Trakx Weekly Update: August 28, 2023

Key Crypto Market Figures

CTIs Weekly Performance

After the preceding week’s Fed-induced slump, calm returned to the crypto market as evidenced by the Trakx Top10 Crypto CTI dipping 1% over the past seven days. The best performing CTI was again the Trakx Inflation Hedge whose value increased by 0.5%, while the weakest performer was the Dex CTI, which saw a weekly decline of 5.1%.

For much of the past week crypto investors were in cautious mood ahead of Chair Powell’s speech at the annual Jackson Hole economic symposium, a venue where Fed officials typically provide guidance on the longer-term direction of US monetary policy. Despite signalling that additional rate hikes may be required as inflation “remains too high”, the impact on crypto prices was mute, a sign that additional Fed tightening is fully priced in.

While crypto prices were relatively stable, the same cannot be said of Bitcoin mining power. Last week the hash rate, which ensures the security of the Bitcoin blockchain, hit a record high of more than 414 EH/s - an 80% increase over the past 12 months. As a result of more hash power being brought on line, Bitcoin’s mining difficulty – an adjustment that ensures block times remain close to the 10 minute target - also rose to a fresh record high. This decoupling between hash power and Bitcoin’s price is certainly noteworthy as once would naturally expect the two to move in tandem.

Some speculate that this could be due to Bitcoin miners front-running the next halving event (roughly seven months away), when the block subsidy earned by miners will be cut to 3.125 BTC. However, it could also reflect different players entering the Bitcoin mining space. Last week, Oman announced a new crypto mining centre was being launched as part of the country’s plan to digitize the economy to reduce the Gulf State’s reliance on oil revenues. At present Exahertz – the government supported miner - only has 11MW of capacity but the plan is to ramp this up to 800MW backed by a $1.1bn budget. If realized, this would make Oman a serious player in the crypto mining space.

Finally, the meme coin Pepe, whose surge back in May attracted considerable attention, nosedived last week after 60% of the 26 trillion multi-sign tokens were sent to exchanges to be sold. According to one of the remaining founders of the project, the culprits were three team members who acted in bad faith. Even though these (now ex) team members are no longer associated with the project and have no control over the remaining 10 trillion multi-sign Pepe tokens, the partial rug-pull clearly damaged the community’s confidence in this much-hyped meme coin.

Sources: Trakx, Coingecko, Alphavantage

Market Trends

• Bitcoin revenue per terahash nears record lows as hashrate soars: Cointelegraph.
• Oman’s Bold Bitcoin Play: $1.1 Billion Investment On Bitcoin Mining Infrastructure: Forbes.
• Weird PEPE Transfers Spook Crypto Investors and Prompt Meme Coin's 15% Plunge: Coindesk.
• Trump NFTs sales volume skyrocket by 3,700% following mug shot release: Cryptoslate.
• USDC launching on Polygon PoS, Base and Polkadot blockchains: TheBlock.

Trakx News

• Matthieu Le Berre, Trakx's CTO, attended the Surfin’ Bitcoin conference in Biarritz.

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.