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tl;dr: SOL’s dominant run, parallelization takes center stage, endless tailwinds remain, ETF approval imminent, inflows & core metrics remain healthy & *all* ETH is locked
BTC dominance 52% | ETH dominance 17% | DeFi TVL $104B | Total Crypto Market Cap $1.8T | Stablecoin Supply $131B | SOL dominance 2.75%
Happy New Year & cheers to everything in store for 2024 to all!! Apologies for the brief hiatus, but after an exhausting sprint throughout the entirety of Q4 I took the most time away from screens in the previous week then I have since before covid (damn that was almost 4 years ago).
Anyway, it’s hard to comprehend how back Page One is & we’re deeply focused on dominating 2024 through the same thing we’ve always done: provide an inside, no bullshit look at what we’re doing/seeing without the usual newsletter fluff and/or corporate wrapping. So with that out of the way, let’s dig in.
It’s been a month (apologies again) since my last writing as I’ve instead hyper focused on the opportunities the market has endlessly provided since October 1st. On October 1st, I released a Round Tripping post that detailed the case for becoming hyper bullish by saying:
“While the endless range and time-based capitulation continue, there are several reasons to believe that BTC, along with the entire market, *should* finally push up and through 30k+…From my understanding, the likeliest outcome of the years long saga that is a spot BTC ETF finally concludes with the approval of numerous ETFs on/around ARK’s final deadline date of January 10th, 2024…Combining all of the above, we’re now likely ~3 months away from the first ever spot BTC ETF approval, ~7 months away from the BTC halving and potentially ~12-14 months away from spot ETH ETF approval. Does anyone really want to be selling coins at these prices? The time to be structurally bearish has come and gone.“
This isn’t to pat myself on the back, rather it’s a reminder of what’s caused the endless rally of the past 3 months while highlighting the unique nature of it providing a clear potential “end date” that is now a week away. This is of course also prescient because the entire conversation on CT for the past ~two weeks has been centered around what happens on and shortly after the ETF approval date? How deep is the sell the news event everyone seems to be anticipating?
As of this morning, James Seyffart tweeted the above image of the current state of the core 11 spot BTC ETF filers saying that all signs point to “approval orders in that Jan 8 to Jan 10 window.” Over the past 30 days, BTC had been oscillating in a ~10% range until yesterday as it broke the range to the upside and closed convincingly above 45k. So, what’s next?
IMO, the two key determining factors to answer that question unfortunately remain in the relatively unknown state. The first, what is the timeframe between ETF approval and the actual launch of the products? While there’s currently no set timeline, our favorite Bloomberg ETF analyst James Seyffart, thinks “the gap [from approval to launch] will be measured in days NOT weeks.” Additionally, options on the launching BTC ETFs should “happen quickly”.
Secondly, and more important for continuation of price appreciation down the line, what do the inflows to the various products look like? Of course, the answer to this question is impossible to know, but I’d argue the constant bid (until today) on COIN, MSTR & BTC miner stocks combined with the CME BTC premium, futures open interest & options open interest signals that not only is TradFi front running prices ahead of an eventual approval, but that they’re significantly short, mid and long term underexposed to an asset that is going to be endlessly shilled by the world’s largest financial institutions.
As for the endless shilling that’s going to occur, if the time to launch the ETF is days after approva, I’m not sure the broad market calling for a classic sell the news event is prepared for the onslaught of marketing and connections the issuers are waiting to deploy. Andrew Kang and others have said it better than I ever could, so I’d highly recommend viewing his tweet and the extended thoughts he’s quote tweeting.
On the other end of the equation, their are endless BTC holders that have bought throughout 2023 sitting on impressive unrealized gains and some of the most OG and respected traders/minds I’ve been lucky enough to talk to and read are convinced of a significant sell the news event. Additionally, an added wrinkle includes a Reuters report from last Friday noted that, “the SEC may notify issuers as soon as Tuesday or Wednesday that they have been cleared to launch the following week.” If confirmation is known sometime *this week* then the sell the news correction could be a bit more significant as there’s more time between eventual launch to offload. I realize presenting the two arguments without a definitive right answer might seem pointless, but both sides are worth considering.
In addition to considering, you could simply join me on the comfy side of realizing that no one is forcing you to sell to hypothetically buyback lower, no one is forcing you to trade the event, and essentially everyone realizes that this is one of the most impactful events in crypto’s history and you could simply hold spot, enjoy how far this still nascent space has come and look forward to the years of price appreciation ahead!
