3. Market trends

3.1 DeFi sector rebounds across the board

https://www.coingecko.com/en/categories/decentralized-finance-defi

In February, the prices of DeFi projects all increased significantly. Coingecko data shows that in the past 30 days, the market value of DeFi category tokens has increased by 31%, of which Uniswap has increased by 100%. This is mainly due to the Uniswap Foundation’s fee conversion proposal, which has reignited the market’s interest in the DeFi field, causing the overall price of DeFi category tokens to rise significantly.

3.2 The MEME industry is experiencing a rotational rise

Recent market trends have shown rotation among mainstream currencies, AI, DePIN, GameFi, DeFi, and meme sectors. In February, meme coins such as Dogecoin, SHIB, and Pepe increased by more than 300%, and their wealth creation effects were significant. However, meme coin prices are highly volatile, with SHIB market makers focusing on selling recently. Given this volatility, investors should remain cautious.

3.3 The BTC Stake ecosystem is beginning to take shape

https://x.com/MerlinLayer2/status/1763783422529695862?s=20

By staking BTC as the basic asset, leveraging the market value consensus of BTC, introducing the narrative and expectations of the BTC ecosystem, and airdrops, quickly absorbing BTC to increase TVL has become a highly anticipated business model. Currently, Merlin Chain’s TVL has reached US$3 billion, of which BTC accounts for 53% and ORDI accounts for 33%. Therefore, many BTC Layer2 solutions have gradually attracted attention, such as Babylon, which received investment from Binance. Babylon ensures the security of the Cosmos ecosystem by introducing BTC for remortgage. The broad prospects of the BTC mortgage track are increasingly recognized by more people, and it is recommended to continue to pay attention to this trend.

4. Investment and Financing Observation

In February 2024, the total investment in the cryptocurrency market reached US$700 million, a slight increase from US$695 million in the previous period, an increase of 0.67%. The public data is as follows:

There were 134 financing events, a year-on-year increase of 55.81% (118 in January 2024).

There were a total of 6 acquisitions, a year-on-year increase of 20%, indicating an increase in acquisition activity.

The average financing amount was US$7.2193 million, a year-on-year decrease of 10.74%.

The median financing amount was US$4 million, a year-on-year increase of 19.4%.

Although the average financing amount dropped slightly, the number of financing events, the number of acquisitions, and the median financing amount all increased, indicating that while market activity is increasing, investment and financing are becoming increasingly rational.

The five largest funding rounds in February were as follows:

- EigenLayer completed a $100 million funding round at an undisclosed valuation.

- Flare Network closed $35 million in funding at an undisclosed valuation.

- Ether.Fi closed $27 million in funding at an undisclosed valuation.

- Avail closed a $27 million seed round at an undisclosed valuation.

- MetaStreet closed $25 million in funding at an undisclosed valuation.

In addition, from the perspective of investment and financing events:

There were 38 seed rounds (a year-on-year increase of 40%), 15 strategic financings (a year-on-year decrease of 21%), 13 pre-seed rounds (a year-on-year increase of 30%), and 8 other types (no change). Seed round financing events are the most common, followed by strategic financing and pre-seed round financing, while other types of financing events occur less frequently.

From a VC perspective, Animoca Brands is the most active in investing in infrastructure, NFT and GameFi, while Binance Labs and Multicoin Capital have the largest number of investments in the DeFi field. Other venture capital firms' investments are focused on infrastructure.

Investment activity in the cryptocurrency space increased in February, with both the number of projects and the amount invested reaching their highest levels in nearly a year. Investments continue to focus on infrastructure and DeFi. This trend may have a positive impact on market sentiment in March and attract more investors to the market.

Entering March, the development trend of cryptocurrency and blockchain investment activities may be affected by various factors such as the global economic situation, technological innovation, and policy environment. Assuming that no major adverse events or policy changes occur, market sentiment remains optimistic, and technological innovation continues to advance, investment activity is expected to continue its growth trend in March. However, market fluctuations and policy changes are still major risk factors. Investors should remain vigilant, continue to pay attention to developments, and make timely and accurate investment decisions.

5. Summary

February 2024 dynamics and markets reveal several important trends:

The market has shown a clear reaction to macroeconomic data and policy expectations, especially after the release of employment growth and inflation data.

The altcoin market has shown strong momentum, especially driven by ETF adoption, with the prices of BTC and ETH rising significantly this month.

Stablecoin issuance continues to rise, on-chain TVL continues to grow, and mining pool data grows steadily, all indicating that investors are optimistic about the future.

The increase in total financing indirectly reflects the increase in market activity and investor confidence.

Despite macroeconomic uncertainties and regulatory policy challenges, investment in technological innovation and infrastructure construction continues to grow. These trends bode well for the long-term potential and growth of the cryptocurrency market. Investors and market participants should continue to pay attention to macroeconomic indicators, technological innovation and changes in the policy environment, and make wise decisions in the changing market landscape. We expect the crypto market in April to continue to demonstrate its unique ability to innovate and its impact on the global financial ecosystem.