and severely lacks behind in the crypto space. Figure 2: Total Volume, Flows, and Assets of Ethereum ETFs, Source: Bloomberg, July 2024 Figure 3: Cryptocurrency Market Capitalization and Performance of Bitcoin (BTC) and Ethereum (ETH) Since July 2023, Source: CoinMarketCap, July 2024 Figure 4: US Presence Comparison in Internet and Blockchain Companies, Source: Pantera Capital, July 2024 STONE MOUNTAIN CAPITAL Stone Mountain Capital is an advisory boutique established in 2012 and headquartered in London with offices Pfaeffikon in Switzerland, Dubai and Umm Al Quwain in United Arab Emirates. We are advising 30+ best in class single hedge fund and multi-strategy managers across equity, credit, and tactical trading (global macro, CTAs and volatility). In private assets, we advise 10+ sponsors and general partners across private equity, venture capital, private credit, real estate, capital relief trades (CRT) by structuring funding vehicles, rating advisory and private placements. As of 2nd February 2024, Stone Mountain Capital has total alternative Assets under Advisory (AuA) of US$ 62.4 billion. US$ 48.5 billion is mandated in hedge funds and US$ 13.9 billion in private assets and corporate finance (private equity, venture capital, private debt, real estate, fintech). Stone Mountain Capital has arranged new capital commitments of US$ 1.95 billion across more than 25 hedge fund, private asset and corporate finance mandates and has been awarded over 90 industry awards for research, structuring and placement of alternative investments. As a socially responsible group, Stone Mountain Capital is a signatory to the UN Principles for Responsible Investing (PRI). Stone Mountain Capital applies Socially Responsible Investment (SRI) filters to all off its alternative investment strategies and general partners on behalf of investors.    Our Team   Our Mandates   Our Research   Our News     Contact We are able to source any specific alternative investment search and maintain relationships with dozens of best-in-class hedge fund managers, private equity and private debt general partners (GPs) and real estate and infrastructure developers. We don’t pass any costs on to our investors, since our compensation comes from our mandated managers, GPs and developers. Please contact us, should you require further information about our solutions.   Schedule a call with the team Main UK Tel.: +44 207 268 4905 Main Switzerland Tel.: +41 44 586 45 55 Main UAE Tel.: +971 4383 5386 We have updated our privacy policy to take into account the new requirements of the GDPR. Please take some time to read the policy, which explains what personal data we collect, why we collect it, how we use it and other relevant information. You can review our privacy policy here, our anti-bribery policy here and our commitment to the UK stewardship code here. Stone Mountain Capital LTD is registered (Reference: ZA589246) in the data protection public register of the Information Commissioner's Office ('ICO') in the United Kingdom. No action is required if you wish to remain in contact, however please reply if you want your details removed by contacting us at [email protected] or by using the unsubscribe button below. In case this newsletter has been forwarded to you and you want to subscribe, please click here. Stone Mountain Capital is a limited company (LTD) registered in England & Wales with registered number 8763463. The registered address is: One Mayfair Place, Devonshire House, Mayfair, London W1J 8AJ, England, United Kingdom. Stone Mountain Capital LTD is authorised and regulated with FRN: 929802 by the Financial Conduct Authority (‘FCA’) in the United Kingdom. Stone Mountain Capital LTD is the Distributor of foreign collective investment schemes distributed to qualified investors in Switzerland. Certain of those foreign collective investment schemes are represented by First Independent Fund Services LTD, which is authorised and regulated by the Swiss Financial Market Supervisory Authority (‘FINMA') as Swiss Representative of foreign collective investment schemes pursuant to Art 13 para 2 let. h in the Federal Act on Collective Investment Schemes (CISA). Stone Mountain Capital LTD conducts securities related activities in the U.S. pursuant to a Securities and Exchange Commission ('SEC') Rule 15a-6 Agreement with Crito Capital LLC, a U.S. SEC registered broker-dealer, and member of Financial Industry Regulatory Authority (‘FINRA’), Securities Investor Protection Corporation (‘SIPC’) and Municipal Securities Rulemaking Board (‘MSRB').  Stone Mountain Capital Partners LLP is incorporated as limited liability partnership in England & Wales with company registration number: OC430515. Its registered office is: One Mayfair Place, Devonshire House, Mayfair, London W1J 8AJ, United Kingdom. Stone Mountain Capital Partners LLP is registered as Appointed Representative with FRN: 934964 of Stone Mountain Capital LTD which is authorised and regulated with FRN: 929802 by the Financial Conduct Authority (‘FCA’) in the United Kingdom.  