CMC Market Pulse delivers actionable market insights, giving you all the key narratives and developments you need in under 5 minutes.
Market Overview 📉
The week started with a push higher for the markets, led by Bitcoin (BTC) strength, with the markets trading sideways for a while before pushing to new highs later in the week. Altcoins followed only later in the week, with many playing catchup against BTC. However, despite the huge move in BTC, the Total Crypto Market Cap rose only 3.97% to a new high of $3.25T as altcoins bled out against BTC.
Bitcoin (BTC) saw a gain of 11.51% across the week, while Ethereum (ETH) continues to underperform against BTC, closing only 8.82% higher from the week prior, despite putting in a strong move on Thursday.
Daily liquidations surged on both the long and short sides, with cumulative liquidations reaching $350M on most days in the week as BTC pushed towards the fabled $100K mark. Funding rates on BTC stayed mostly flat across the week, while ETH’s surged higher closer to the end of the week to 42%, perhaps indicating a renewed interest in the asset.
📌 Michael Saylor announces a new set of BTC purchases of 51.780 BTC at $88.6K for a total value of $4.6B, just one week after a $2B purchase the week prior. - Link
📌 Discussions with the SEC regarding the launch of a spot Solana ETF are said to be “progressing” from sources close to the matter. 19b4 filings are to be expected in the coming week. - Link
📌 SEC Chair, Gary Gensler, announces that he will stepping down from his position, with effect from January 20th. - Link
Why does it matter?
Crypto markets continue their runup, with BTC breaking upwards to break through the highs made last week, continuing the bullish sentiment in the crypto markets. The move this week was in line with traditional equities, which also rallied this week, with the S&P 500 up 0.68% and the Nasdaq up 0.40%. Volatility in the middle of the week was largely attributed to Nvidia’s earnings release, which only briefly affected the market as it was released.
The week continued to see strong BTC strength against altcoins, with BTC Dominance making a new high at 61.53%, before retracing to 60% as altcoins caught up. That said, several altcoins also outperformed against BTC, especially in the memecoin sector, as liquidity distributed across the flavor of the week.
Notable outperformers among altcoins mostly centered around memecoins. AI-themed coins such as Zerebro (ZEREBRO) and Fartcoin (FARTCOIN) were some of the top performers this week, putting in >100% returns across the last seven days. Several ‘dino coins’ also did well, including Stellar (XLM) and Hedera (HBAR), which put in surprising moves this week at a 111.2% and 95% gain respectively.
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Narrative of the Week 📰
Tiktok-focused memes rose to prominence this week, with popular memes from the social media platform surging to multi-million dollar market caps in just a single day.
📌 A memecoin named after the popular “Chill Guy” meme, CHILLGUY, surges this week to a peak of over $500M in market cap, ushering in a short-lived narrative of memecoins centered around TikTok memes. - Link
📌 The artist behind the Chill Guy meme threatens a take-down for crypto tokens utilizing the Chill Guy meme, with the team behind the token setting up a donation wallet for the artist, who has yet to respond. - Link
Why does it matter?
Since the run up from late 2023, crypto native investors have been pushing and buying up memecoins that they feel ‘normies’ would buy. But as the actual retail investors onboard crypto through TikTok, they’re not buying up the latest dog-themed derivative coin, but instead memes on TikTok that they’re already familiar with. As the cycle progresses and more retail investors enter the space, the influence of TikTok in the crypto memecoin space will likely only continue to increase.
