Trakx Weekly Update: Digital Assets Recover After Conflict Sell-Off

Key Crypto Market Figures

CTIs Weekly Performance

Large-cap digital assets remained relatively stable over the past week, as indicated by a marginal -0.2% decline in our Top10 Crypto CTI index. For the second consecutive week, the Lending CTI led the sector, advancing another 9% and pushing its month-to-date return to a solid 18%. In stark contrast, the Interoperability CTI posted the weakest performance, falling by 9% over the same period.

Geopolitical Tensions Surge

A sharp rise in geopolitical tensions followed Israel’s unexpected launch of Operation Rising Lion, targeting Iran’s nuclear infrastructure. The operation triggered a surge in crude oil prices—up over 10%—as markets feared potential supply disruptions. Gold benefited from the uncertainty, rallying close to its recent all-time high. Cryptocurrencies, however, did not experience the same safe-haven inflows. Instead, the initial market reaction was a sharp decline of several percentage points. Interestingly, prices rebounded robustly in the days following the news, despite Iran’s aggressive retaliatory stance—more forceful than during its previous missile strikes against Israel. Investors may be drawing on recent history: digital assets dropped 9% in response to similar tensions last October but went on to gain more than 50% in the ensuing months.

GENIUS Act Moves Forward

In crypto-specific developments, the US Senate voted 68-30 last Wednesday to invoke cloture on the GENIUS Act, advancing the bill to a final vote where only a simple majority is required for passage. The legislation sets forth comprehensive regulations for stablecoin issuers, including:

• Acceptable categories of backing assets,
• Regulatory and compliance obligations,
• Mandatory federal charters for issuers with over $10 billion in circulation,
• Annual audits for those exceeding $50 billion.

Despite opposition from some Democrats—most notably crypto critics Senators Elizabeth Warren and Chuck Schumer—the bill is expected to pass in the Senate due to the Republican majority. Its fate in the House of Representatives remains less certain, particularly since the House has introduced its own stablecoin framework, the STABLE Act. As a result, it’s unclear whether President Trump will have a stablecoin bill to sign before August, as he has pledged, in pursuit of establishing the US as a global crypto leader.

US Inflation – A Modest Positive

US consumer price inflation rose to 2.4% year-over-year in May—slightly above April’s figure but still below economist forecasts, suggesting a limited impact from the new Trump-era tariffs. Following the release, President Trump reiterated his call for the Federal Reserve to cut interest rates by a full percentage point, arguing that doing so would significantly reduce federal debt servicing costs. However, such a move remains unlikely in the short term. Fed Chair Jerome Powell and the FOMC are expected to resist what may be seen as overt political interference, despite the ongoing debate about central bank independence. Furthermore, should Chinese President Xi Jinping ratify the recent US-China trade agreement—which includes 55% tariffs on Chinese exports—a new inflationary impulse may emerge, though its full impact is still unclear. Overall, the crypto market’s response to the inflation data was cautiously optimistic, with only modest price appreciation following the announcement

Sources: Trakx, Coingecko, Alphavantage

Market Trends

• Bitcoin closer to equities than gold as Middle East war deepens: Cointelegraph
• Senate Begins Passage of Stablecoin Bill as House Marks Market-Structure Wins: CoinDesk
• Bitcoin Climbs Slightly as US Reports Inflation Slowed in May: Decrypt
• XRP ETF approval odds slide 10% ahead of critical SEC and ETF deadlines next week: CryptoSlate
• Solana ETF filers pass ball to SEC to ‘iron out details’ on staking revisions: DLNews

Trakx News

• This week our CEO Lionel Rebibo and strategic advisor Michael Teryazos will be in Dubai and Abu Dhabi for a series of private meetings with fintech innovators, institutional players, and potential partners. If you’re building in crypto, we’d love to connect and work together to improve the future of crypto investing.

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.