🪙 What Needs to Happen for Bitcoin to Moon Again?

Today, I'm diving into the current crypto market scene and what it takes to get Bitcoin back on track.

💬 We're still in a bull phase, but this is the weakest pump since March 2023
💬 Demand for Bitcoin and stablecoin liquidity are dropping, with investor interest turning bearish
💬 The critical support level for Bitcoin is $56,000. Falling below this could trigger a major correction

Let's break it down:

📈 Market Action

The market’s growth needs a serious boost. Right now, it’s the weakest surge since March 2023.

HODLers have upped their buys to 72K BTC per month from 68K in May, but this is still way below the 160K we saw during Q1 2024's rally.

We need more buying pressure to lift prices.

📉 Bitcoin Demand

While demand for Bitcoin has ticked up a bit since May, it’s still far from the peak we hit in Q1 2024 during the US spot ETF launch.

For Bitcoin prices to skyrocket, traders need to get back in the green. Currently, their unrealized gains are still in the red.

📈 Stablecoin Liquidity

The 60-day growth rate for Tether (USDT) market cap has slowed down big time.

We need more liquidity to drive a price recovery.

📊 What’s Next

Bitcoin’s critical support level is $56,000. Dropping below this could lead to a significant dip.

The market is tough right now, but it’s not game over. Keep an eye on demand and liquidity, and be ready for potential dips that could send Bitcoin even lower.

Stay vigilant and ready to pounce on opportunities!

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📊 What’s Happening in the Crypto, and the New Reality of Tokenomics?

In recent years, the cryptocurrency market has undergone significant changes. One of the key indicators that helps to understand these changes is Fully Diluted Valuation (FDV), which reflects the total market capitalization of an asset when all tokens are issued.

However, FDV does not always provide a complete picture as it does not account for short-term market fluctuations.

It is also important to consider the float — the volume of tokens available for trading, which affects the valuation and liquidity of tokens.

❗️ Why Float is Important?

FDV is useful for long-term valuation but does not consider short-term market dynamics arising from changes in liquidity and supply.

😀Tokens with a high float, like Bitcoin, are highly liquid because over 90% of all Bitcoins have already been mined.

Tokens with a low float can have an inflated and misleading valuation.

For example, World Coin has a market capitalization of $800 million, but an FDV of $34 billion, creating a significant discrepancy.

In the industry, it has become a standard to unlock 5-15% of tokens for the community, with the rest locked for the team, investors, and other purposes.

❓ The Tokenomics Science

Tokenomics is the system of token distribution, balancing the interests of different stakeholders and ensuring the current and future value of the project.

Projects use different tokenomics to incentivize certain actions within their ecosystems:

1️⃣ Part of the tokens is unlocked for the public for price discovery
2️⃣ Another part is locked for investors and the team on favorable terms before public trading
3️⃣ Some projects use airdrops, rewarding users for specific actions such as providing liquidity or voting

❓ Why Fully Diluted Value (FDV) Remains Important

FDV is the market capitalization of an asset when all tokens are issued.

It shows how the market values the future worth of the token.

High FDV and low float can be misleading.

For instance, FTX used its FTT to inflate its balance sheet (and scam millions of users👤) by accounting for illiquid shares as assets.

❓ Why Airdrops are Used

Some protocols use airdrops to distribute tokens and mitigate risks associated with low float.

Airdrops reward users for specific actions that promote the growth of the protocol.

However, most tokens lose their long-term value. Only about a third of tokens retain their value after an airdrop, like BONK (~8x return).

Airdrops can stimulate short-term activity but do not always lead to sustainable growth.

For example, the Layer2 project — Optimism saw a spike in activity after an airdrop, but then activity declined.

✅In Conclusion…

Different tokenomics schemes and airdrops affect market valuation and network activity.

It remains an important factor to monitor trends and adapt strategies accordingly, while for investors it is even more important to master the tokenomics research, and not to buy-in the over-hyped projects with misleading vesting and unlock schedules.

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😁 Meme Coins: A New, yet Old Phenomenon in the Crypto & Culture

The invasion of meme coins into our lives has not only created a huge buzz in financial markets but has also shaken the cultural world.

Today, we gonna dive into the phenomenon of this type of cryptos, and where they emerged from.

😀 At the Peak of Popularity

The total market cap of meme coins has soared to $60 billion, with active presence on Layer-1 networks like Ethereum and Solana, and Layer-2 networks like Base.

In March, meme coins recorded a staggering $13 billion in spot trading volume, surpassing the giants like Ethereum and Solana.

🐰 Memes Evolution: From Antiquity to the Digital Age

Memes have always been an integral part of human culture. The term "meme" was introduced by British evolutionist Richard Dawkins in his seminal 1976 book "The Selfish Gene."

In the digital age, memes have found new carriers in the form of viral videos and images, such as "Doge," which spread rapidly through the internet and social media, shaping cultural ideas faster than ever before.

🪙 Memes and Financial Markets

Recently, memes have invaded the financial world, creating phenomena such as meme stocks.

