Trakx Weekly Update: Hot US Inflation Hits Crypto

Key Crypto Market Figures

CTIs Weekly Performance

Digital asset markets were unable to sustain their bullish momentum over the past week as evidenced by the 6.5% drop in our flagship large cap Top10 Crypto CTI. Such was the breadth of the sell-off across the token landscape that even the best performer, Bitcoin Control15 CTI, generated a negative return after falling 2%. The worst performers, however, with negative weekly returns exceeding 17%, were the DePin and Recovery CTIs. One of the factors that contributed to the bearish tilt was poor US inflation data (see next section).

US Inflation Comes In Hot

Last Friday, Kevin Warsh became the new Fed Chair, replacing Powell who, rather than exit stage left as is customary, has decided to remain on the board in order to resist the political pressure being exerted on the Fed by the Trump administration. The personnel change comes at an awkward moment for central bankers, not only in the US but globally, as the economic fallout from the Iran war is beginning to appear in official macroeconomic data.

The clearest example came from the US consumer price report for April, published last Tuesday. Headline inflation rose to 3.8% year-on-year, up 0.5 percentage points from the previous month and marking a four-year high. As expected, higher gasoline and grocery prices contributed to the increase. Notably though, core CPI — which excludes these more volatile components — also surprised to the upside, coming in at 2.8% year-on-year. Hence, on both measures inflation is running materially above the Fed’s 2% target with more coming down the pipe judged by the surge in April producer prices (also published last week). Against this backdrop, the Fed’s latest dot plot — which projected two 25bp rate cuts as the baseline scenario — already appears outdated. Instead, US monetary policy likely needs to shift in a more hawkish direction. While that is not ideal for digital asset markets, there is at least some cushion from the fact that US short-term interest rate futures have already begun pricing in the Fed’s next move as a hike rather than a cut. As a result, markets may be less vulnerable if the Fed under its new leadership proves less dovish than investors initially expected.

Clarity Comes To Crypto

More constructively, the CLARITY Act received sufficient bipartisan support to pass through the US Senate Banking Committee last Thursday by a 15–9 vote. This marks one of the most significant regulatory developments for the cryptocurrency industry in years, bringing the US materially closer to establishing a formal legal framework for digital assets. The bill seeks to clarify when cryptocurrencies should be treated as securities under SEC oversight versus commodities regulated by the CFTC — a long-standing source of uncertainty that has discouraged institutional participation and innovation across the sector.

Digital asset markets reacted positively to the news. Bitcoin rose above $81,500 following the committee approval, gaining more than 2% over a 24-hour period. Ethereum and XRP also rallied amid expectations that the legislation could accelerate institutional inflows and create a more stable operating environment for crypto firms in the US. Crypto-related equities also surged. Coinbase shares jumped more than 7%, while several crypto infrastructure companies posted double-digit gains on hopes that a comprehensive US regulatory framework could help digital assets mature into a more mainstream component of the global financial system.

AI Tokenization Fail

Finally, OpenAI and Anthropic both issued strong warnings regarding unauthorized transactions involving their private equity last week. In particular, the companies targeted tokenized shares and SPV-based investment structures, which have become increasingly popular among investors seeking exposure to leading AI firms that remain privately held and therefore difficult to access through traditional markets.

OpenAI stated that any transfer of its equity requires explicit company approval, with the restriction applying not only to direct stock sales but also to indirect structures such as SPVs, derivative contracts, and tokenized representations of OpenAI shares. The company warned that unauthorized transactions would be considered void, potentially leaving investors holding assets with “no economic value.” Anthropic issued a similarly forceful warning, stating that unauthorized transfers of its stock “will not be recognized on our books and records”. The company also explicitly identified several platforms and intermediaries that it said were not authorized to facilitate trading in Anthropic shares.

The announcements triggered a sharp sell-off in tokenized AI equity products. PreStocks’ ANTHROPIC token fell more than 30% amid concern that the exposure offered by such instruments may not represent legally enforceable ownership rights in the underlying companies.

Sources: Trakx, Coingecko, Alphavantage

Market Trends

• Hot inflation data pours cold water on Federal Reserve rate cut hopes: CoinDesk
• Bitcoin only has one path through 2026 because massive oil price contagion just spread to 8 major economies: CryptoSlate
• Crypto Stocks Surge As Senate Committee Advances Long-Stalled CLARITY Act: Forbes
• Anthropic’s non-existent blockchain shares are tripping up investors: Protos
• Bitcoin Owner Claims Claude AI Cracked Lost Wallet Password, Netting $400K in BTC: Decrypt
• Ethereum community launches security feature to end blind signing: Cointelegraph

Trakx CTIs Performance

Sources: Coingecko and AlphaVantage

*Return of bitcoin is calculated since 01/05/2020, while CTIs performances were calculated since their respective launch date.
**Includes simulated performance.
***The risk signal is determined according to the historical volatility level, the higher the riskier.

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Disclaimers: No Investment Advice. Index returns and statistics are for illustration only. Index returns do not reflect any transaction costs or expenses. Past performance does not guarantee future results. The information provided in this newsletter does not constitute investment advice, financial advice, trading advice, or any other sort of advice and you should not treat any of the newsletter content as such. Trakx.io does not recommend that any cryptocurrency should be bought, sold, or held by you. Readers shall conduct their own due diligence and consult their financial advisors before making any investment decisions.