Trakx Weekly Update: March 18

Weekly Update
• Mar 18, 2024
Trakx Weekly Update: March 18

Key Crypto Market Figures

Trakx Weekly Update: March 18

CTIs Weekly Performance

After a hectic few months, crypto markets took a pause last week as reflected in weekly returns being in single digit percentage changes for most of the Trakx CTIs. Our benchmark Top10 Crypto CTI returned 2.3% over the past seven days but the star performers were in ESG, Top10 PoS and RWA CTIs, which generated between 8-10%. At the other end of the spectrum, the Diversifier CTI was the weakest performer, declining in value by 7%, followed by the Top10 DeFi and Interoperability CTIs, which each slipped 6%.

The pause in the crypto rally was mainly due to the return of macro factors, which had taken a backseat recently due to the dominance of the FOMO effect and Meme-coin mania. Last week’s US consumer and producer price reports both came out on the hotter-side of expectations, which led to a growing sense that the continued disinflationary trend seen a necessary for the Fed to initiate its easing cycle may not be a strong as previously assumed. As a consequence, US cut expectations were further pared back – a risk we highlighted in the last couple of monthly updates – with just three rate cuts (a cumulative easing of 75bp) now priced for the remainder of the year. Having hit a new all-time high above $73,000, this shift in Fed sentiment triggered a liquidation cascade in Bitcoin that saw its price drop more than 10% before partially recovering.

Taking over the crypto bull reins last week was Solana. Its price gained by more than a third – a move that contributed to the rise in the value of the top two performing Trakx CTIs last week – ESG and Top10 PoS. Because of Solana’s architecture, its high performance and low fees have made it an attractive alternative blockchain to Ethereum for meme coin holders (BONK and Dogwifhat being two more the most popular Solana-based tokens). As a result, there has been a surge in transaction volumes, helping reverse the battering it received during the crypto winter due to Solana’s former association with SBF (Solana was dubbed a Sam Coin). Moreover, given Solana’s price has not yet hit a new all-time high this cycle, unlike other leading cryptocurrencies, there is a sense of it playing catch-up.

Although memecoin mania may not have boosted Ethereum's price as much as Solana’s, what it has done has driven up gas fees on the Ethereum blockchain. Indeed, average fees hit a two-year high earlier on this month. While positive from a supply perspective – ETH fees after burned after the introduction of EIP1559 – it is negative from a demand perspective because it provides an incentive for memecoin projects to utilize other blockchains. Ethereum’s response has been to introduce proto-danksharding via the Dencun upgrade that went live last week. This change should both greatly reduce Layer 2 transaction fees and boost Ethereum’s scalability making it a better fit for a world where crypto adoption continues to rise.

Trakx Weekly Update: March 18

Sources: Trakx, Coingecko, Alphavantage

Market Trends

  • Bitcoin Falls Back After Reaching Latest All-Time High Above $73,000: Forbes.
  • Why Solana is shaking the crypto market, up 40% for the week: Nairametrics.
  • Ethereum's Dencun Upgrade Goes Live, Promises Lower Fees and Enhanced Scalability: Bitcoin News.
  • Bitcoin SV Down 22% Since Court Ruled Craig Wright Isn’t Satoshi: Decrypt.
  • JPMorgan CEO Dimon joins Trump in Bitcoin shift. More critics will soften in ETF ‘afterglow’: DL News.

Trakx News

  • Don’t miss out! On Monday, March 25th, starting at 10am (CET time), Lionel will be participating in a panel organised by Wave Online for an engaging presentation on: “Crypto: back in the spotlight?“. Here is the link to register to the event.
  • We are also happy to announce that we’ve just launched 2 new CTIs:
    • Trakx Gaming CTI, that includes the top 10 gaming cryptocurrencies by market capitalization, each making up 10% of the index.
    • BTC Momentum that trades only long bitcoin positions between 0% and 100%, identifying trend breakouts and applying filters to mitigate weak trading signals.

Trakx CTIs Performance

Trakx Weekly Update: March 18

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.

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