Trakx Weekly Update: A Strong Uptober Start

Key Crypto Market Figures

CTIs Weekly Performance

Uptober is living up to its name, kicking off with strong gains across our CTIs. Our flagship Top10 Crypto CTI led the way with an 8% rally over the past week. The higher beta Meme CTI was the top performer, gaining 14%, while the Recovery CTI trailed but still managed to end slightly in the green. Overall, the start of October has reinforced positive momentum across the digital asset landscape.

Crypto Shrugs off Shutdown Concerns

In another prediction win for the online betting platforms, the US government shutdown last week – a move that will impede the US regulatory push for digital assets. According to the SEC, during the shutdown its skeleton staff will neither review nor approve registration statements or issue notices of effectiveness. The good news though, if the prediction markets continue their winning streak, is that the shutdown, which is already in its fifth day, will only last 11 days – significantly shorter than the previous 35 day long shutdown – meaning disruption should not be too widespread. Certainly, last week’s bullish price action, which saw Bitcoin hit new all time highs above $125,000, suggests crypto investors are not unduly concerned about the political stand-off.

More Fed Easing Likely

One of the first casualties of the shutdown was the September US non-farm payroll report, after its publication was delayed last Friday. Historically, this is one of the most significant economic indicators for investors to gauge the overall healthy of the US economy, but has added importance at the moment because the Fed cited softness in the labour market as a key factor in deciding to restart is rate cutting cycle last month. While waiting for the official government report, investors have relied on alternative private indicators of the US employment trends, such as the ADP survey. It showed private companies cut 32,000 jobs last month, the third consecutive monthly decline, indicating that the labour market likely remained soft. As a consequence, the market implied probability of a follow-up 25bp rate cut at the October 29 FOMC meeting rose to above 95%, maintaining a highly supportive monetary backdrop for digital assets.

Euro CBDC A Step Closer

While not known as a fan of privately-issued cryptocurrencies, the European Central Bank last week took a step closer towards issuing a public version (CBDC) after it selected providers for five digital euro components and services ranging from fraud and risk management, app design and offline payment functionality. The press release announcing the decision made clear that at this stage the agreements would involve no payments, and the decision whether to progress or not with a digital euro will only follow the adoption of the Digital Euro Regulation, which remains under debate. That said, with the Trump administration pushing USD-backed stablecoins through the GENIUS Act (passed in July) and long-standing European concerns over reliance on Visa and Mastercard, the incentive to move forward is strong as it would strengthen the region’s sovereignty over payments infrastructure and reduce dependence on private or foreign systems.

Sources: Trakx, Coingecko, Alphavantage

Market Trends

• Bitcoin hits new all-time high, crosses $125,000 for the first time as ‘Uptober’ momentum builds: The Block
• Prediction markets see government shutdown lasting nearly two weeks: CNBC
• With the US government dark, alternate sources show a sluggish September for jobs: Reuters
• European Central Bank advances digital euro, selects service providers: Cryptoslate
• Swedish Lawmakers Propose National Bitcoin Reserve: Decrypt

Trakx News

• Ryan Shea published the October Crypto Update discussing the recent divergence between gold and crypto – a move that has prompted some investors to question whether the “digital gold” analogy still holds.
• Trakx also published a new blog post about KnightMB, a billionaire Bitcoin Pioneer whose life was certainly colourful.

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.

Trakx is a global fintech company creating new standards for digital asset investments. Through our trading platform, we offer thematic Crypto Tradable Indices (CTIs) and customised solutions, providing sophisticated investors with a high degree of compliance, custody and liquidity.

TRAKX SAS,  10 rue de Penthièvre, Paris, 75008, FRANCE – French société par actions simplifiée Paris Trade and Companies Register number 850 626 078

Crypto Asset Service Provider (CASP) Registered with the Autorité des Marchés Financiers (AMF) under number E2021-020

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.