Trakx Weekly Update: September 16

Key Crypto Market Figures

CTIs Weekly Performance

Crypto returned to the green during the past seven days as evidenced by the Trakx Top 10 Crypto CTI gaining 7.4%. The best performing CTI last week was the Top 10 DeFi which rose 11.3% in value whereas at the opposite end of the performance stack was the Bitcoin Momentum CTI that was basically unchanged on the week.

The rebound in crypto prices reflected shifting expectations about US policy but not as a result of the first presidential debate between Trump and Harris. Indeed, to the disappointment of some crypto bulls the asset class did not receive any mention in the debate (although afterwards Trump released a video teaser on social media for the launch of World Liberty Financial – a DeFi project associated with his family). Rather the move was driven by a last minute change to US rate expectations ahead of this week’s Fed meeting, where the US central bank is unanimously expected to announce its first monetary policy easing in over four years and by doing so follow in the footsteps of their European equivalents (the ECB eased an additional 25bp last week).

Despite last week’s core CPI data coming out a tad higher than expected, based on the CME’s Fed watch tool the highest probability (60%) is attached to the Fed easing cycle kicking off with a 50bp cut versus a 40% implied probability for a 25bp cut. The thinking behind the tilt towards a more aggressive Fed response is that with market participants have already displayed heightened sensitivity to the prospect of a recession, front-loading monetary easing would stifle any speculation the Fed was falling “behind the curve”. However, one could easily argue that by cutting 50bp as opposed to 25bp the Fed is implicitly acknowledging its concern about the underlying strength of the US economy, which would be decidedly less bullish for cryptocurrencies and risk assets more generally. Last week investors were of the former view, this week who knows if that will change? Much will depend on the tone struck by Chair Powell in his statement and Q&A during the press conference.

Finally, crypto also received a fillip from the news that MicroStrategy – the software company headed by Bitcoin uber-bull Michael Saylor – had bought an additional 18,300 Bitcoin over the past month. As a result of these additional purchases, MicroStrategy’s overall holdings have risen to just under BTC 245,000, which equates to almost 1% of the total supply of Bitcoin, or just under $10bn in “old” money. The average purchase price of all the Bitcoin’s in MicroStrategy’s possession is around $38,500, which is some 35% below the current market price, but represents an absolute bargain if Saylor’s $13m Bitcoin price target over the next 21 years comes to fruition.

Sources: Trakx, Coingecko, Alphavantage

Market Trends

• Trump Readies New Crypto Launch, ‘State Of Crypto Address’: Investor’s Business Daily
• Bitcoin Slips to $58K as Fed Faces Split Rate Cut Expectations: CoinDesk
• MicroStrategy continues bitcoin buying spree, lifting holdings to $9.45 bln: Reuters
• MicroStrategy’s Michael Saylor Predicts Bitcoin Price Will Rise to $13 Million: Decrypt
• Ethereum’s Vitalik Buterin Amps Up Pressure on Layer-2 Networks to Decentralize Further: CoinDesk
• Grayscale to launch US XRP trust, paving way for potential ETF: CoinTelegraph

Trakx News

• The public sale of $TRKX is set to take place in late September! The TRKX token will unlock the full potential of Trakx, and it will be offered on major launchpads, including @daomaker, with more to be revealed soon.
• We will be at the Patrimonia Conference in Lyon on September 25 & 26 and look forward to meeting our IFA clients and prospects.

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.