Threading on the Edge

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Threading on the Edge
ToE's Weekly Highlights #67
ToE's Highlights

ToE's Weekly Highlights #67

Jun 02, 2024
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Threading on the Edge
Threading on the Edge
ToE's Weekly Highlights #67
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$PEPE memes its way to $7B while $ONDO becomes WallSt's pick

Celebrity coin resurging with the same vibes as 1 year ago

$MAGA Mania After Trump Verdict

A dive into meme mania + 86 alpha projects for the week ๐Ÿงต๐Ÿ‘‡

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Weekly Updates

Here are some observations for the week.

  • The launch of spot Bitcoin ETFs was a major success, with BlackRock's Bitcoin ETF becoming the fastest to reach $20 billion AUM.

  • Retail trading volumes on Coinbase remained well below 2021 levels, suggesting cautious retail investor sentiment.

  • Trading volumes on decentralized derivatives exchanges hit new all-time highs, driven by high incentives and improved user experience.

  • Monthly funding for crypto projects increased from bear market lows but remained low compared to 2021/early 2022 levels.

  • Bitcoin and Ethereum supply on exchanges reached multi-year lows, indicating potential supply crunch and bullish price dynamics.

  • The key question is what killer app will drive the next wave of mainstream retail adoption into crypto.


Narrative Dominance: Memes, Real-World Assets, and AI

The data reveals a clear dominance of three major narratives driving the crypto market's performance in 2024: memecoins, real-world assets (RWAs), and artificial intelligence (AI). These narratives have resonated strongly with retail investors due to their inherent simplicity and accessibility. Given the increasing institutional adoption of RWAs and the rapid proliferation of AI technologies, these narratives are poised to maintain their momentum, presenting lucrative opportunities for strategic investment and product development.

Spotlight on Spot Bitcoin ETFs

The launch of spot Bitcoin Exchange-Traded Funds (ETFs) has been an unparalleled success, with BlackRock's Bitcoin ETF setting a record as the fastest ETF to amass $20 billion in assets under management. This milestone underscores the burgeoning institutional demand for regulated crypto investment vehicles. As the market eagerly anticipates the approval of spot Ethereum ETFs, it is evident that traditional financial institutions are increasingly embracing the crypto ecosystem, paving the way for mainstream adoption.

Retail Investor Sentiment: Cautious Optimism

Despite the euphoria surrounding the crypto market, retail investors have exhibited a cautious approach, as evidenced by Coinbase's trading volume, which remains well below the levels observed during the 2021 bull run. This trend suggests a potential opportunity for strategic onboarding initiatives, as the influx of retail capital has historically coincided with market cycle peaks.

The Rise of Decentralized Derivatives

The data reveals a remarkable surge in the trading volume of decentralized derivatives exchanges, surpassing the levels witnessed during Bitcoin's all-time highs in 2021. This trend can be attributed to the high incentives offered by perpetual decentralized exchanges (DEXs) and the improved user experience facilitated by these platforms. As the derivatives market continues to evolve, strategic partnerships and platform enhancements could yield substantial competitive advantages.

Funding Landscape: Cautious Optimism

While crypto funding has experienced a threefold increase from the bear market lows, it remains significantly lower than the levels observed during the 2021 and early 2022 bull runs. This trend presents an opportunity for venture capitalists and project incubators to strategically allocate resources and nurture promising projects, potentially positioning themselves as early movers in the next phase of crypto innovation.

Supply Dynamics: Bullish Indicators

The data reveals that the supply of Bitcoin and Ethereum on exchanges has reached multi-year lows, indicating a potential supply crunch. This trend is bullish for price appreciation, as a diminished supply available for sale can amplify the impact of whale accumulation. Strategic investors and market makers should closely monitor these supply dynamics to capitalize on emerging opportunities and mitigate potential risks.

The Road Ahead: Killer Apps and Sustained Growth

As the crypto market continues to evolve, the key question remains: What killer application will drive the next wave of retail adoption? Drawing insights from previous bull runs, the next 12 months are poised to be a period of exhilarating growth and innovation. By leveraging data-driven insights, fostering strategic partnerships, and embracing disruptive technologies, industry players can position themselves at the forefront of this transformative era.

Weekly alpha by @TheDeFinvestor

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Narrative Overview

Here are some key narratives for the week:

  • The approval of spot Ethereum ETFs by the SEC was a major event, but the price reaction of ETH was relatively muted, with an initial pump to $3950 followed by a pullback.

