Trakx Weekly Update: Geopolitics, Macro, and Quantum Risks Collide

Key Crypto Market Figures

CTIs Weekly Performance

Digital assets prices were broadly unchanged over the past week as evidenced by the 1.9% gain in our flagship large cap Top10 Crypto CTI. Performance across sectors was mixed. Our Real World Asset (RWA) CTI led the market, rising 6% on continued institutional interest, while our Gaming CTI lagged, falling 3% over the same seven day period. Overall, the dispersion highlights a market lacking a clear directional catalyst.

Geopolitics Still The Dominant Driver

The primary reason for digital asset prices remaining range bound was investor attention is still being dominated by the ebb and flow of geopolitical tensions in the Middle East, following President Trump’s ultimatum to Iran regarding the Strait of Hormuz. A time-bound demand to reopen this critical oil transit route triggered a prolonged cycle of uncertainty, where extended deadlines clashed with increasingly aggressive rhetoric (including a post from the Trump that contained some very unpresidential language). This cloud of uncertainty made it difficult for digital asset prices to establish clear direction.

There was a modest improvement in investor sentiment over the weekend amid media reports suggesting preliminary US–Iran ceasefire discussions. Proposals reportedly included a potential 45-day pause in hostilities, raising hopes of a pathway toward a more permanent resolution to what has now become a six-week conflict. However, the relief proved limited as, ahead of Tuesday’s deadline, Trump reiterated his hardline stance warning that failure to open the strait to commercial shipping would result in targeted strikes on Iran’s power plants, bridges, and broader civilian infrastructure. This is an outcome Iran has previously warned would result in retaliatory strikes targeting energy infrastructure, oil facilities, and military bases across the Gulf region: a very market-unfriendly outcome.

Solid US Jobs Report

While macro fundamentals have largely taken a back seat to news flow related to the Iran war over the past month or so, the influential US non-farm payroll report did have a discernible market impact. In March the US economy added 178,000 jobs, rebounding from February’s revised decline and beating forecasts of around 60,000. As a result, the unemployment rate fell to 4.3%. This was a much stronger than expected performance and suggested the US jobs market was more robust than previous payroll reports had indicated. As such, the data reduced expectations for near-term Fed interest rate cuts, pushing back the odds of any easing at the April FOMC meeting and lowering the probability of cuts through mid-2026. The repricing toward “higher for longer” Fed policy provided a modest boost to US bond yields and firmed the US dollar, creating a modest headwind for risk assets including digital currencies. Attention this week will turn to another key US macro release, the March CPI report which is expected to show a further uptick in the annual rate of inflation both on the headline and core measures as the impact of higher energy prices begins to feed through.

Quantum Threat Escalation

A Google-linked study renewed attention to the growing risk that advanced quantum computing could compromise blockchain security, suggesting that sufficiently powerful quantum systems might theoretically break the cryptographic protections of a Bitcoin wallet in under nine minutes. Although such capabilities are not yet operational at scale, meaning there is no immediate threat to Bitcoin, the findings reignited discussions about the urgency of adopting quantum-resistant encryption standards across major blockchains.

Unfortunately for digital cryptocurrencies that derive much of their value from network effects and decentralization, these very strengths also increase vulnerability to the quantum threat. Large, decentralized chains like Bitcoin and Ethereum have no single decision-maker that can mandate rapid upgrades to quantum-resistant cryptography, making coordinated migration slow and difficult. In contrast, smaller or more centralized blockchains have been able to move faster on this front. For example, Circle’s quantum-resistant roadmap for its Layer-1 blockchain Arc lays out post-quantum wallets and signatures at launch, showing how a controlled governance model can adopt quantum-proof features early. Similarly, Algorand’s native work on post-quantum cryptography – including Falcon digital signatures, state proofs, and key rotation – helped push its token sharply higher as investors rewarded networks that are making tangible progress towards reducing exposure to future quantum attacks.

Sources: Trakx, Coingecko, Alphavantage

Market Trends

• Bitcoin Hits Weekly High Over $69K on US-Iran Ceasefire Hopes as Oil Slides: Decrypt
• U.S. March jobs smash expectations, with 178,000 added: CoinDesk
• Crypto networks ‘must wake up’ after Google exposes nightmare nine-minute Bitcoin break-in scenario: DLNews
• Circle unveils quantum-resistant roadmap for its layer-1 blockchain Arc: Cointelegraph
• IMF warns tokenized finance could amplify market crises, urges central bank-anchored settlement: The Block
• US Senator asks if Binance lied to Congress about Iran: Protos

Trakx News

• Ryan Shea published his Monthly Update examining how the evolving Iran conflict is impacting digital asset prices near-term and the longer run implications.

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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