Trakx Weekly Update: January 29
Crypto Market Figures
CTIs Weekly Performance
Continued consolidation was very much the theme in crypto markets last week as evidenced by the 1.8% decline in the Trakx Top10 Crypto CTI. There was, however, quite marked divergence in the performance of the constituent tokens in the index. Avalanche (AVAX) and Solana (SOL) came out on top, rising 12% and 10% respectively, whereas bottom of the stack was Ethereum (ETH) – down 9% w/w. The best performing Trakx index last week was the ESG CTI, up 2%, while the weakest performer was the Meme CTI. It slipped around 6% over the past seven days.
Helping boost AVAX was the introduction of the Vryx scaling solution by Ava Labs. As mentioned in our 2024 outlook piece the quest for scalability is one of the key factors set to shape the industry as blockchains need to increase transactional bandwidth to accommodate rising crypto adoption. The approach taken by Ava Labs is to use Decoupled State Machine Replication (DSMR) pipelining which allows transactions to be disseminated, ordered and executed independently. As a result of this change, the network capacity should increase to 100,000 transactions per second (tps), substantially higher than the processing power of retail payment processing giants, Visa and Mastercard.
Solana, meanwhile, gained as the number of new Solana addresses exceeded 10 million this month – its highest monthly total since May 2022. In large part, this pick-up is due to the success of meme coins running on the Solana blockchain, particularly WEN, which is being airdropped to over one million users as part of a test of the network’s decentralized exchange aggregator, Jupiter.
The weakness seen in Ethereum, by contrast, came after the SEC announced its decision to delay spot ETF proposals filed by BlackRock and Grayscale citing the need to further consider the applications. The SEC now has an additional 45 day period (to March 10) before it needs to make a new public response. While it is possible that a decision is made by then, in total the SEC has a 240-day window before a final decision must be made, meaning that further delays are possible.
Finally, former US President Trump, who is campaigning for re-election in November, came out firmly against CDBCs warning they constitute a dangerous threat to freedom. Clearly, his hope it that such comments go down well with voters. He may well be right if a recent report by the UK Treasury and the Bank of England is any reflection of public opinion on the other side of the pond. One of the key findings of the report examining public views towards a British CBDC (dubbed Britcoin) is that “many respondents expressed concerns that a digital pound could encroach on their rights” and that legislation would be required to “guarantee both users’ privacy”. I guess they haven’t heard of cryptography or zero-knowledge proofs in Westminster.
Sources: Trakx, Coingecko, Alphavantage
- Avalanche (AVAX) Surges 10% After Team Unveils Scaling Solution: BeInCrypto.
- Spot Ether ETF Applications Decisions Delayed by SEC: CoinDesk.
- Hong Kong SFC receives first spot Bitcoin ETF application: Cointelegraph.
- Why embracing Bitcoin would be a low-risk, high-reward strategy for Trump: FortuneCrypto.
- UK moves to digital pound design phase amid ‘unprecedented’ 50,000-strong privacy debate: DLNews.
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.