Aptos Surge Triggers Flashbacks of Ripple’s 2017 Bull Run

Shorting positions and the South Korean crypto market might hold some answers to the token’s spike

article-image

Thomas Neveu/Shutterstock modified by Blockworks

share

Layer-1 Aptos has seen the price of its token, APT, soar by 460% since the start of the year.

Previously dubbed the ‘Solana Killer,’ proof-of-stake network Aptos promised to create a fast and cheap blockchain that would enable NFTs, DAOs and DeFi activity but fell short when it launched in October last year. 

Only 50 active developers are currently active on Aptos, according to data from TokenTerminal. Its number of daily active users currently sits around 31,000

Despite these numbers, Aptos’ fully diluted valuation (FDV) is significantly greater than that of other blockchains, including Avalanche, Solana, Polygon, and Optimism, Blockworks Research Senior Analyst Dan Smith said.

Aptos’ recent price surge correlated with the deployment of the decentralized exchange (DEX) PancakeSwap on its blockchain two weeks ago  — the DEX makes up a total of $33.26 million in TVL on Aptos — almost 60% of the entire Aptos TVL, according to DefiLama.

“The lack of development is obvious in the on-chain liquidity, which mostly resides on a non-native DEX — PancakeSwap — in the form of non-native tokens such as USDC, BUSD, WETH,” Smith said. 

Projects often run a series of testnets with developers who are building on their network before mainnet launches. That “creates a community of developers and users before the token launch, which is undeniably a more ethical process,” Smith added. Aptos ran four testnets in 2022 before launching on mainnet.

So why is the network with few users and developers seeing such a huge increase in its token’s price?

Nearly 400 articles about Aptos were published in the weeks leading up to its 460% rally | Chart by David Canellis

The South Korean market 

The price rally of Aptos parallels the beginning of “Xangle Blockchain Foundation Week” in South Korea, where the project has been heavily promoted.

In fact, Aptos’ focus on the South Korean market has always been intentional. A Twitter user who goes by the pseudonym DataaRocks noted in a series of tweets that the company had released a Korean language version of its white paper and partnered with local gaming company Npixel in November last year to launch METAPIXEL. 

It is also preparing to launch its world tour hackathon in Seoul, DataaRocks said.

Loading Tweet..

This momentum, however, is reminiscent of Ripple’s run in 2017, Markus Thielen, head of research and strategy at Matrixport, said in a report.

“This reminds ‘Matrix on Target’ of XRP Ripple, which had 50% of [its] trading volume driven by Korean retail investors during the 2017 peak when the token went 10x in a matter of weeks,” Thielen said in a report.

Short positions

It is also likely that many traders are looking to short APT, Thielen said, noting that over the past 48 hours, price movements have been driven by two large short squeezes.

“By far, the largest volume comes from ByBit for Aptos, which is estimated to have its web traffic source from Russia [at] 19% and Korea [at] 14%,” he said.

Funding rates for APT perpetual futures have also been trading negatively, indicative of heavy short interest. According to information on Coinalyze, Aptos’ funding rate fell sharply on Jan. 25 and Jan. 26, before leveling out once the price spiked.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

MON - WED, MARCH 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience:  Attend expert-led panel discussions and fireside chats  Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts   Grow your network […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Frax report cover.jpg

Research

Frax saw continued development in its frxETH liquid staking derivative and Fraxlend money market throughout 2023. Frax V3 introduces an RWA strategy to drive utility to the protocol's cornerstone product, the FRAX stablecoin.

article-image

MicroStrategy discloses the purchase of 16,000 bitcoin throughout November

article-image

Digital asset firms face potential new regulatory landscape under Treasury’s proposed authority expansion

article-image

Uniswap Labs will be providing trading APIs to Talos investors through Fireblocks

article-image

DYDX supply will climb by up to 80% after the Friday unlock, but a couple factors make a massive sell-off appear unlikely

article-image

Switzerland-based Pando Asset, which has crypto products trading on the SIX Swiss Exchange, now looks to the US

article-image

Binance does not hold the required licenses to advertise and serve customers in the Philippines, the country’s securities regulator said