Stone Mountain Capital Ventures LLP is incorporated as limited liability partnership in England & Wales with company registration number: OC439509. Its registered office is: Devonshire House, ​One Mayfair Place, Mayfair, London W1J 8AJ, United Kingdom. Stone Mountain Capital Ventures LLP is incorporated as Appointed Representative with FRN: 967914 of Stone Mountain Capital LTD which is authorized and regulated with FRN: 929802 by the Financial Conduct Authority (‘FCA’) in the United Kingdom. Stone Mountain Capital FZC is registered as Free Zone Company (FZC), a limited liability company in United Arab Emirates (UAE) at: Atrium Tower, Office AT-101, 1st Floor, One UAQ, P.O. Box: 7073, UAQ Free Trade Zone, Umm Al Quwain, United Arab Emirates with company registration number: 6813. Stone Mountain Capital FZC (DMCC Branch) is registered as branch of Stone Mountain Capital FZC and investment company at: Almas Tower, Level 54, Office 5431, P.O. Box: 112911, Jumeirah Lake Towers (JLT), Dubai Multi Commodities Centre (DMCC) Free Zone, Dubai, United Arab Emirates with company registration number DMCC-912005. All information in this perspective including research is classified as minor acceptable non-monetary benefits ('MNMB') in accordance with article 11(5)(a) of the MiFID Delegated Directive (EU) 2017/593 and FCA COBS 2.3A.19. For United Arab Emirates (excluding Dubai International Financial Centre (’DIFC’) and Abu Dhabi Global Market (’ADGM‘)) residents only. This website, any document, and the information contained herein, does not constitute, and is not intended to constitute, a public offer of securities in the United Arab Emirates (’UAE‘) and accordingly should not be construed as such. Securities are only being offered to a limited number of exempt investors in the UAE who fall under one of the following categories of Exempt Qualified Investors: (1) an investor which is able to manage its investments on its own (unless such person wishes to be classified as a retail investor), namely: (a) the federal government, local governments, and governmental entities, institutions and authorities, or companies wholly-owned by any such entities; (b) foreign governments, their respective entities, institutions and authorities or companies wholly owned by any such entities; (c) international entities and organisations; (d) entities licensed by the Securities and Commodities Authority (the ’SCA‘) or a regulatory authority that is an ordinary or associate member of the International Organisation of Securities Commissions (a “Counterpart Authority”); or (e) any legal person that meets, as at the date of its most recent financial statements, at least two of the following conditions: (i) it has a total assets or balance sheet of AED 75 million; (ii) it has a net annual turnover of AED 150 million; (iii) it has total equity or paid-up capital of AED 7 million; or (2) a natural person licensed by the SCA or a Counterpart Authority to carry out any of the functions related to financial activities or services, (each an “Exempt Qualified Investor”). The Securities have not been approved by or licensed or registered with the UAE Central Bank, the SCA, the Dubai Financial Services Authority (’DFSA‘), the Financial Services Regulatory Authority (’FSRA’) or any other relevant licensing authorities or governmental agencies in the UAE (the ‘Authorities‘). The Authorities assume no liability for any investment made as an Exempt Qualified Investor. This website, any documents and securities are for the use of Exempt Qualified Investors only and should not be given or shown to any other person (other than employees, agents or consultants in connection with a named addressee's consideration thereof). Stone Mountain Capital FZC is registered as Free Zone Company (FZC), a limited liability company in United Arab Emirates (UAE) at: Atrium Tower, Office AT-101, 1st Floor, One UAQ, P.O. Box: 7073, UAQ Free Trade Zone, Umm Al Quwain, United Arab Emirates with company registration number: 6813. Stone Mountain Capital FZC (DMCC Branch) is registered as branch of Stone Mountain Capital FZC and investment company at: Almas Tower, Level 54, Office 5431, P.O. Box: 112911, Jumeirah Lake Towers (JLT), Dubai Multi Commodities Centre (DMCC) Free Zone, Dubai, United Arab Emirates with company registration number DMCC-912005. Copyright © 2024 Stone Mountain Capital LTD. All rights reserved. Any business communication, sent by or on behalf of Stone Mountain Capital LTD or one of its affiliated firms or other entities (together "Stone Mountain"), is confidential and may be privileged or otherwise protected. This e-mail message is for information purposes only, it is not a recommendation, advice, offer or solicitation to buy or sell a product or service nor an official confirmation of any transaction. It is directed at persons who are professionals and is not intended for retail customer use. This e-mail message and any attachments are for the sole use of the intended recipient(s). Our LTD accepts no liability for the content of this email, or for the consequences of any actions taken on the basis of the information provided, unless that information is subsequently confirmed in writing. Any views or opinions presented in this email are solely those of the author and do not necessarily represent those of the limited company. Any unauthorised review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please notify the sender by reply e-mail and destroy all copies of the original message and any attachments. By replying to this e-mail, you consent to Stone Mountain monitoring the content of any e-mails you send to or receive from Stone Mountain. Stone Mountain is not liable for any opinions expressed by the sender where this is a non-business e-mail. Emails are not secure and cannot be guaranteed to be error free. Anyone who communicates with us by email is taken to accept these risks. This message is subject to our terms at our Disclaimer.