Major Project Updates 🗓️
📌 Coinbase introduces USDC rewards on the Coinbase wallet, offering 4.7% APY on on-chain USDC balances on Coinbase wallets, for all users. - Link
📌 Binance releases BFUSD, a new yield-bearing margin asset for Binance Futures users, with rewards derived from funding rate payments and staking rewards. - Link
📌 On-chain data product, Arkham Intelligence, announces plans to expand their product offering to include spot trading, just weeks after launching perpetual trading. - Link
📌 Omni-chain infrastructure layer, LayerZero, announces lzRead, making omni-chain data accessible across all chains and from any time period, for governance, proof of reserves, state synchronization and more. - Link
📌 Ethereum-compatible L1, Monad, begins rolling out their testnet, eight months after the launch of their devnet in March. Monad seeks to optimize the Ethereum architecture for significantly higher throughput through a pipelined architecture. - Link
📌 Injective launches iAgent, an SDK leveraging OpenAI’s ChatGPT to enable anyone to create and launch their own on-chain AI agent. - Link
📌 Decentralized social network, Lens Protocol, introduces Social Legos, enabling developers to create custom rules and features for users on the network in a completely modular fashion. - Link
📌 ‘RollApp-as-a-Service’ layer, Dymension, introduces Royalties, enabling RollApp creators to earn 50% of fees from token swaps on Dymension 3D. - Link
Why does it matter?
Stablecoin-based yields become the key customer acquisition tool, especially with the influx of institutions and sophisticated investors into the crypto space. Coinbase’s USDC rewards allow users to earn a 4.7% APY from their non-custodial wallets, completely removing smart contract risk from interacting with DeFi protocols. Binance’s product, while not directly a stablecoin, enables yield to be earned on a stable asset, which could prove attractive to traders on the platform.
DeFi Brief 🏦
📌 The governance proposal to turn on the fee switch for synthetic stablecoin protocol, Ethena, has passed. The team will propose the parameters for the fee switch by November 30, with the implementation mechanics to follow shortly. - Link
📌 Omni-chain liquidity layer, Elixir, announces their deUSD RWA Institutional Program in collaboration with Securitize, enabling BlackRock’s BUIDL and other RWA holders to access DeFi via deUSD. - Link
📌 Perpetual DEX, dYdX, rolls out dYdX Unlimited, bringing to the platform instant market creation and automatic liquidity. - Link
📌 Stablecoin protocol, Thala Labs, was exploited for $25.5M, following their latest update. The app has since resumed functionality, with the exception of farming functions, and the exploiter has returned the majority of the funds for a $300K bounty. - Link
📌 Lending platform, Morpho Labs, has enabled transferability of their token, MORPHO, enabling the token to be traded. MORPHO on Ethereum is required to be wrapped to enable transfers. - Link
Why does it matter?
While centralized exchanges make their moves on stablecoins and their yields, on-chain DeFi stablecoin projects are also pushing to develop their project further, with Ethena turning on the fee switch for ENA holders to align token holders and the protocol, as well as Elixir partnering with Securitize to expand the reach and use cases of their stablecoin, deUSD.
Meme Coins 🚀
📌 Market maker and investor, DWF Labs, launches a $20M Meme Fund, designed to support innovative memecoin projects across all blockchains. - Link
📌 A memecoin developer dumps 5% of the token supply of a memecoin, Gen Z Quant (QUANT), while on livestream, prompting traders to pump the token to spite him while other affected users proceeded to doxx his address and family members, with many of them launching as tokens on pump.fun themselves.- Link
📌 The developer behind ai16z launches an “official” token for Eliza, the ai16z mascot, resulting in the dump of two other ELIZA memecoins relating to the same character. - Link
Fundraises 💰
📌 DeFi liquidity solver protocol, Barter DeFi, raises $3M in a seed round led by Maven 11 Capital, with support from Lattice, Anagram, DCG and more. - Link
📌 AI data layer, OpenLayer, raises $5M in a funding round, with investors including a16z Crypto CSX, Geometry, IOSG Ventures and Spartan Group, among others. - Link
📌 Modular DEX project, Valantis, raises $7.5M in a seed round led by Cyber Fund, SevenX Ventures and Kraken Ventures, with participation from Nethermind, Figment Capital and more. - Link
Airdrops Abound 🎁
📌 Perpetual DEX, Hyperliquid, will be distributing additional points for user activity in May, October and November, next week. Users expect the announcement for their token generation event to follow shortly. - Link
📌 NFT marketplace, Magic Eden, unveils tokenomics for their upcoming token, ME. The total token supply sits at 1B tokens, with 12.5% allocated to the initial airdrop. - Link
Tweet of the Week 📝
Source: CryptoWithNick
As it turns out, actions have consequences. Welcome to the Internet, kid.
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