Trakx Weekly Update: Fault Lines and Resilience

Key Crypto Market Figures

CTIs Weekly Performance

Digital asset markets posted a strong recovery over the past seven days, highlighted by a 4.4% gain in our flagship large cap Top10 Crypto CTI. The standout performer was the Gaming CTI, which rallied 13.5%, underscoring renewed risk appetite across higher-beta segments of the market. Even the typically defensive Inflation Hedge CTI finished in positive territory, rising 0.4%, a sign of the broad-based nature of the rally.

TACO Tuesday Part II

Digital assets continued to outperform traditional markets as investors weighed an extended Iran ceasefire against persistent energy supply disruption and growing recession risk. For the second time in as many weeks, President Trump “TACOed,” extending the ceasefire with Iran last Tuesday. Unlike the previous ceasefire, which was due to expire the following day, the current truce has no formal deadline, allowing time, as Trump put it, for Iran’s fractured leadership to submit a unified peace proposal. Despite the extension, the Strait of Hormuz remains subject to a US blockade — a red line for Tehran — and within hours of the announcement Iran attacked three container ships transiting the waterway. As a result, crude oil flows remain severely constrained.

Since the start of hostilities, the world has experienced a cumulative loss of more than half a billion barrels of crude supply. With an estimated shortfall of 20 million barrels for every day the Strait remains effectively closed, global inventories of crude and distillates are rapidly tightening, a situation worsened by a series of suspicious refinery accidents. This has increased the risk of a supply-shock-driven global recession. These concerns tempered the bullish response in traditional assets to the ceasefire extension, but in keeping with the trend seen since the start of the conflict, digital assets proved more resilient, with major tokens gaining roughly 3% over the period.

Arbitrum Freeze

On April 18, Kelp DAO — a liquid restaking protocol on Ethereum and Layer 2 networks — suffered the largest DeFi exploit of the year. Attackers, widely believed to be North Korea’s Lazarus Group, forged cross-chain messages to exploit a vulnerability in the rsETH bridge infrastructure, allowing them to mint roughly 116,500 unbacked rsETH, or around 18% of supply. The estimated $292–294 million loss quickly spilled beyond the protocol itself. Because the fake tokens were used as collateral on lending platforms, primarily Aave V3, the exploit triggered significant contagion across DeFi markets. The resulting confidence shock contributed to a $13 billion decline in DeFi total value locked (TVL) and prompted emergency freezes across several protocols.

Among the most controversial responses was Arbitrum’s Security Council decision last week to freeze approximately 30,766 ETH. The move exposed a core tension within crypto: balancing practical security interventions needed to protect the broader ecosystem against the foundational principles of permissionlessness and immutability. For many investors, the episode was a reminder that decentralization often exists on a spectrum rather than as an absolute.

Quantum Breaks 15-bit Elliptic Curve Key

The debate around the long-term security of blockchain networks reignited last week on the back of a significant quantum breakthrough. Independent researcher Giancarlo Lelli used a publicly accessible quantum computer to derive a 15-bit elliptic curve key in what Project Eleven — a post-quantum security startup that awarded him 1 BTC through its bounty programme — described as the largest quantum attack yet demonstrated against elliptic curve cryptography. While a 15-bit key is trivial compared with the 256-bit cryptography securing Bitcoin and Ethereum, the significance lies in its proof-of-concept value, confirming incremental progress in applying quantum techniques to problems once viewed as largely theoretical.

For Bitcoin and Ethereum, the eventual vulnerability would arise not from existing balances being suddenly compromised, but from sufficiently powerful future quantum machines deriving private keys from exposed public keys, threatening certain address types and transaction models. This is particularly relevant for older Bitcoin addresses where public keys have already been revealed on-chain, and for Ethereum accounts where public keys are more routinely exposed. This is not an existential threat today; rather, it is yet another warning on the need to accelerate work on post-quantum upgrades across major blockchains.

Sources: Trakx, Coingecko, Alphavantage

Market Trends

• Bitcoin Surges Past $78,000 as Trump Extends US-Iran Ceasefire: Bitcoin.com
• Arbitrum Security Council Freezes $71.5M in Ethereum Linked to $292M KelpDAO Exploit: Decrypt
• Researcher breaks 15-bit elliptic curve key in ‘largest quantum attack,’ wins 1 bitcoin bounty from Project Eleven: The Block
• US Government Runs a Bitcoin Node, Admiral Says, But Is Not Mining BTC: Yahoo
• Strategy overtakes BlackRock IBIT in bitcoin holdings after bear market buying: CoinDesk
• US soldier charged over $400K Polymarket bet on Maduro’s capture: Cointelegraph
• Official TRUMP token price in free fall amid White House shooting incident after memecoin gala: CryptoSlate

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.