Trakx Weekly Update: September 4, 2023

Key Crypto Market Figures

CTIs Weekly Performance

Over the past seven days the Trakx Top 10 Crypto CTI was little changed, down 1%, and one may be forgiven for thinking it was an uneventful week. However, this was not the case. Last week saw crypto prices pump and dump more than 5% and it was entirely due to shifting perceptions as to the likelihood of the SEC green-lighting (or not) a spot Bitcoin ETF in the US – see below. Regards the other members of the Trakx suite of CTIs, for a third successive week the best performing CTI was Inflation Hedge (0.3%), while the worse performing was NFT Metaverse CTI, which slipped 6%.

As mentioned, the past week was all about the SEC. On Tuesday, the United States Court of Appeals for the District of Columbia Circuit vacated the regulator’s denial of Grayscale converting its Bitcoin Trust into a spot ETF meaning the SEC must either review Grayscale’s application afresh, or to seek to have the ruling overturned by a higher court (potentially all the way up to the Supreme Court). The news was warmly welcomed by crypto investors because it was seen as increasing the odds that a spot Bitcoin ETF would finally be allowed in the US. However, positive sentiment was squashed later in the week, when the SEC announced that it was delaying any decision on the numerous spot Bitcoin ETF applications currently filed with them, including those by BlackRock, Fidelity and other established tradfi firms, until October. (For more details and our assessment of the crypto implications of the court ruling check out our just published monthly update – see below)

It is not just the US were the judiciary are taking an alternative – more constructive – stance on crypto compared with the government. According to media reports, the People’s Court of China last week ruled that virtual currencies should be considered property and, as such, should not be viewed or treated as illegal under the country’s legal framework. The decision runs contrary to the announcement made back in September 2021 by the PBOC – China’s central bank – making all transactions in virtual currencies illegal. When first announced, the ban caused a sharp sell-off in crypto prices and prompted many crypto firms to exit the country. However, crypto use continued behind the great wall, with China last year estimated to be the second largest Bitcoin mining nation after the US according to the CCAF, and the latest court ruling should be seen as simply reflecting the reality of the situation.

Sources: Trakx, Coingecko, Alphavantage

Market Trends

• SEC Must Review Grayscale's Bitcoin ETF Bid After Previous Rejection, Appeals Court Rules: Coindesk.
• Former SEC chair says spot Bitcoin ETF approval is ‘inevitable’ despite delays: Cointelegraph.
• Delays mount: SEC defers ruling on BlackRock, Fidelity bitcoin ETFs: Blockworks.
• Elon Musk’s X moves closer to crypto payments with new state license: Cointelegraph.
• Chinese court contradicts government’s stance on virtual currencies, declares them to be legal property: Cryptoslate.

Trakx News

Ryan Shea published the August crypto monthly update Court-in' Bitcoin.

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.