  • While the ETH ETFs have been approved, they are not trading yet as the S1 registration statements still need SEC approval, expected in a few weeks.

  • The ETH ETF pricing may not be fully reflected yet, suggesting potential for further upside in ETH price over the next few months, though short-term drawdowns cannot be ruled out.

  • Memecoins like PEPE, MOG, BRETT, TURBO, ANDY, WZRD, MEW, and WOJAK saw significant pumps after the ETH ETF approval, showcasing their tendency to act as "ETH beta" coins.

  • Real-world asset (RWA) coins like ONDO, DUSK, and TOKEN also performed well post the ETF approval, with ONDO emerging as a potential "BlackRock coin" narrative.

  • Trump's guilty verdict in the hush money trial led to a brief dip in "politifi" memecoins like MAGA/TRUMP, BODEN, and TREMP, but they quickly recovered.

  • Other notable movers included NOT, Uniswap's UNI token, Arweave's AR/AO tokens, JASMY, ORDI, CHZ, BEAM, STG, and the newly launched Pixelmon token MON.


The Approval of Spot Ethereum ETFs: A Watershed Moment

  • The SEC's approval of spot Ethereum ETFs represents a pivotal milestone, signaling growing institutional acceptance and regulatory clarity.

  • While the initial price reaction was relatively muted, this development holds significant long-term implications for mainstream adoption and price appreciation.

Memecoins: Capitalizing on Retail Fervor

  • Memecoins, such as PEPE, MOG, BRETT, TURBO, ANDY, WZRD, MEW, and WOJAK, have emerged as "ETH beta" assets, capturing retail investor enthusiasm.

  • Their ability to outperform following major market events presents opportunities for strategic positioning and portfolio diversification.

Real-World Asset (RWA) Coins: Bridging the Tokenization Gap

  • RWA coins, notably ONDO, DUSK, and TOKEN, have gained traction as vehicles for tokenizing real-world assets, appealing to institutional investors.

  • The "BlackRock coin" narrative surrounding ONDO underscores the growing intersection between traditional finance and decentralized assets.

"Politifi" Memecoins: Leveraging Political Polarization

  • The guilty verdict against Trump in the hush money trial catalyzed a brief dip in "politifi" memecoins like MAGA/TRUMP, BODEN, and TREMP, followed by a swift recovery.

  • These assets highlight the potential to capitalize on political narratives and tap into passionate user bases.

Innovative Token Launches and Listings

  • The launches of tokens like Arweave's AO, Pixelmon's MON, and the listings of BEAM, STG, and CHZ on major exchanges signal ongoing market dynamism and evolving use cases.

  • Strategic positioning and timely execution could unlock significant value in this rapidly evolving tokenization landscape.

Other updates

Major Headlines:

  • Spot Ethereum ETFs approved, likely trading to begin in July/August

  • Coinbase launching gold and oil futures

  • US House passes comprehensive crypto legislation (FIT21 bill)

  • Grayscale launches trusts for STX and NEAR tokens

  • Hong Kong in talks to allow staking for Ethereum ETFs

  • Iconic Doge meme dog Kabosu passes away

  • Mt. Gox bitcoin movement detected

  • Healthcare company Semler Scientific starts buying bitcoin

Project Updates:

  • GCR's Twitter hacked, hacker exposed linking to a memecoin

  • Gala game exploiter returns $22.4M to team

  • NormieBase on Base exploited

  • zkSync airdrop planned for June 13th

  • Whales Market launches memecoin launchpad

  • Farcaster raises $150M led by Paradigm

  • Merchant protocol enabling 100% fee sharing

  • Fantom Foundation introduces Sonic, raises $10M

  • Ethereum's Pectra upgrade targeted for Q1 2025

  • Sei v2 Layer 1 goes live

  • Rumor of Friendtech leaving Base chain

Narratives & Opportunities:

  • "Restaking" yield opportunities for ETH whales (EtherFi, Pendle, etc.)

  • Airdrop farming potential in Blackwing, Scroll Sessions 0 & 1

  • Opportunities on Celestia rollup for TIA gas fees

Technical Analysis:

  • Crypto markets seeing a strong bullish impulse within a re-accumulation territory

  • Potential for further upside after a short consolidation period

Early Projects

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