ALTERNATIVE MARKETS UPDATE – END MAY 2024

​Cryptocurrencies started very promising in 2024, with the approval of the first spot Bitcoin ETFs on 10th January. In anticipation of a possible approval, Bitcoin started to surge in December 2023, which also led to price increases for other cryptocurrencies. Shortly after the approval, the much-anticipated Bitcoin Halving further boosted the ecosystem with a particularly strong performance in March 2024. The Bitcoin Halving took place in mid-April, leading to a slight dip in the market. Historically, this is a common occurrence, with most of the gains occurring ahead of the event, followed by a period of “selling the news” or profit taking, leading to slight declines. In addition, several ETF providers also applied for approval of spot Ether ETFs following the approval of Bitcoin ETFs. Until mid-May 2024, the chances of approval were almost unanimously seen as close to zero. However, when the SEC set a deadline for the decision, the view on a potential approval quickly changed. A few days later, the SEC released a statement confirming the approval of spot Ether ETFs on 23rd May 2024. Figure 1 shows the price of Ethereum from 2023 to the present and its performance since then. Most of Ethereum's gains this year have come from the very strong February and March, with another significant spike when the SEC released the statement on the ETF approval deadline. At the time of writing, ETH is trading at $3.8k with a market capitalisation of $463bn.

*|MC_PREVIEW_TEXT|*

RESEARCH PERSPECTIVE VOL. 228 May 2024 Alternative Markets Update Cryptocurrencies started very promising in 2024, with the approval of the first spot Bitcoin ETFs on 10th January. In anticipation of a possible approval, Bitcoin started to surge in December 2023, which also led to price increases for other cryptocurrencies. Shortly after the approval, the much-anticipated Bitcoin Halving further boosted the ecosystem with a particularly strong performance in March 2024. The Bitcoin Halving took place in mid-April, leading to a slight dip in the market. Historically, this is a common occurrence, with most of the gains occurring ahead of the event, followed by a period of “selling the news” or profit taking, leading to slight declines. In addition, several ETF providers also applied for approval of spot Ether ETFs following the approval of Bitcoin ETFs. Until mid-May 2024, the chances of approval were almost unanimously seen as close to zero. However, when the SEC set a deadline for the decision, the view on a potential approval quickly changed. A few days later, the SEC released a statement confirming the approval of spot Ether ETFs on 23rd May 2024. Figure 1 shows the price of Ethereum from 2023 to the present and its performance since then. Most of Ethereum's gains this year have come from the very strong February and March, with another significant spike when the SEC released the statement on the ETF approval deadline. At the time of writing, ETH is trading at $3.8k with a market capitalisation of $463bn. Figure 1: Ethereum Price Development Since 2023 and Ether Spot Approval Date, Source: CoinMarketCap, May 2024 Commodities have also seen strong price rises recently. Gold has been prominently featured in the news recently, as the commodity continues to hit new record highs. At the time of writing, gold is trading at $2,359 per ounce, just below its record high of $2,426, set on 20th May 2024. Prior to March 2024, gold traded at around $2,000 per ounce for several months. Since Covid-19, gold has reached a record high (at the time) of just over $2,000 per ounce, and until March 2024, it occasionally reached similar heights, but rarely for a long time. It was not until March 2024 that the commodity began to rise significantly in value. However, the exact reason for this recent surge is somewhat unclear, as the economic ecosystem and the geopolitical situation have been experiencing heightened uncertainty for some time. Most likely, central bank demand for gold has led the current rally, as Eastern central banks have accumulated a lot of gold over the years. Western central banks have also started to increase their gold holdings, which is likely to have led to supply shortages. Figure 2 shows the indexed performance of gold, silver, and copper from 2023 to the present. Silver's performance has been similar to gold's. While gold has maintained a relatively high value recently, this has not been the case for silver, which has gained all of its value since March 2024 and is close to gold's performance since the beginning of 2023. Silver is currently trading at $32 an ounce, but is still a long way from its previous record high of $46 in 2011. After reaching its record in 2011, its value gradually fell to around $13 per ounce in 2015, where it remained until the initial impact of Covid-19. The commodity then traded relatively steadily between $21 and $25 until mid-2022. In addition to a general push towards commodities as a hedge against economic and geopolitical uncertainty, silver also benefited from increased industrial use, a weakening US dollar and supply constraints. Lastly, copper has followed a similar trajectory to silver in recent months. While copper prices have been flat since the beginning of 2023, the commodity has risen by around 30% since March 2024, recouping the loss of around 20% it suffered last year. Currently, copper is trading at $4.87 per ounce, just below its previous record high of $5.06 on 21 May 2024. In the long term, demand for copper is likely to continue to rise. Not only is it a key component in electric vehicles, but it is also highly relevant to renewable energy, such as wind turbines and solar panels. While electric vehicles are currently struggling, demand for renewable energy will increase significantly with ambitious climate targets for 2050. China, the largest consumer of copper, has issued 1 trillion yuan of bonds to finance infrastructure projects, which has been a key driver of the recent rally. Increased demand combined with supply shortages should lead to significant potential price increases. Supply shortages have emerged as major mines have closed and others have struggled with ore grades. Figure 2: Indexed Gold, Silver, and Copper Performance Since January 2023 to May 2024, Sources: Wisdomtree ETFs & Yahoo Finance, May 2024 STONE MOUNTAIN CAPITAL Stone Mountain Capital is an advisory boutique established in 2012 and headquartered in London with offices Pfaeffikon in Switzerland, Dubai and Umm Al Quwain in United Arab Emirates. We are advising 30+ best in class single hedge fund and multi-strategy managers across equity, credit, and tactical trading (global macro, CTAs and volatility). In private assets, we advise 10+ sponsors and general partners across private equity, venture capital, private credit, real estate, capital relief trades (CRT) by structuring funding vehicles, rating advisory and private placements. As of 2nd February 2024, Stone Mountain Capital has total alternative Assets under Advisory (AuA) of US$ 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.