With that being said, if I had to make a prediction, I think that the approval will send BTC to ~50k, a retrace to ~40k for a ~20% down move will occur relatively shortly after but the time from approval to launch and onslaught of marketing/shilling from the world’s largest financial institutions will result in a relative V recovery back to 45kish leaving those who increasingly want to buy mid-to-low 30ks sidelined. Hold spot, relax, enjoy how far we’ve come, prepare capital to buy strong alt dips, realize that the asset class has never had a catalyst of this nature and internalize the statement of higher for longer.
While the market has been hyper-focused on the ETF launch and its resulting implications, there’s been endless lively developments throughout the core crypto ecosystems including:
SOL’s World — relative outperformance has slowed since Christmas, but the story of 2023, & December specifically, remains SOL as its ecosystem enters the DeFi Summer of ETH stage; SOL metrics exploded throughout December as SOL 24H DEX volume flipped ETH for the first time ever, SOL flipped ETH in 7d & 30d NFT volume for the first time ever, Solana-based USDC becomes top stablecoin by transaction volume
EVM Parallelization — as Keone, the founder of our friends over at Monad says, the list of parallel EVM chains as of 2 months was singular: Monad. As of today, that list includes: Monad, Avalanche, Polygon, Sei, Scroll & Neon — led by SOL’s resurgence, the focus on the need to optimize for parallelization has drastically benefitted NEON & SEI in recent weeks; expect this trend to continue throughout 2024 & put into hyperdrive from the eventual launch of our friends at Monad
Inflows & Volumes — the weekly crypto asset inflows into crypto ETPs continues to remain healthy, albeit slowing a bit & the growth of the TVL of stablecoins + total market cap has remained uponly; stablecoin TVL is up to 100B from ~63B in September while the stable market cap has climbed 8B from the 2023 lows of ~123B; in addition, monthly crypto exchange trading volume hit $1.1T in December, breaching $1T for the first time since September of 2022. Binance led the way with a 39.3% share of total volume, quelling any doubts about their staying power after CZ’s guilty plea.
BTC fees — as a result of the ongoing development of BRC-20s, inscriptions, and ordinals, the fees and long-term network sustainability of the network have gone parabolic in recent months with BTC miner revenue reaching ATHs in transaction fees and BTC convincingly passing ETH in transaction fees for a month+
FTX Estate — Zaheer (@SplitCapital) & his team breakdown what the FTX Estate has sold through December 8th. Court documents show they’ve sold $1.8B worth of crypto & have somewhere around ~$1B left, likely denominated entirely in SOL (181M), BTC (661M) & ETH (187M); more importantly, FTX claims, once written to 0, are now trading as high as 73 cents on the dollar with every dollar returned to claim owners potentially further fueling the crypto asset class when reentered
ETH Locked & Onchain Drought — after raising their recent restaking caps, EigenLayer now has 608k ETH (~$1.4B) locked in their protocol, Blast’s TVL has breached $1B, Manta Network has locked $300M & there’s another ~$67B (some rehypothecated through Eigen) of ETH being staked; as a result, the onchain ETH ecosystem has been quiet for the past ~2 months, something that should change with the launch and unlock of the protocols listed
Points — there seems to be a growing fuss about the tireless nature of protocols launching points programs them, but they are clearly “this cycle’s top user acquisition tool like 2020’s yield farming without emitting highly inflationary tokens + leave some control to protocols for incentivizing user behavior as per their needs (revenues, ideally)” — imo after the shitshow that was the first 3 quarters of 2023, we should be generally thankful of the ever-growing number of points programs and future opportunities
Airdrops — one of the key tailwinds I’ve noted in recent months is the plethora of airdrops reigning free money in various ecosystem participants. Since then, JTO provided a massive stimulus to the SOL ecosystem, something that Jupiter, Wormhole & Mrgnfi (+ others) will also do soon; StarkNet & LayerZero have also confirmed airdrops in Q1 of 2024 largely benefitting the ETH ecosystem & Celestia + Dymension have rewarded cross chain participants of ETH, SOL & ATOM, a trend that will only increase as the modular blockchain vision ever-expands throughout 2024
Dencun — the next major ETH upgrade which includes EIP-4844 will be live on testnet January 17th, if testnet upgrades are successful it should be live on mainnet in mid-March; EIP-4844 introduces blobs & promises to eventually reduce L2 transaction cost in combination with protodanksharding — as a result of this news, and people positioning/rotating to ETH & ETH beta ahead of the narrative shift for the ETH ETF which we’ll explore more in depth on Sunday, Arbitrum’s ARB token has entered price discovery, Optimism’s OP has continually appreciated & MINA’s zk L2 is becoming a CT cult coin; expect this narrative to only grow in the coming weeks/months
As a reminder, the P1 team is always reachable at contact@pageone.gg. If you want to sponsor the newsletter & reach an audience of 12k+ active market participants, pitch a guest post, tell us about your protocol or to collaborate on anything in general, you can always reach us there or @PageOneGG.
