Trakx Weekly Update: October 30

Key Crypto Market Figures

CTIs Weekly Performance

Crypto markets continued their rally over the past week with the Trakx Crypto Top 10 CTI up 10%, bringing year-to-date returns to 50%. In contrast to the S&P500, which declined over 2% last week, every Trakx crypto CTI finished in positive territory. The best performer was the DEX CTI, gaining 19% over the previous seven days, closely followed by the NFT/Metaverse CTI, up 18%. The weakest performers were the Lending and Inflation Hedge CTIs, which both rose 4%.

One driving force behind the move higher in crypto prices was ongoing anticipation that BlackRock would get the green-light from the SEC for its spot Bitcoin ETF product and that ahead of such a listing BlackRock could be purchasing Bitcoin to seed creation units of its ETF. Speculation amped up after it was reported that the Depository Trust and Clearing Corporation (DTCC) website included a listing for iBTC – BlackRock’s ETF product. Even though the DTCC clarified that adding listings in preparation for new product launches was not unusual, meaning only that an agent bank had requested a DTCC identifier and not that SEC approval was imminent, the clarification did little to damp investor enthusiasm. Neither did the ticker’s – unusual - one day disappearance from the DTCC list.

Importantly, it was not just ETF speculation that helped propel the major cryptocurrencies higher. Escalating geopolitical tension, the resurfacing of US regional bank worries (the KWB Bank Index last week dropped below the level seen after the collapse of First Republic Bank earlier this year, equating to a 30% loss year-to-date) and heightened concern about US fiscal dynamics given the surge in interest rates all served to boost demand for assets that sit outside the tradfi system. Just like gold, which is threatening to break to all-time highs, this benefited crypto - a theme we will explore in more detail in our next Monthly Update, due to be published later this week.

Finally, it was not just the large cap cryptocurrencies that benefited from the upswing in investor sentiment. The frog-based meme-coin Pepe, whose market cap surged to over $1bn in a matter of days after it was launched back in early May before tumbling back to earth, rose like a Phoenix last week. The price of the token jumped over 50%, the biggest percentage gain in the crypto space, as investors bet that a renaissance in crypto asset prices could disproportionately benefit higher beta meme-coins, such as Pepe.

Sources: Trakx, Coingecko, Alphavantage

Market Trends

• BlackRock bitcoin ETF added to eligibility file, says clearing house DTCC: Reuters.
• BlackRock’s IBTC back on DTCC after vanishing early Tuesday: Blockworks.
• Bitcoin Is Up 100% This Year. It's Not Just Because of Spot BTC ETF Hype: Coindesk.
• Crypto Memes Kick Back Into High Gear After Bitcoin ETF Frenzy: Bloomberg.
• Elon Musk says X payments will eliminate need for bank account by end of 2024: CryptoSlate.

Trakx CTIs Performance

*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.