Trakx Weekly Update: A Profit-taking Pause

Key Crypto Market Figures

CTIs Weekly Performance

Digital asset prices retreated over the past week, with our flagship Top10 Crypto CTI slipping just under 5%. The weakness was broad-based: even the best performer, the typically defensive Inflation Hedge CTI, recorded a modest decline of 1%. Unsurprisingly, the higher-beta Meme CTI brought up the rear in weekly performance, shedding nearly 16%.

Tariff Turbulence

As outlined in our just-published Crypto Monthly (see below), the easing of global trade tensions in recent weeks has been a key driver of crypto asset performance. This perhaps explains the muted market reaction to last week’s news that a US federal trade court blocked the administration’s tariffs. The court ruled that imposing such measures requires congressional approval, and that President Trump overstepped his authority by invoking an emergency law. The decision makes it more difficult—though not impossible, due to potential legal workarounds—for the administration to implement new tariffs.

Fed Holds Steady

Regardless of the court ruling, the minutes from the Fed’s May meeting (released Wednesday) revealed that US central bankers remain concerned about the economic risks of Trump’s tariff proposals. Beyond inflationary pressures, Chair Powell and his FOMC colleagues flagged potential threats to financial market stability—especially in light of recent volatility in US government bonds. For the Fed, safeguarding financial stability takes precedence above all else, even over price stability. As a result, they are maintaining a cautious, wait-and-see policy stance. This diminishes the likelihood of any near-term, liquidity-boosting rate cuts. While this may weigh on digital assets in the short term, longer-term fiscal trends continue to support the case for alternative stores of value.

Unsustainable and Unstoppable

Elon Musk’s departure from the Trump administration was confirmed last Friday. Under his tenure, the Department of Government Efficiency (DOGE) succeeded in delivering $160 billion in spending reductions—an impressive figure, yet well short of his ambitious initial $2 trillion target, and a mere drop in the ocean compared to the $6.7 trillion federal budget. Even Musk, with his reputation for delivering the impossible, could not bring the US fiscal deficit under control and if he can’t succeed, it’s hard to imagine who can.

With federal debt at more than $36 trillion (120% of GDP) and Trump’s “big, beautiful tax bill” nearing implementation after clearing the House, such perceptions suggest an increasingly bleak US fiscal outlook. Indeed, the trajectory is not just unsustainable—it’s apparently unstoppable. Such conditions are precisely those that tend to ignite (a) sovereign debt crises and (b) heightened demand for non-fiat, alternative stores of value—whether it be crypto for the digital-native generation or gold for those who prefer to hedge in the analogue realm.

Expect this narrative to gain traction in the weeks ahead, offering a potential catalyst for a rebound in digital asset prices from their recent soft patch.

Sources: Trakx, Coingecko, Alphavantage

Market Trends

• Bitcoin Wobbles as US Trade Court Strikes Down Trump’s Tariffs: Decrypt
• Bitcoin price slips as Fed minutes flag US inflation risks: YahooFinance
• Elon Musk Bids Adieu During Final Days as Special Government Employee at DOGE: Decrypt
• Trump’s crypto czar David Sacks outlines pathway to expand US Strategic Bitcoin Reserve: TheBlock
• Ethereum co-founder responds to Sweden’s cashless-society rethink: Cointelegraph
• Sui network votes to hack the hacker who drained $220m from Cetus: DLNews

Trakx News

• Ryan Shea published the May crypto update Tariff Truce examining how digital asset prices responded to the easing in global trade tensions.

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.