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Gate Research Institute: Weekly Market Review and Outlook 06.29-07.05
Abstract
Market Interpretation
Market Commentary
Focus this week
On June 29, Polkadot's financial report for the first half of 2024 was released, revealing a total expenditure of $87 million, with the treasury budget only sufficient to support operations for two years, raising concerns about the project's sustainability. During a Twitter Space organized by Polkadot on July 2, community members discussed these issues, emphasizing the need for strategic spending on key infrastructure and developer support rather than low-return activities. 【1】 As interest increases, trading volume for Dot and some Polkadot concept tokens has surged. For instance, on July 5, Coinglass data showed that Dot and Polkadot concept tokens experienced nearly a 40% increase in trading volume. 【2】
Since June of this year, the German government has been gradually transferring BTC to exchange addresses, a move that could trigger volatility in the cryptocurrency market and exert downward pressure on Bitcoin prices. On July 4 at 8:25 (UTC), addresses marked as "German Government" transferred a total of 1300 BTC to Kraken, Bitstamp, and Coinbase, valued at approximately 75.53 million dollars. Despite the fact that the Bitcoin transfers and potential sales by the German government account for only a small portion of the daily trading volume of Bitcoin, this event has had a significant impact on market sentiment. According to data from Arkham and blockchain explorers, the German government currently holds over 40,000 BTC, valued at over 2.3 billion dollars.
In addition to the German government's sell-off, the progress of the Mt.Gox compensation issue has also intensified the recent market uncertainty. The Mt.Gox trustee previously stated that the repayment work for BTC and BCH would start in early July, with test transfers beginning on July 4th from addresses marked as Mt.Gox. This move has garnered widespread attention from the market; although it is currently just a small-scale test, it has already had a negative impact on market sentiment. According to Arkham data, the Mt.Gox compensation could bring about 142,000 BTC in selling pressure. As the compensation work progresses, these bitcoins may gradually enter the market, increasing supply pressure. In the long run, the market will need time to digest this selling pressure and find a balance in the new supply and demand relationship.
Focus This Week
Against the backdrop of monthly price declines in the cryptocurrency market, the TVL of the TON chain has seen significant growth. Recently, a series of "click-to-earn" mini-games like Not Coin have become extremely popular, further boosting the popularity within the Ton ecosystem, with more similar games continuously being launched.
Hamster Kombat is a highly anticipated phenomenon game in the TON ecosystem. According to its official website, the number of registered users has exceeded 200 million, with over 48 million followers on Telegram, more than 31.5 million subscribers on YouTube, and over 11 million fans on Twitter. The core gameplay of this game involves clicking on hamsters to accumulate points, while players can also earn additional rewards through various methods such as purchasing special cards, daily check-ins, social media interactions, and referring new friends. The token airdrop promised by Hamster Kombat's official team has further stimulated players' enthusiasm for participation.
According to Coingecko data, the market capitalization of TON has exceeded $17.7 billion, ranking ninth in the cryptocurrency market capitalization leaderboard. This achievement highlights the market's high interest and confidence in the TON ecosystem. 【5】 In addition, Gate.io has launched pre-market trading for Hamster Kombat (HMSTR), revealing its token economic model. The platform will provide investors with the opportunity to buy and sell before HMSTR officially goes on the market, allowing them to set trading prices based on personal expectations before the tokens circulate in the public market, thereby enhancing trading flexibility.
Popular Concept
Affected by the overall market, various sectors have experienced different degrees of decline. However, due to macroeconomic factors, gold prices have seen a slight increase, with related tokenized assets showing a minor growth of 1.3%. The drop in Layer 0 concept is relatively small, mainly because the recently listed ZRO has had a good increase this week, boosting the overall concept's growth. Other various altcoin concepts have also experienced a certain degree of decline due to the influence of the overall market and liquidity. This week, the altcoin market has been quite volatile, from the rebound at the end of last week to the decline in the middle of this week, all indicating the impact of the overall market on altcoins. [6]
Hot Tokens
According to data from CoinGecko, the two top 100 projects with impressive gains at the beginning of this week are ENS and BEAM. The recently launched airdrop tokens ZRO and ZK have also attracted significant market attention.
ENS is a well-known Ethereum domain service provider, and the ENS team is about to participate in EthCC[7], which will take place in Europe on July 8. They will introduce their upcoming new brand to the attendees. At the same time, ENS V2 is about to be launched, and the market has optimistic expectations for the project, which could be the direct reason for the recent rise.
BEAM is the governance token of the gaming ecosystem Beam, originally called Merit Circle, whose main business is gaming guilds, has gradually developed into a huge gaming ecosystem after rebranding, and in June, Beam announced that it will enter the fields of AI, infrastructure and gambling. On July 1st, Beam launched a $BEAM distribution campaign, where all builders of the Beam ecosystem can claim rewards for a limited time.