funding:
Wormhole, cross-chain bridging platform, raises $225M @ $2.5B valuation
Web3 arm of Japanese messaging app LINE raises $140M
Andalusia Labs raises $48M @ a $1B+ valuation; announces Karak Network, “the only ETH L2 with native risk management, restaking & AI infrastructure”
DUST Identity, physical to digital authentication company, raises $40M Series B
GFO-X, “UK’s first regulated and centrally cleared trading venue dedicated to digital asset derivatives”, raises $30M Series B
Canaan, Chinese BTC miner manufacturer, raises $25M
Dynamic Labs, wallet abstraction & authentication, raises $13.5M Series A
Nonco, digital asset brokerage firm, raises $10M seed
Coinchange, DeFi yield platform, raises $10M
Lolli, BTC cashback & rewards company, raises $8M Series B
OCEAN, decentralized BTC mining pool company, raises $6.2M seed
Metagood, BTC ordinals marketplace, raises $5M seed
MYX, decentralized derivatives protocol, raises $5M seed @ $50M valuation
Wynd Network, decentralized web scraping network, raises $3.5M seed
Gacha Monsters, Japan gaming startup, raises $3M seed from Animoca
nftperp, perpetual NFT futures trading platform, raises $3M Series A
news:
Saylor buys 14.62k BTC for $165M throughout December, files to sell $216M more of MSTR to presumably acquire more BTC
Coinbase launching RWA tokenization platform licensed in Abu Dhabi, the project is built own its ETH L2 Base; Coinbase secures crypto licenses in France
CF Benchmark launches Staking Reward Rate Series for institutional clients, provides investors with reward rates from PoS chains
Custody firm Copper launches digital asset brokerage platform for institutional trading in the UAE
Barry Silbert & Mark Murphy resign from Grayscale’s board
FTX debtors granted approval to start selling $744M worth of Grayscale & Bitwise shares, mainly includes $597M worth of GBTC & $87M worth of ETHE
Celsius begins opening withdrawals for some claim holders, 58.3k users holding ~$210M worth of assets will be able to withdraw 72.5% of their claims
NYDFS approves Paxos stablecoin expansion to Solana, to launch on January 17th
tokens & protocols:
MKR — planning to “redominate 1:24.00 (5c/token) & rebrand to a new name
INJ — announces inSVM, the first Solana SVM rollup for the IBC/INJ ecosystem
DYDX — begins distributing rewards (in USDC) accrued from trading to users
JTO — Jito Labs airdrops their MEV + liquid staking protocol token on SOL
WLD — announces World ID 2.0, enables apps to verify real users w/ World ID
SEI — plans to add EVM support in v2 upgrade sometime in Q2 2024
JUP — SOL aggregator/perps/dca/limit + more protocol confirms Jan. airdrop
COIN — continues rally along side crypto & ETF hype, up 53% last 30 days
RUNE — THORChain partners with Ordiswap (ORDS) to bring liquidity to BRC20s
FXS — upcoming L2 will have “unique airdrop/points system”, launch in January
SNX — governance votes to end token inflation, rollout buybacks & burns
LSK — will transition to to an ETH L2 powered by Optimism’s OP stack in 2024
METIS — ETH L2 launches $110M ecosystem fund
EigenLayer — increases ETH staking deposit caps, TVL surpasses $1B
Starknet — confirms STRK token snapshot, no timetable confirmation though
Layer Zero — officially confirms token, says launch will be in “early 2024”
Ondo Finance — RWA leader on ETH expands tokenized treasuries to SOL
Symbiogenesis — Square Enix to launch anticipated browser-based ETH & MATIC game on December 21st
around the ecosystem:
Messari’s Ryan Selkis publishes his annual Crypto Theses, now live for everyone
Redphonecrypto’s annual 69 Dreams & Delusions for the year ahead
Vitalik releases an updated ETH roadmap diagram for 2023 & beyond
Vitalik also pens an excellent essay, “Make Ethereum cypherpunk again”
tweets:
Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.
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