Trakx Weekly Update: August 12

Key Crypto Market Figures

CTIs Weekly Performance

After a torrid start, crypto markets settled down as the week progressed allowing prices to regain a sizeable chunk of their early losses as highlighted by the 1.5% drop in the Trakx Top10 Crypto CTI. The best performer over the prior seven day period was the Centralized Exchange CTI, which gained 2%, while the laggard in terms of performance was the Lending CTI, with an 8% weekly decline.

Helping to calm things down, both in crypto and tradfi asset markets, was a statement by deputy governor of the Bank of Japan, Shinichi Uchida, that the central bank would refrain from hiking interest rates at times of market instability. The comment came after their 25bp hike a week earlier – their first interest rate rise in over 17 years – triggered fears of a potential unwind of the yen-carry trade which, combined with less positive US macro data and rising geopolitical tension in the middle east, led to a wave of risk aversion that negatively impacted the price of all risk assets, crypto included.

Amongst the constituents of the Trakx Top10 Crypto CTI, one of the strongest price gains occurred in XRP. Its price rallied almost 20% after a US federal judge ruled that Ripple’s programmatic sales of XRP to retail clients did not constitute a violation of securities laws as claimed by the SEC. Even though the judge imposed a $125 million fine in relation to institutional client transactions this was considerably smaller than the $2bn in remedies sought by the SEC, a potential outcome of the lawsuit filed in 2020 that has weighed on XRP ever since.

Less positively, the US Federal Reserve mandated that Customers Bank – a crypto-friendly US financial institution whose clients include Coinbase, Circle and Galaxy Digital – must enhance its oversight, risk management and compliance within 60 days after the US central bank identified significant deficiencies during a recent inspection. In addition, the enforcement agreement says Customers Bank must also inform the Fed 30-day prior to engaging in of “any new strategic initiation, product, service or relationship with third parties related to the digital asset strategy”, an obligation that crypto industry leaders have dubbed the continuation of Operation Chokepoint 2.0.

Sources: Trakx, Coingecko, Alphavantage

Market Trends

• Bank of Japan buoys Bitcoin price rally with signal on rates: DlNews
• Judge ends Ripple, SEC lawsuit with $125 million fine, XRP surges 18%: CryptoSlate
• Crypto-Friendly Bank Ordered by Fed to Limit Risks From Digital Asset Clients: CoinDesk
• Tether Slams Celsius Lawsuit as a ‘Shakedown,’ Vows to Fight Claims in Court: Decrypt
• Crypto user fat fingers $90K fee for a $2K ETH transfer: CoinTelegraph

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.