Original title: Monthly Market Insights July 2024
Written by: Binance Research
Compiled by: Eason, Mars Finance
Key Takeaways
In June, the cryptocurrency market experienced significant downward momentum, with the total market capitalization ultimately falling by 11.4%. BTC fell sharply as Mt. Gox announced in July that it was about to repay over 140,000 BTC. Notably, the US and German governments are reportedly moving large amounts of BTC to centralized exchanges, adding to the negative sentiment in the market.
Miners have been net selling Bitcoin since November 2023, the longest streak of net selling since 2017. This has caused miner Bitcoin balances to fall to their lowest level in 14 years. One of the big drivers was the latest Bitcoin halving in April, which halved miner block rewards from 6.25 BTC to 3.125 BTC. Given that block rewards make up the majority of miners' revenue, many miners were forced to sell their Bitcoin holdings to survive. Of course, we have also seen a wave of deals and mergers in the industry, including transactions for Hut 8, CleanSpark, and Core Scientific.
The TON ecosystem has continued to see increased activity over the past month, with the number of daily active addresses hitting an all-time high of nearly 578K on June 14. Notable drivers and developments include the continued success of The Open League, Binance’s integration of USDT on the network, and Pantera Capital’s announcement of a new funding program to increase investment in TON.
BNB has been one of the strongest performing exchange-related tokens this year, up 86.4% year to date. In addition to the overall market improvement, BNB’s performance has been driven by continued activity from Binance’s new pools, as well as additional utility from new initiatives such as Binance Megadrop and HODLer Airdrops.
EigenLayer's market dominance fell to a low of 92.2%, indicating increased competition in the rehypothecation space. Karak and Paradigm-backed Symbiotic, while smaller, have both seen significant growth: Symbiotic reached its original $200 million deposit cap in just one day, while Karak’s TVL surpassed $1 billion for the first time. Still, EigenLayer's first-mover advantage suggests Karak and Symbiotic still have a lot of work to do to make further progress in this rapidly growing sub-sector.
Crypto Market Performance
In June, the cryptocurrency market experienced significant downward momentum, culminating in an 11.4% decline in total market capitalization. Despite a strong start to the month, the market suffered a major sell-off and massive liquidation event. These factors include Mt. Gox’s repayment distribution scheduled for July and governments such as Germany and the United States moving large amounts of BTC to centralized exchanges, raising concerns about a potential sell-off. On a positive note, asset managers VanEck and 21Shares filed for the first Solana ETFs in the U.S., bringing optimism to a challenging market.
Figure 1: Cryptocurrency monthly market capitalization fell 11.4% in June
Figure 2: Monthly price performance of the top 10 tokens by market cap
The top ten tokens by market cap all ended the month in the red amid a broad market sell-off. The decline was likely influenced by Mt. Gox’s announcement of a repayment distribution scheduled for July, causing the market to price in an expected BTC sell-off. Additionally, some governments were reportedly moving large amounts of Bitcoin to centralized exchanges, sparking concerns about a potential massive sell-off. BTC’s risk-off sentiment led other altcoins to follow suit, sparking a broad market sell-off.
TON outperformed the market by a wide margin, hitting a new all-time high (“ATH”) of $8.24 and ending the day up 17.5%. Additionally, TON’s DeFi TVL surged to $700 million, largely due to “The Open League,” a long-term incentive program for TON users, teams, and traders. With strong support from the Foundation’s ecosystem grants and community incentives, The Open League has been notable in attracting TVL inflows across multiple sectors, including Telegram Mini apps and games, DeFi, NFTs, and Memecoins.
BNB performed relatively well in a challenging month, rebounding to start June and reaching a new all-time high (“ATH”) of $720.67. However, it was unable to sustain this level and pulled back 18.8% to end the day in the red. Meanwhile, XRP experienced similar volatility, closing the day with a 9.0% loss.
