Trakx Weekly Update: April 21

Key Crypto Market Figures

CTIs Weekly Performance

After the recent tariff-related fireworks digital asset markets calmed down over the prior week as evidenced by our benchmark large cap Top10 Crypto CTI gaining 0.4%. The best performer over the prior seven day period was the NFT Metaverse CTI, which gained 10.6%, closely followed by the AI CTI, up just over 8%. Meanwhile, at the other end of the performance stack was the Cardano Ecosystem CTI, which slipped just shy of 3% last week.

Fed Up(date)

Speaking at the Economic Club of Chicago Fed Chair Powell made his first public comments since Trump announced his 90-day moratorium on trade tariffs. Despite describing the tariff plan as constituting a “fundamental change” whose full effects remained unclear, he said financial markets were “functioning well” notwithstanding the obvious spike in volatility. He also noted that as the tariffs were “significantly larger than anticipated” inflation and unemployment could get pushed further away from the Fed’s goal for the remainder of the year, potentially creating a challenging scenario where the dual-mandate goals are in tension. Overall, Powell’s comments signaled that the FOMC is in no rush to resume the easing cycle, a less dovish outcome than the market had been expecting, which was responsible for a mid-week wobble in crypto prices.

Powell Under Pressure

However, by the end of the week the Fed’s policy intransigence actually turned into a bullish development for crypto because it triggered President Trump into criticizing Powell on social media saying his termination as Fed Chair can’t come “soon enough”. Additionally, National Economic Council Director Kevin Hassett indicated that the White House were examining ways in which Powell could be removed before his term comes to an end in May next year. Threatening the Fed’s monetary policy independence in such a blatant manner prompted a rush out of the US dollar and into gold and crypto as investors assumed that if Trump succeeds US and therefore global liquidity conditions will become much more accommodative, a positive development for limited supply assets.

Crypto Goes Mainstream

Finally, and also bullish for crypto, was Powell’s acknowledgement that digital assets were becoming more mainstream in the US with both Congress and the Senate looking to establish a legal framework for stablecoins, a crypto product that could – in his words – have fairly wide appeal. In addition, he confirmed that the conservative approach towards digital assets adopted by the previous Biden administration would be loosened in a way that permits and fosters innovation in the crypto industry – a very welcome change to the US regulatory environment

Sources: Trakx, Coingecko, Alphavantage

Market Trends

• Bitcoin Rally Short-Circuited as Fed Chair Powell Raises Stagflation Fear: CoinDesk
• Trump studying whether to fire Fed Chair Powell, adviser says: Reuters
• Fed’s Powell reasserts support for stablecoin legislation: Cointelegraph
• Vitalik Buterin floats swapping Ethereum’s EVM for RISC-V to boost scalability: TheBlock
• Major crypto exchanges suffer complications after AWS outage: Protos
• Crypto hardware wallets using ESP32 chip at risk of private key theft: report: Crypto.news

​Trakx News

Lionel will hold a webinar for CGPs on Monday April 28 at 11am CET to discuss the rapidly evolving crypto-asset market and how to successfully integrate crypto into wealth management. For more details, please contact us at [email protected]

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.