Trakx Weekly Update: October 9

Key Crypto Market Figures

CTIs Weekly Performance

After an explosive start to the month, last week saw a partial retrace as evidenced by the Trakx Top 10 Crypto CTI dipping 3%. The best performers were the lower volatility Bitcoin Control and Inflation Hedge CTIs, which were essentially unchanged on the week. The weakest sectors were in the decentralized crypto space with the Top10 Defi and DEX CTIs both down around 7%.

Contributing to the weak performance was a substantial drop in the value of Rune, the native token of THORchain, which is a constituent of both the Top10 Defi and DEX CTIs. It lost almost a quarter of its value late last week after THORSwap, which runs on THORchain, announced that it was entering what it described as “maintenance mode” in order to curb the illicit use of funds over its network. The announcement comes after it was revealed that the FTX hacker, who has moved around $150m in stolen funds out of ETH into other cryptocurrencies via a series of transactions, last week sent over 15,000 ETH to the DEX. According to the developers behind the protocol, the system will remain in this mode until a “more permanent and robust solution” is found. Given SBF’s criminal trial started last week, generating considerable media focus on FTX-related news, the timing is especially unfortunate for the protocol, which goes some way to account for the magnitude of the drop.

Regarding SBF’s trial, fellow FTX co-founder Gary Wang testified that Alameda Research – the crypto hedge fund set-up by SBF - had special privileges compared with other FTX users including a large line of credit, effectively meaning Alameda could access FTX customer funds. Given three other people within the FTX/Alameda Research universe have also agreed to cooperate with the prosecution having already pleaded guilty, it is certain that more evidence of nefarious behaviour will come to light in the remainder of the trial, which is expected to last a further four weeks. While the details are likely to only confirm what many in crypto suspected, it is clearly not good PR for an asset class that is still in its infancy.

More positively, Grayscale CEO Michael Sonnenshein announced they were planning to convert their $5bn Ethereum Trust to a spot ETF. This means the US regulator now has two Grayscale spot crypto ETF applications to consider given the US court ruling several weeks ago that found the SEC’s earlier rejection of their spot Bitcoin ETF was “arbitrary and capricious”. Given that nine ETH Futures ETFs launched in the US last week it is clear the crypto industry continues to position itself for mainstream adoption.

Sources: Trakx, Coingecko, Alphavantage

Market Trends

• THORSwap Pauses Platform After Series of FTX Hack-Linked Trades: Coindesk.
• FTX co-founder says Sam Bankman-Fried firm was ‘taking customers’ money’ for years: FinancialTimes.
• Grayscale submits SEC filing to convert Ethereum Trust to spot ETF: Cointelegraph.
• Ethereum Future ETFs Start Trading in US for First Time: Decrypt.
• El Salvador’s first volcano-powered Bitcoin mining project goes live: CryptoSlate.

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.