BTC fell 10.9% month-on-month, mainly affected by Mt. Gox's announcement that it would begin repaying money in July. Mt. Gox plans to distribute more than 140,000 BTC to victims of the 2014 hack, which has raised market concerns that Bitcoin may face massive selling pressure. In addition, the US government transferred 3,940 BTC to Coinbase, while the German government reportedly sent approximately 4,600 BTC to centralized exchanges such as Kraken, Coinbase, Bitstamp, and entities identified as "Flow Traders" on Arkham Intelligence. These actions involve the potential liquidation of idle BTC holdings, exacerbating concerns about a potential market sell-off.
ETH had a challenging month in June, falling 10.0% month-over-month. June started off well, with the U.S. Securities and Exchange Commission (SEC) concluding its investigation into Consensys and Ethereum 2.0, while SEC Chairman Gary Gensler said in an interview with Bloomberg that the spot Ethereum ETF trading approval process was progressing smoothly. Despite these positive developments, ETH has struggled to maintain its price momentum. Later in the month, the SEC filed another lawsuit against Consensys' MetaMask service, alleging that the wallet tool acted as an unregistered broker-dealer engaged in securities offerings. The lawsuit also targets Ethereum staking platforms Lido and Rocket Pool, both of which have integrated into MetaMask to provide staking services.
Amid challenging market conditions, ADA and SOL experienced volatility, falling 14.0% and 16.2%, respectively, quarter-on-quarter. However, at the end of June, SOL showed a significant rebound, which was attributed to the launch of the first Solana spot ETF in the United States by digital asset managers VanEck and 21Shares. Several other key developments in the ecosystem include the Solana Foundation’s launch of “Blinks,” a technology that enables cryptocurrency trading on numerous websites and apps. Solana startup accelerator Colosseum also announced a $60 million investment in early-stage projects, while the launch of Light Protocol introduced ZK compression on Solana, a new primitive that enables secure scaling of state directly on L1.
AVAX fell sharply by 23.0%, while SHIB and DOGE experienced sharp retracements of 27.7% and 34.8%, respectively.As highly volatile and reflective assets to major cryptocurrencies like ETH and BTC, memecoins initially bore the brunt of the market downturn, underperforming the broader market.
Decentralized Finance (DeFi)
Figure 3: TVL share of top blockchains
Total DeFi TVL fell 8.7% in June as the market tanked. Notable winners this month include Bitcoin layer 2 networks Bsquared and CORE, which recorded staggering increases of 332% and 300% in TVL, respectively. TON also continued its astonishing growth trajectory, with TVL increasing 109% month-over-month to a new all-time high of $685.9 million. This can be attributed to the long-term success of the Open Alliance, a long-term community incentive program that has distributed more than $40 million in TON in the form of task rewards, airdrops, liquidity pool boosts, and more. The fourth season of the Open Alliance ended on June 27, with a total of $1.2 million worth of TON awarded to Telegram Mini applications, tokens, NFTs, and DeFi projects.
In June, several high-profile projects such as LayerZero, zkSync, Blast, and Eigenlayer (Phase 2) released their long-awaited airdrops and token generation events. After the Sybil self-reporting phase, LayerZero identified over 803,000 addresses as potential Sybil wallets, which resulted in these addresses receiving only 15% of the initial allocation, while the remaining 85% was redistributed to 1.28 million eligible addresses. The LayerZero Foundation implemented a “proof of donation” claiming mechanism, which received mixed reactions from the community. Recipients are required to donate $0.10 worth of ETH, USDT, or USDC for each ZRO token. The LayerZero Foundation has pledged to match all donations up to $10 million, which will go to the Protocol Guild, a collective funding mechanism for Ethereum developers. The zkSync airdrop faced several challenges, including sybil attacks, community backlash, and technical difficulties such as RPC issues due to high network load. In response to these issues, Binance launched its own ZK airdrop on June 17, targeting those who were not eligible for the official airdrop. Blast ended its airdrop on June 26, distributing 17% of its total supply to eligible users who interacted with the chain and stored their assets on Layer 2, accumulating Blast Gold and Blast Points. Users of NFT marketplace Blur seemed unhappy with its BLAST allocation, with only 3% of the supply going to Blur users. As Blur Season 3 ended with the Blast airdrop, 0.5% of the total BLAST supply was distributed to traders, while 1.5% was distributed to BLUR holders. The remaining 1% has been reserved for Blur users in Season 4.
