Trakx Weekly Update: October 2

Key Crypto Market Figures

CTIs Weekly Performance

After a decidedly lacklustre September, crypto markets celebrated the arrival of October – a month which has tended to be display positive seasonal effects, hence its Uptober nickname - with surging prices as evidenced by the Trakx Top10 Crypto CTI gaining 8%. Every one of the Trakx CTIs were positive over the past seven days, but the standout performer was the Lending CTI, gaining 16%. The weakest performer was the Inflation Hedge CTI (+0.3%), an index that is more defensive in nature and which tends to outperform during consolidation phases.

Driving the surge in the Lending CTI were MKR and AAVE, whose tokens both gained around 30%. The continued rally in MakerDAO’s governing token is attributable to the strong revenue generation of the protocol (over $190mn at a annualized rate) which is paid to DAI minters from both on-chain and RWA collateral. The later programme, in particular, is proving popular because of the relatively high nominal interest rates available on US fixed income products which Maker’s RWA protocol invests in.

Near-term, however, some caution is starting to creep in as the number of MKR held in the wallets of centralized exchanges has jumped, potentially a sign that some holders may be about to take-profit after the 45% rally in the MKR token seen over the past month.

Meanwhile, AAVE gained as the founder of Curve, Michael Egorov, deposited 68 million CRV tokens on Silo Finance and used the proceeds to repay $11m in outstanding debt on the AAVE lending platform. The move follows earlier worries that Egorov, who over the summer it was revealed had loans worth over $100mn backed by the CRV token, had become overextended and, as such, presented a liquidation risk to various DeFi protocols such as AAVE.

Finally, the investment firm VanEck announced that it will rollout and Ethereum futures ETF to complement their Bitcoin futures ETF - the first Ethereum based ETF to be launched in the US. While the SEC has delayed their decision as to whether or not to green-light spot Bitcoin and Ethereum ETFs, the news helped lift ETH and crypto more generally as it is seen as further evidence of institutional investor interest in crypto as an asset class.

Sources: Trakx, Coingecko, Alphavantage

Market Trends

• Maker Token's Exchange Balance Spikes After 45% Price Surge: Coindesk.
• Curve founder Michael Egorov settles entire debt position on Aave: TheBlock.
• Enter the Ether: VanEck releases two ETF ads ahead of possible Monday launch: Cointelegraph.
• SEC launches proceedings to determine fate of spot Bitcoin ETFs, invites public comment: CryptoSlate.
• BIS and Central Banks Make Waves with Successful CBDC Test in Project Mariana: CryptoPotato.

Trakx News

• The Trakx Team attended the Patrimonia Conference (CGPs) last week.
• Ryan Shea published the August crypto monthly update Crypto’s Waiting Game.

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.