Trakx Weekly Update: December 16

Key Crypto Market Figures

CTIs Weekly Performance

Another solid week in the green for market leader Bitcoin, as it pushed to a new all-time high above the psychologically-important $100,000 mark. Importantly, its gains helped limit the impact losses in Solana, Tron and Dogecoin had on our the Top10 Crypto CTI. As a result, our benchmark CTI slipped only 1.8% over the past seven days. By contrast, the top performer was the Lending CTI, gaining 4.3%. Meanwhile, bottom of the performance stack was the Meme CTI. It lost 16% last week but that still leaves it the top performing CTI year-to-date up 311%!

Quantum Computing

A small shiver went down the spine of some crypto investors last week after Google revealed its new quantum super computer, Willow, could perform a computational task that existing supercomputers would take trillions of years to compute in just five minutes. Obviously, for assets reliant on hash functions to cryptographically secure private keys and hence protect ownership, such a huge step up in computational power is somewhat disturbing. The good news, however, is that researchers at the University of Sussex calculated that to crack Bitcoin’s encryption in a single day it would require 13M qubits (quantum bits, which unlike traditional bits can be both 0 and 1 simultaneously due to superposition) compared to the 105 qubits used by Willow. So, Satoshi’s invention remains safe for now. In the future though, if compute power continues to grow exponentially it may require a hard fork to switch to a quantum-resistant cryptographic algorithm. History suggests such dramatic code changes are contentious in the Bitcoin community (to say the least), but faced with an existential threat we doubt even the most ardent ossification-loving maxi would object to such a protocol change.

Government Debt Crisis

Speaking at the MENA Bitcoin conference in Abu Dhabi last week Ray Dalio, founder of Bridgewater the world’s largest hedge fund, stated that given the rise in government debt in all the major economies bar Germany it was “impossible” for them to “not to have a debt crisis in the years ahead”. For reasons we have pointed out in a numerous research notes, this inevitably means a loss of purchasing power for fiat money, and this is the basis for Dalio saying he would invest in “hard money” like gold or Bitcoin.

Fed Rate Cut

Staying with macro policy, this week sees the last FOMC meeting of 2024. Against a backdrop of stable US CPI inflation and a slight cooling in the labour market, not to mention the recent interest rate cuts by other leading central banks – the ECB, SNB and the BoC all lowered their benchmark interest rates last week – investors are pretty much uniform in expecting a 25bp cut. Such a move, would take the target Fed Funds rate 100bp below the cycle peak and, even if fully anticipated, it provides a timely reminder to investors how much more supportive the monetary landscape is for digital assets compared with the two prior years.

Sources: Trakx, Coingecko, Alphavantage

Market Trends

• Bitcoin goes ’Santa Claus mode’ as optimism grows for US reserve status: Cointelegraph
• How Google’s quantum computing leap puts Satoshi’s $107bn Bitcoin stash at risk: DLNews
• Ray Dalio Says He’d Rather Have ‘Hard Money Like Gold and Bitcoin’ Amid ’Pending Debt Money Problem’: Report: DailyHodl
• Bitcoin deserves to be $870k with gold parity according to former Binance CEO Changpeng Zhao: CryptoSlate
• Less than 1% of Microsoft Shareholders Voted in Favor of Investing in Bitcoin: Decrypt

Trakx News

• This will be the last weekly Trakx newsletter of 2024 so we would like to take this opportunity to thank all our clients and TRKX token holders for their continued support in what has been an eventful and successful year for crypto. We look forward to continuing our journey together in 2025 – a year that looks like it is shaping up to be another stellar one for digital asset prices. Until then, let us wish you all a very happy holiday season.

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.

Trakx is a global fintech company creating new standards for digital asset investments. Through our trading platform, we offer thematic Crypto Tradable Indices (CTIs) and customised solutions, providing sophisticated investors with a high degree of compliance, custody and liquidity.

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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.