Trakx Weekly Update: March 17

Key Crypto Market Figures

CTIs Weekly Performance

Digit asset prices continue to swing around but after the prior week’s violent gyrations last week seemed relatively calm by comparison. Indeed, over the past seven days our flagship Top10 Crypto CTI moved by only 0.5%. Even the best and worst performers were limited to single digit percentage point returns. At the top of the pile, was the Meme CTI, with a 5.7% weekly gain, while the worst performance last week was in the Bitcoin-Ether CTI, which slipped 2%.

US Inflation: Good And Bad

One factor impacting crypto prices was the release of the February US consumer price report. On the headline measure, inflation slowed by slightly more than expected to 2.8% y/y – two-tenths lower than the previous month – with a similar pace of decline witnessed in the less volatile core measure. Given inflation has been stubbornly above the Fed’s 2% goal for several months, the latest data constituted a welcome development and provided a short-term fillip to crypto prices. However, optimism that an improving inflation picture might encourage the Fed to cut interest rates sooner than expected were swiftly dampened by renewed tariff threats from President Trump. As we pointed out in the latest Trakx monthly, such trade policies can stoke inflation – a point reiterated last week by Black Rock boss Larry Fink. With investors near-unanimous in expecting Chair Powell and his Fed colleagues to keep the target Funds rate unchanged at this week’s FOMC meeting, most attention will be on the post-meeting press conference in the hope of gaining some insight as to how the US central bank intends to respond to these conflicting macro trends.

Bitcoin SuperPower

While the short-term headwinds negatively impacting crypto prices may be putting off some investors, there is no evidence of capitulation from the diamond handed MicroStrategy President Michael Saylor. Not only did he last week announce plans to raise $21 billion through a stock sale to further increase the company’s Bitcoin holdings (already 500,000 BTC), he also gave a speech at the Bitcoin Policy Institute strongly advocating for expanding the newly established US Strategic Bitcoin Reserve. Interestingly, he not only views the seminal cryptocurrency as the cornerstone of the new digital age, one populated by AI agents who are un-bankable in a fiat money environment, but he also embraced the geopolitical-digital defense narrative promoted by Jason Lowry – a Major in the US Space Force – in his book SoftWar (a book that, it is far to say, has divided the crypto community).

French Scepticism

Finally, European politicians and policymakers have historically adopted a sceptical approach when it comes to crypto. Unlike the US, where this has been a distinct shift in attitude under the Trump administration, there is no sign of a shift this side of the pond. Indeed, in an interview last week French central bank Governor (and ECB board member) François Villeroy, warned that “By encouraging cryptocurrencies and non-bank finance, the US administration is sowing the seeds of future [financial] upheavals”. Such comments may be a little disappointing to EU-based crypto fans, but it is important to recognize that as a digital asset crypto is no respecter of geographic borders. It is global not regional trends that drive crypto and, as such, lack of support by the political class in Europe does not constitute a serious impediment to mainstream adoption.

Sources: Trakx, Coingecko, Alphavantage

Market Trends

• Inflation Relief as U.S. CPI Dips to Less Than Forecast 2.8% in February: CoinDesk
• BlackRock CEO Fink says nationalistic US policies to stoke inflation: Reuters
• Michael Saylor says US needs Bitcoin to continue as military superpower aligning with SoftWar theory: CryptoSlate
• Bank of Korea to take ‘cautious approach’ to Bitcoin reserve: CoinTelegraph
• Trump’s crypto embrace ‘sowing the seeds’ of a financial crisis, says Bank of France chief: DLNews
• Ripple and SEC Near Resolution in 4-Year Lawsuit Over $125 Million XRP Sales Penalty: YahooFinance

Trakx News

• We launched the 1st Governance vote on the inclusion of TRKX in certain CTIs.
• The IFA team will meet you in Montpellier, on March 27. Contact [email protected] for more details.
• Lionel and the IFA team will be in Paris, for the Next Gen Patrimoine Conference, on March 28.

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.