Looking back on the past month, the most impressive thing is that BTC broke through a new all-time high (denominated in RMB), with the price exceeding RMB 470,000. It can be said that it no longer fails any Chinese.
At the same time, we observed the classic bull market phenomenon of sector rotation: in early February, market enthusiasm first centered around Ethereum, with the launch of the modular project DYM and the concept of ERC404 becoming famous; in mid-February, NVIDIA led the rally to a record high, and BTC began to The sharp rise has driven the craze of BTC Layer2. The price of STX has increased by more than 100%. At the same time, Merlin chain staking mining is booming; the launch of Pixel on Binance has driven the gaming sector to rise slightly; until late in the year, OpenAI released a large Sora video model on the official website to detonate the Ai sector. The founder Two projects invested by Sam Bankman have skyrocketed, with Worldcoin (WLD) rising by more than 200% and ARKM rising by more than 300%. At the end of February, PEPE led the meme concept to rise.
In addition, Japan's open policy plans to allow venture capital companies and investment funds to hold crypto assets, causing Jasmy to rise more than 300% in February. The market still follows the principle of "play with the new, not the old". The performance of the older generation of altcoins was not outstanding in the past. New projects and new concepts can always attract more funds and attention.
In terms of airdrops, there were endless airdrops in February. Dymension ($DYM) airdropped more than 350 million U.S. dollars, and Starknet airdropped 700 million $STRK to 1.3 million wallet addresses, with a maximum of more than 7 U.S. dollars each online. However, many accounts with similar behavior were found to be witches. In addition, Wormhole, which is valued at US$2.5 billion, announced an airdrop of 17% of its tokens, which triggered the market's attention to cross-chain protocols. Binance launched the cross-chain protocol AXL, with a single-day maximum increase of more than 50%.
The re-pledge track continues to attract capital attention. ether.fi completed Series A financing with US$27 million, locking in TVL of more than US$1.8 billion; EigenLayer received US$100 million in financing from a16z, and currently locks in TVL of nearly US$10 billion.
EigenLayer is a heavy-staking protocol based on Ethereum that enables users to re-stake their ETH, lsdETH and LP tokens as nodes to other sidechains, oracles, middleware, etc. and receive verification rewards. This allows third-party projects to leverage the security of the Ethereum mainnet, while ETH stakers can earn additional income, creating a win-win situation. Many people participate in staking on this track in the hope of obtaining token airdrops and staking benefits. A total of approximately US$15 billion worth of ETH is locked in the staking track, accounting for approximately 45% of Lido. This greatly limits the market liquidity of ETH. .
Bitcoin’s strong momentum has surprised many market participants. More than $2 billion in new money has flowed into ETFs over the past week, with more than $500 million added each day in particular from Monday to Wednesday, with long holders enjoying the upward momentum. But high funding rates and high futures open interest could pose risks to the current rally. Funding rates have averaged over 30% over the past seven days, making it expensive to hold long positions. The flow of altcoins is more complicated, sector rotation may continue, and hot narratives continue in March.
I think short-term liquidation and consolidation of Bitcoin is possible, but we have made it clear that the price increase is the actual demand for spot goods from ETFs, not a bubble, so it is too early to conclude that it is at the high point or top of the bull market.
And with the halving approaching, we saw Michael Saylor purchase another 3,000 BTC for $155.4 million, Reddit may be adding more BTC to its balance sheet, and Fidelity Canada recommends allocating 1-3% of BTC to Bitcoin. With BTC up 20% in the past seven days and BTC ETF net inflows hitting new highs, long-term, we have every reason to believe the Bitcoin ETF story is just beginning.
Grayscale’s BTC holdings decreased. After the spot ETF was approved, Grayscale’s high management fees caused investors to transfer BTC. Grayscale’s BTC holdings dropped from 619,200 to 428,500. However, our daily ETF monitoring data shows that Grayscale’s selling pressure Divided up by several other ETFs, among which BlackRock’s iShares Bitcoin Trust and Fidelity FBTC became the main demanders, with a total holdings increased to 265,000 BTC. In fact, the on-chain data we monitor shows that the BTC held by Fidelity has exceeded 200,000, which is consistent with Fidelity Canada’s point of view mentioned earlier.
Over the longer term, U.S. wealth managers and financial advisors increasingly have access to spot BTC ETFs, contributing to an acceleration of net capital inflows. This week, Wells Fargo and Bank of America Merrill Lynch announced that they would begin proactively offering spot BTC ETFs to clients on their brokerage platforms, with Morgan Stanley noting that they are considering adding the ETF to their brokerage platforms.
