Cryptocurrency Market Update: Analysis and Insights – March 13, 2024

The bull run persists this week, sending the Bitcoin price to new all-time highs. The price of the first cryptocurrency soared above $73,000 this week before experiencing a very short-lived correction yesterday. Bitcoin’s weekly performance is still near 11%. Ether is also up nearly 8%, well above $4,000.

Other major altcoins are yielding double-digit returns: Binance’s BNB is up 38%, Avalanche 33%, and the Near protocol is the best performer this week among the top 20, favored by its founder’s invitation to speak at Nvidia’s AI conference starting on Monday. He'll be part of a panel of speakers. The NEAR Protocol is also rolling out its latest development called ‘Near Tasks’. Users can train AI models and get paid for it in NEAR cryptocurrencies.

Toncoin tokenomics

We observe that the Toncoin price has surpassed its 2021 record levels. Its 60% weekly performance is attributed to several announcements made in the past two weeks.

Telegram’s CEO announced at the end of last month that owners of the Telegram network will begin receiving 50% of their ad revenues paid out in the TON cryptocurrency. Additionally, he mentioned a few days ago that he is considering an IPO for Telegram.

Quoting Durov’s message posted on Feb 28th: "To ensure ad payments and withdrawals are fast and secure, we will exclusively use the TON blockchain. (...) we will sell ads and share revenue with channel owners in Toncoin."

Telegram is building a robust economy around TONCOIN, marking a significant shift from its position in 2020 when it had to disassociate from TONCOIN due to legal reasons - Telegram was under SEC scrutiny at the time.

According to Pavel Durov, Telegram boasts 900 million users and generates hundreds of millions in ad revenues. Durov mentioned a few days ago that Telegram received an offer valuing the company at $30 billion, which he purportedly declined, preferring an IPO that would involve a larger public pool of stakeholders.

For valuation comparisons, consider WhatsApp, which was acquired in 2014 by Facebook for $19 billion with less than 700 million users at the time.

Today, WhatsApp is likely worth more than $100 billion, boasting over 3 billion users worldwide. Therefore, Telegram has even greater potential.

So, the TONCOIN price has entered a speculative price discovery phase, with its market cap already surpassing $15 billion. Does TONCOIN truly represent 50% of Telegram’s market value?

Back to the markets

As you can imagine, every development, project, or announcement is having a significant market impact, fueled by the ongoing market rally. Traders and investors are seeking alternatives to Bitcoin, and promises are swiftly reflected in the price.

The TON cryptocurrency price has surged 55% in the past two days following Pavel Durov’s latest announcements.

The bull run is still very much alive, marked by a record day of net inflows computed by Bitmex research yesterday. A staggering $1.045 billion was injected, with $849 million alone going into Blackrock’s IBIT. The past five days also constitute a record week, with $2.57 billion injected.

VanEck dropped the 20 bps fee, a decision made two days ago, followed by net inflows of $119 million and $82 million on the subsequent days.

The Bitmex report also notes that Grayscale’s unwinds were low yesterday at $79 million. The total assets under management (AUM) of all Grayscale’s competitors now exceed Grayscale’s AUM.

Last week, I mentioned that while Grayscale’s revenues have remained stable since January, keeping their fees at 1.5% is not a sustainable solution. Currently, the negative impact of the outflows on AUM in US dollars is offset by the performance of the Bitcoin price. The higher the price, the higher the AUM in US dollars, resulting in relatively stable assets under management for Grayscale’s Bitcoin fund. We also previously mentioned that Grayscale is seeking solutions, and creating very niche funds is certainly not enough.

This week, Grayscale filed to register a new fund with the SEC: The Grayscale Mini Trust. The filing mentions that Grayscale ‘currently intends to seed the Trust through a Spin-Off (...) resulting from a contribution by Grayscale Bitcoin Trust (BTC) (“GBTC”) of a certain amount of Bitcoin to the Trust’. We could expect different characteristics: shares representing a smaller amount of bitcoins with lower fees.

A week of all-time highs and various events

Now I’d like to go over our standard metrics.

• We have a new all-time high (ATH) for Bitcoin futures open interest. The metric exceeds $35 billion US dollars according to Coinglass. The open interest on the CME is nearly double the highest figure reported in 2023.
• The TVL is growing in US dollars, but it’s also growing on Solana when we measure it in SOL. We also see a slight uptick in Avalanche’s TVL when measured in AVAX, as well as the BSC Binance blockchain when measured in BNB. This is not the case for Ethereum or Layer 2 solutions like Arbitrum or Polygon this week.

Daily volumes traded on Solana DEXes reached an all-time high this week.

We also have an all-time high in the daily number of addresses created on Solana. Still the price of SOL is far from the all-time high around 250 US dollars.

We have the Dencun Upgrade today on Ethereum - scheduled in a few hours. We should expect lower fees after the upgrade, more specifically, we’ll see lower fees on layer 2s once they start using the proto-danksharding feature.

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