LayerZero is a cross-chain interoperability protocol designed for lightweight messaging, providing trustable and assured messaging with configurable trustlessness features. The ZRO Tokenomics indicates that nearly 40% of tokens will be allocated to the community. In recent days, the token price has risen from $2.5 to $4.
zkSync is a Layer 2 scaling solution developed by Matter Labs that utilizes the latest generation of zero-knowledge proofs to maintain the security of the underlying blockchain. After the token launched on Gate, it surged to $0.2241 and then retraced to $0.1575, with the current trend showing significant similarity to the BTC market.
Highlight Data
macro funds
As of July 4, the total trading volume of BTC ETFs reached $912.85M, the total market capitalization of BTC ETFs was $54.34B, and the total assets under management of BTC ETFs were $50.97B. This week, after achieving net inflows for 5 consecutive days, BTC ETFs experienced net outflows for 2 days, indicating a decrease in external interest in cryptocurrency investments.
As BTC ETF net inflows decrease, the market capitalization of stablecoins has slightly dropped by 0.27% to $160.952b, and the pace of off-exchange capital inflow has slowed. This phenomenon may be caused by the unclear macroeconomic interest rate policies in the United States, as well as a decrease in enthusiasm for high-risk assets such as cryptocurrencies from outside the industry. [8]
Ethereum Gas Fee
This week, the Ethereum Gas Fee has remained at a single-digit level, indicating that on-chain activity is not very active. 【9】 Among the top 5 Gas consumers, the Telegram trading bot Banana Gun ranks fourth, far surpassing many well-known DeFi protocols. 【10】 According to the chart created by Dune @whale_hunter 【11】, the trading pairs with the highest trading volume for Banana Gun are RCH-WETH, SOL-SLERF, USDC-WETH, PEW-WETH, and USDT-WETH.
Bitcoin Ahr999 Index
The AHR999 indicator, also known as the "hoarding indicator", AHR999 has been stable at the 0.8 level in the past week, which means that the price of Bitcoin may be in the normal valuation range relative to its realized value. [12] According to the AHR999 indicator, this may be a suitable time for regular investment.
! Data source: CoinGlass, as of 2024-07-04 16:00
> The Ahr999 indicator is a "HODL indicator" used to measure the attractiveness of Bitcoin investments, helping investors identify potential buying and accumulation opportunities while avoiding investments during market overheating.
Market Opportunities
Project Airdrop
This week's popular airdrop ecosystem to pay attention to is: Bitcoin Layer 2 project Bitlayer
Introduction: Bitlayer is the first Bitcoin Layer 2 built on BitVM, providing Bitcoin-equivalent security and Turing completeness. The project completed a $5 million seed round of financing in March, with Gate Labs also being one of the investors. According to data from the project's official website, the current Bitlayer TVL has reached $495 million, making it the second-ranked ecosystem within the Bitcoin ecosystem.
Airdrop opportunity:
In May, Bitlayer and other projects in the ecosystem held the first phase of the Top Mining Festival, where seven star projects will airdrop assets worth more than $24 million. In June, the three-day Season 2 Mining Festival was held, with an empty investment value of about $1.2 million. Judging from the official social media, many projects in the ecosystem are still holding similar airdrop activities, and the third season of the mining festival may also be launched soon, which is an airdrop ecology that can be focused on.
Financing Weekly Report
This week, several projects successfully completed key rounds of financing, involving various innovative projects and startups. According to statistics from RootData, from June 28 to July 4, a total of 28 projects announced financing, of which 7 projects received more than $10 million in funding. Moreover, among the Top 7 financings, 4 rounds were seed rounds. Here are the top three financing scales:
Attention Next Week
Token Unlock
According to Token Unlocks, there will be a number of projects that will be unlocked in large amounts from July 6, among which Xai will face pressure from teams and investors to unlock tokens, with a scale of about $80 million, accounting for about 71.59% of the current circulation, and it is necessary to pay attention to potential selling pressure. 【14】
Crypto Calendar
=nil; Multiple projects including Foundation and EOS will undergo upgrades and new feature launches next week. The largest annual Ethereum event in Europe, EthCC[7], will be held on July 8, with participants including investors, crypto enthusiasts, developers, and entrepreneurs, etc.【15]
On a macro level, multiple important macro data will be released next week, among which one of the data that has the greatest impact on cryptocurrencies is the US CPI data to be released on July 11. A CPI higher than expected may lead to an increase in investors' expectations for the Federal Reserve to raise interest rates, which would be bearish for cryptocurrencies. [16]
Reference Material
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