With 50 days left until Bitcoin’s fourth halving, increased net inflows into spot BTC ETFs will continue to push up the spread between daily BTC issuance and BTC purchased through ETFs. Currently, the spot BTC ETF extracts 10 to 11 times the amount of newly produced BTC from the market than the amount of BTC issued daily from block rewards (approximately 900 BTC). If current BTC ETF inflows remain unchanged or even increase over the next 50 days, the number of BTC that the Bitcoin ETF will suck away from the market will be 20 times greater than the daily issuance. Simply put, supply exceeds demand.
Robinhood will partner with Arbitrum to advance the accessibility of DeFi. At ETHDenver on Thursday, Robinhood and Arbitrum announced they would be partnering to provide support for new users to join web3. Robinhood is integrating Arbitrum’s L2 technology/ecosystem to provide low-fee in-app exchange for Robinhood wallet users (Robinhood is a stock brokerage that allows customers to buy and sell stocks, options, ETFs, and cryptocurrencies with zero commissions. We found Red Shirt Capital Participated in its financing six times and its current valuation is as high as US$11.2 billion).
While Robinhood Wallet currently offers support for multiple crypto networks outside of Arbitrum, including Ethereum, Bitcoin, Polygon, Optimism & Base, the new partnership with Arbitrum establishes the L2 network as the network of choice for Robinhood Wallet users , which is a testament to the Arbitrum technology stack and usability (once EIP-4844 reduces transaction fees by ~10x from current levels).
Robinhood's "degen heavy" user base may find it relatively easier to participate in Arbitrum's leading DeFi ecosystem and appreciate the value of DeFi. ARB currently appears to be constructing an ascending triangle structure and is worth watching for a price breakout.
Binance Futures is listed on Telegram Open Network (TON), with a leverage ratio of up to 50 times, pushing up the price of TON tokens. Telegram’s TON blockchain has surged in value thanks to new developments led by Pavel Durov. Telegram channel owners will soon be rewarded for their content, which could revolutionize revenue streams. The expansion of Telegram’s advertising platform has brought about significant changes, with a trillion monthly channel views, only a fraction of which is currently monetized. Starting in March, webmasters in nearly 100 countries will receive 50% of advertising revenue. Transactions will use the TON blockchain for fast, secure payments, creating a loop that allows creators to cash out or reinvest in channel growth.
Over $3 billion worth of crypto tokens will be unlocked in March, with Arbitrum issuing 1 billion ARB tokens, doubling its circulating supply to a value of $2.2 billion. We expect growth to be significant and selling pressure to be subdued. Other notable unlocks include Aptos with 24.84 million APT tokens ($290 million), 34.62 million SUI tokens ($58.15 million), and Optimism with 24.16 million OP tokens ($90 million). Year-to-date, these unlocked funds have pumped Aptos and Optimism over $450 million and $166 million respectively, while both have seen modest price increases.
Yuga Labs and De Labs enforce NFT royalties. Yuga Labs, famous for Bored Ape Yacht Club, emphasizes artist remuneration and only cooperates with NFT markets that enforce creator royalties. This move highlights their commitment to creators’ rights during the expansion of the NFT market. position. The decision, which focuses on their partnership with Magic Eden’s Ethereum marketplace, aims to ensure creators are continually compensated, fostering a more equitable ecosystem.
Ethereum’s Dencun upgrade is noteworthy in March, scheduled for March 13, 2024, and is a huge step forward that could help Ethereum scalability-wise compete with faster smart contract platforms in the crypto space. Chains (such as Solana) compete. Favorable factors for ETH include: (1) impending upgrade, (2) net deflationary supply, (3) network revenue generation ($2 billion in 2023), (4) SEC decision on spot Ethereum ETF in May, (5) Adding use cases for renting security features of the Ethereum network. (6) The ETH/BTC exchange rate is at an important support position, and RSI shows that it may reverse. In fact, this is a commonplace topic. We have been unanimously optimistic about the performance of ETH in 2024 since the 2023 annual report, and after February we noticed that the increase in ETH gradually exceeded that of ETH.
The Pi Cycle Top indicator shows that BTC has not reached the top overheating stage, and there is still room for growth in the long term. Pi Cycle Top can be used to indicate when the market is overheated, and orange indicates that the market is overheated.
The profits realized by the network began to surge and reached the highest point in the past 3 years, indicating that investors began to sell at a profit. We should pay attention to short-term risks. When losses (red) selling begin to occur on the chain, it is a good time to buy.
Past selections:
"February Crypto Market Opportunities"
"2024 Crypto Market Investment Outlook"
"December Crypto Market Opportunities"
Note: All content represents the author’s personal views only and is not investment advice, nor should it be construed in any way as tax, accounting, legal, business, financial or regulatory advice. Before making any investment decision, you should seek independent legal and financial advice, including advice regarding tax consequences.
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