Trakx Weekly Update: September 2

Key Crypto Market Figures

CTIs Weekly Performance

As highlighted by the 12% weekly slide in the Trakx Top 10 crypto CTI, August ended up pretty much as it began for crypto with the asset class finishing on the back foot. The worse performer, was the Recovery CTI (an index designed to outperform during market upswings), which fell 22%. In fact, such was the breadth of the sell-off that even the defensive Inflation Hedge CTI, which took the top spot in the performance table, witnessed a modest 2% dip over the preceding seven days.

One of the contributing factors to the decline in the Trakx benchmark CTI was the 8% drop in the value of TonCoin, the cryptocurrency associated with the social media app Telegram, whose founder and CEO was arrested in France the prior weekend. Mid-week the French government announced that Durov faced six charges related to alleged illegal activity occurring over the popular messaging app. The news triggered a strong backlash from leading members of the crypto/tech community (including Elon Musk) amid concerns about the ramifications Durov’s arrest has for free speech and privacy. In response, TON Society, the community behind the The Open Network blockchain, urged crypto/tech supporters to sign an open letter demanding Durov’s release. The letter received over 4 million signatures, but this strong show of support was not enough to bolster the price of TonCoin.

Perhaps part of the reason for the lack of positive price impact is a sense of disappointment by crypto players that the industry once again seems to be back in the governments’ cross hairs unlike earlier this summer when it appeared a more constructive stance was being adopted (at least in some countries). In addition to Durov’s arrest, the leading NFT marketplace Open Sea announced that it had received a Wells Notice from the SEC threatening to sue on the basis that NFTs listed for sale on their platform constitute securities and hence that OpenSea like other crypto forms before it are operating contrary to US Securities law. On the back of this news, the Trakx NFT Metaverse CTI, fell more than 18% last week.

A final unsettling development for crypto investors last week was the revelation by blockchain analytics firms that Ethereum co-founder Vitalik Buterin had transferred ETH worth around $10 million from wallets associated with him to exchanges. While Vitalik subsequently stated that he had not sold this holdings in order to realize a profit on his holdings, the transactions certainly undermined confidence in the second largest cryptocurrency by market cap as evidenced by the 10% price drop last week, a loss that hit the performance of several Trakx indices including the Bitcoin/ETH and Top10 PoS CTIs. The negative price impact was somewhat ironic given that just the week before Buterin had responded to criticism that he was too serious and not “bullposting” enough by publishing a tweet containing a picture of a bull with a sign saying “Ethereum is good”, which gave ETH a small price boost. Let’s just say, Buterin’s conversion to a meme-generating degen is a work-in-progress.

Sources: Trakx, Coingecko, Alphavantage

Market Trends

• France charges Telegram CEO Pavel Durov, releases him on €5M bail: Politico
• OpenSea Gets ‘Wells Notice’ From SEC, Which Calls NFTs Sold on Platform ‘Securities’: CoinDesk
• Are Vitalik Buterin’s $10M Ethereum sales bad news for ETH bulls?: Cointelegraph
• AI model generates real-time playable DOOM with no game engine: CryptoSlate
• How big is the yen carry trade — and why it matters to crypto: DLNews
• Tesla, Musk Dodge $258 Billion Dogecoin Lawsuit as Judge Dismisses Case: Decrypt
• SEC says it could challenge FTX crypto repayment plan: Cointelegraph

Trakx News

• As a reminder, Trakx will be attending the Patrimonia Conference in Lyon on September 25 & 26 and looks forward to meeting our IFA clients and prospects.
• Ryan Shea’s August Crypto Monthly Update will be published this week entitled “Shūban” watch out for it.

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.

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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.