For example, the dramatic rise in GameStop's value was driven by collective efforts on online forums.

Meanwhile, meme coins themselves, such as Dogecoin and Pepe, are capturing the imagination of crypto enthusiasts worldwide.

😀 Rapid Growth of the Meme Coin Sector

Since the launch of Dogecoin in 2013, the meme coin sector has significantly expanded, reaching a total market cap of $60 billion by June 2024.

The leaders today include:

😀Dogecoin ($DOGE) — $17.1bn
😀Shiba Inu ($SHIB) — $9.7bn.
🐸Pepe ($PEPE) — $4.3bn

Solana also became a hub of activity for meme coins due to its low transaction fees and ease of token creation.

😮 Investment Frenzy

The meme coin sector shows remarkable superiority over other crypto asset sectors. From October 2023 to 2024, meme coins have yielded an average of 740% returns.

This has also stimulated the growth of meme coin indexes, such as the GMCI Meme Index, highlighting their importance in investment circles.

🪙 Surge in Trading Volumes

Growing attention to the meme coin sector has fueled activity in the digital asset markets.

As such, in March 2024, meme coins recorded a record $13 billion in spot trading volumes on CEXs, surpassing giants like Ethereum and Solana.

DEXs also played a crucial role in the meme coin ecosystem, providing liquidity and accessibility for a wide range of users.

😀 Risks and Issues

However, not everything is rosy. The high concentration of token ownership increases the risk of market manipulation and liquidity problems.

The Gini coefficient (~0.8) for meme coins, highlights significant centralization of token ownership.

Before investing in meme coins, it is crucial to carefully assess the risks and dynamics of this rapidly developing market.

🐸 Meme Coins: Boom or Bust?

The meme coin sector shows astounding growth and significant influence on the cryptocurrency market.

However, it is also important to evaluate the potential risks and opportunities associated with meme coins.

Meme coins are not just "ordinary" cryptocurrencies but a unique product of our time that has found its place in popular culture, and likely to stay with us for a long time.

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🤔 What is Gonna Happen to Crypto in the Next Half Year?

Grayscale Research analysts promise that the upcoming quarter for the crypto market will be eventful.

To better understand the origins of changes, let's start with the current situation.

Complex Market Dynamics

Since the beginning of the year, the crypto market has shown mixed dynamics.

Despite the significant growth of $BTC (about 50%), the Crypto Sectors Market Index (CSMI) has decreased by approximately 3%, indicating that the gains were narrow and concentrated in a small number of assets.

We observe a similar situation in traditional stock markets, where returns were also dominated by a narrow circle of companies.

Dividing into Five Segments

To help investors better navigate this complex asset class, Grayscale developed the Crypto Sectors structure, which divides the digital asset market into 5 segments:

1️⃣ Currencies
2️⃣ Smart Contract Platforms
3️⃣ Finance
4️⃣ Consumer and Culture
5️⃣ Services

This structure provides investors with a roadmap similar to tools in traditional markets, helping them better understand and navigate the constantly changing class of crypto assets.

Grayscale Research Top 20 Cryptocurrencies in Q3 2024

Traditionally, Grayscale Research has published the Top 20. Experts selected tokens with high potential for the upcoming quarter.

Among the leaders are:

🪙 Bitcoin ($BTC)
🪙 Ethereum ($ETH)
🪙 Solana ($SOL)
💎 Toncoin ($TON)
🪙 Chainlink ($LINK)

The selection of crypto assets is based on the:
1️⃣ Analysis of upcoming catalysts
2️⃣ Market trends
3️⃣ Fundamental factors of specific tokens

What to Expect?

1️⃣ Ethereum on the Rise: Expected ETF Approval

One of the most important events of this quarter will be the possible approval of the spot Ethereum ETF.

This event could significantly impact the Ethereum ecosystem.

ETF approval will lead to significant capital inflows, potentially supporting the valuations of Ethereum and the related tokens.

As a platform with the largest DeFi ecosystem, Ethereum could see increased activity and support for the valuations of Layer2 tokens such as Mantle, and DeFi protocols such as Uniswap, Maker, and Aave.

2️⃣ The New Wave of AI and Crypto

Among other interesting topics of the quarter is the impact of AI technologies on the crypto, as the AI-related protocols have already shown significant results.

For example, Near, one of the leading smart contract platforms, actively uses AI to develop "custom AGI."

Other examples include decentralized GPU markets like Render and Akash, which could also benefit from the market's continued preference for AI exposures.

3️⃣ Successes of Toncoin and Pendle

Another notable phenomenon is the success of Toncoin and Pendle.

— The TON blockchain, associated with 👤, is seeing significant growth in user numbers and commission revenues (thanks to hamsters and clickers?)

— Pendle Finance allows users to customize the yield profile of their strategies and also shows positive dynamics

What is Next?

The simple answer is — as always, f*ck knows. Will the crypto keep evolving, or the clickers is its last 'innovation'? Most likely, the crypto giga chads will come up with something more cool. But what will it be? — Only the time will show...


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