Non-fungible tokens (NFTs)
Figure 4: Monthly NFT transaction volume
The NFT market continued to be sluggish in June, with total sales of $46 million, down 26.2% from May. DMarket, an in-game item marketplace on Mythos, topped the list with monthly sales of $18.9 million, followed by CryptoPunks with sales of $16.1 million. Notably, CryptoPunks saw a 3.5% increase in sales and a 29.9% increase in monthly trading volume. Top Ordinal series such as Bitcoin Puppets and NodeMonkes saw a sharp decline in sales, down 40.6% and 41.0%, respectively. Bored Ape Yacht Club saw a slight decline in monthly sales, while Pudgy Penguins outperformed the market with a 68.9% increase. This may be attributed to Igloo Inc.'s acquisition of Frame, an on-chain creator economy platform, and the announcement that they are developing Abstract Chain, a Layer 2 network for consumer crypto and on-chain culture. Additionally, Pudgy Penguins announced a partnership with Mythical Games to develop a Pudgy Penguins-themed mobile game on Mythos, which will be launched in 2025. Among the top chains, NFT sales fell sharply, with Bitcoin and Ethereum experiencing declines of 48.2% and 50.2%, respectively. Solana's monthly sales fell by 40.9%, while Blast saw a sharp drop of 81.0%, likely due to the end of its airdrop campaign.
Chart of the Month
Miners have been net sellers of Bitcoin since November
Figure 5: This is the longest streak of miners being net sellers of Bitcoin since 2017
The behavior of miners over the past few months has been another source of pressure on the price of Bitcoin. Since November 2023, we have seen miners have been net sellers of Bitcoin, the longest period of continuous net selling since 2017. This is of course a source of downward pressure on the price of the asset, in addition to the other factors we mentioned above. One of the important drivers of this continued selling has been the latest Bitcoin halving in April, which saw miners' block rewards halved from 6.25 BTC to 3.125 BTC. Given that block rewards account for the majority of miners' income, the halving has had a serious impact on many miners, making selling their holdings a necessity for survival. Perhaps not surprisingly, we have also seen a wave of deals in the crypto mining space. Just last week, we saw Hut 8 raise $150 million from private equity firm Coatue Management to build out its AI infrastructure business. We also saw CleanSpark agree to acquire competitor GRIID for $155 million. In addition, we saw Core Scientific announce a deal with CoreWeave to provide infrastructure. It will be important to monitor how long this period of net selling of Bitcoin will last, especially now that miner balances are at their lowest level in 14 years. Transactions and M&A will also be worth watching.
TON daily active addresses hit a record high
Figure 6: TON daily active addresses hit a new high in June
The TON ecosystem has continued to see an increase in activity over the past month, with the number of daily active addresses hitting an all-time high of nearly 578,000 on June 14. Considering that TON had only around 13,000 daily active addresses at the beginning of the year, this means that in less than half a year, this number has grown nearly 44 times. Several factors have contributed to the strong growth in network activity. First, TON has experienced significant growth since the launch of Tether's USDT on the network in late April. This has enabled seamless payments and provided a global payment infrastructure for more than 900 million Telegram users. Recently, Binance also announced the integration of USDT on the TON network, allowing more than 200 million Binance users to easily transfer USDT to the TON blockchain. In addition, The Open League has just concluded its fourth season, which provided 30 million TON tokens (about $225 million) as community rewards to encourage active participation from users and developers, playing a key role in incentivizing on-chain activities.
BNB Outperforms Among Exchange-Related Tokens
Figure 7: BNB’s return rate this year is 86.4%
BNB is one of the strongest performing exchange-related tokens this year, up 86.4% year-to-date. As the native token of the BNB Chain ecosystem, BNB acts as a governance token and also provides various utility functions, such as paying on-chain transaction fees and reducing Binance transaction fees. In addition to the overall market improvement, BNB's performance was also driven by Binance Launchpool activities and additional utility, which drove demand for the token. Notably, Binance launched its first Megadrop in April, allowing BNB holders to earn rewards by locking BNB and completing a series of tasks.
July Upcoming Events and Token Unlocks
Figure 8: Important events in July 2024
Figure 9: Maximum token unlocked in USD
