Trakx Weekly Update:Crypto Weathers Geopolitical Storm

Key Crypto Market Figures

CTIs Weekly Performance

Digital assets experienced a roller-coaster ride last week. The asset class was buffeted by heightened geopolitical tensions, which triggered a wave of risk-off behaviour, as well as disappointing macroeconomic news (see below). As a result, our flagship large-cap Top10 Crypto CTI registered a modest decline of just over 1%. Performance across the crypto market was highly varied. The best performer over the preceding seven-day period was the AI Agents CTI, which recorded a strong gain of more than 15%. By contrast, the typically higher-beta Meme CTI dropped by almost 10%.

Short Covering Rally

The midweek rally in crypto prices came amid growing speculation that the conflict with Iran may not be the short, decisive regime-changing strike many initially expected. As that view shifted — and with the Strait of Hormuz effectively closed — crude oil and natural gas prices surged, global equity markets sold off, and the US dollar strengthened. This represented a classic “risk-off” reaction in tradfi markets.

Under normal circumstances, such a backdrop would weigh heavily on digital assets. This time, however, crypto moved in the opposite direction. After significantly underperforming over the past month, sentiment had become deeply depressed — reflected in a single-digit reading on the Fear and Greed Index. Positioning had therefore become heavily skewed to the downside. In that environment, the “pain trade” was higher. According to Glassnode, more than $500 million in short positions were liquidated during the move, amplifying the rebound.

There was also a more fundamental tailwind. After four consecutive months of outflows — totalling nearly $9 billion from Bitcoin ETFs — flows turned positive last week. Net purchases over the past seven days were around $800 million. That marks a remarkable performance for an asset still trading more than 50% below its all-time high. It is particularly notable given that the average realised price for Bitcoin ETF holders is around $79,000, meaning most remain underwater.

Big Miss On US Jobs

Understandably, given what was happening in the Middle East last week, geopolitics — rather than economics — was the main focus for both tradfi and crypto investors. Nevertheless, last Friday delivered a sizeable macro shock. The February US non-farm payroll report showed a major miss in the pace of job creation. Instead of the expected gain of 70,000 jobs, the US economy recorded a decline of 92,000. In addition to the weak headline figure, the prior two months were revised down by a combined 69,000 jobs. This paints a picture of a US labour market that has lost positive momentum.

Such a substantial miss in the jobs report — one of the most influential releases in the US macro calendar — would typically be expected to trigger a significant repricing of US interest rates as investors anticipate more easing from the Fed. However, the surge in crude oil prices has complicated the outlook. Oil jumped over $100 per barrel after reports over the weekend that Iran had named Mojtaba Khamanei — the second son of the former Supreme Leader — as his successor, a choice President Trump had previously described as “unacceptable”. As a result, the near term US monetary outlook is far from clear. The likely inflationary impact of the recently announced 15% tariffs — introduced only a couple of weeks ago (though it already feels much longer) — further complicates the picture. Given such, increased tension in the Fed’s dual mandate of full employment and low inflation, US central bankers are likely to proceed more cautiously.

Kraken Secures Fed Master Account

Turning to crypto specific news, last week marked a landmark development in the integration of digital assets with tradfi: Kraken’s banking arm, Kraken Financial, was granted a limited-purpose “master account”, becoming the first crypto-native company to gain direct access to the US central bank’s core payment infrastructure. This approval, which has an initial term of one year, allows Kraken to move funds on the same interbank payment rails — including Fedwire — that thousands of banks and credit unions use, bypassing intermediary banks and enabling faster, more efficient fiat transfers for institutional clients and professional traders. While the account does not confer all the privileges of a full commercial bank — such as earning interest on reserves or having access to central bank liquidity in periods of financial stress — it nevertheless represents a historic step toward mainstream adoption and deeper institutional integration for the crypto industry.

Sources: Trakx, Coingecko, Alphavantage

Market Trends

• AI Agents Pick Bitcoin Over US Dollar As Best Form of Money, According To Crypto Think Tank: Dailyhodl
• Bitcoin ETFs Shed $228M, But Longer-Term Flows Stabilize: Decrypt
• 161,000 US jobs just disappeared after a revision as Bitcoin navigates increasingly messy macro data: CryptoSlate
• Oil pulls back from 25% spike as G7 discusses emergency reserve release: CoinDesk
• Banks Respond to Kraken’s Federal Reserve Access as Trump Sides with Crypto: YahooFinance
• Polymarket removes nuclear detonation market after backlash: The Block
• Crypto exchanges gain as tokenized commodity market climbs to $7.7B: Cointelegraph

Trakx News

• Important announcement: We have recently identified fraudulent websites impersonating Trakx appearing in search engines and online listings. These domains attempt to misuse the Trakx brand to mislead users searching for our platform. The only official Trakx website is: https://trakx.io. Any other domain claiming to represent Trakx – including trakx.live – is not affiliated with Trakx and should be treated as potentially malicious – click here for further details.

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.