A ‘speculative appetite’ may push memecoins higher: GSR
Plus, Blockworks’ Jason Yanowitz thinks we’ll see some “really fun stablecoin competition for the first time in years”
Jiri Hera/Shutterstock modified by Blockworks
Today, enjoy the Empire newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. Subscribe to the Empire newsletter.
We’re here. We’ve made it to Friday. For those of you still traveling back from Token2049, I hope your flight was much more peaceful than the last one.
Fall is just around the corner, so have a nice, restful weekend and we’ll see you here bright and early next week.
— Katherine Ross
So far, so good
Remember how everyone was so worried about September at the end of last month?
Well, maybe that was a tad overhyped.
GSR’s Toe Bautista thinks that “crypto could display outperformance and buck its recent seasonality woes” depending on how equities perform.
Obviously, the macro environment has benefitted bitcoin so far this month, and it’s up 6% since the Fed announced a 50 basis point cut. Though, funnily enough, solana outperformed bitcoin, jumping nearly 12% in the same time span.
But let’s zoom out: 24 hours is nothing when we’re looking at the bigger picture.
In the last 30 days, bitcoin and dogecoin are the only two on GSR’s crypto leaderboard to stay in the green. On the other hand, solana is flat.
“Throughout 2024, altcoins have generally lagged behind bitcoin’s price, and unless there is an unexpected catalyst, this pattern is expected to continue. However, sustained strength in equity markets should provide continued upside for all crypto assets,” Bautista noted.
Over the past 30 days, memecoins have proven to be resilient even as folks wonder if we’ll ever see another altcoin season. In comparison to other categories, memes are up 26%. Meanwhile, gaming and entertainment is only up 9%.
“Memecoin strength may continue due to the recent surge in speculative appetite,” he continued. “On the other hand, DeFi sits in an awkward middle ground. A Trump election win likely leads to regulatory easing, offering potential DeFi outperformance, while a Harris win could bring continued hostility. Idiosyncratic memecoins may outperform in the short term due to speculative fervor, but sustained outperformance remains in question with an uncertain political backdrop.”
But it might be a tad too early to celebrate these 30-day numbers (and not just because it’s nearly October). Glassnode’s weekly onchain report found that investors are feeling stagnant right now.
“HODLing remains the primary investor dynamic, with all measures of actively tradable supply declining and large volumes of coins maturing into Long-Term Holder status,” Glassnode wrote.
Okay, I also have to point out stablecoins, even though I know we’ve talked a lot about them recently. As Glassnode noted, the current capital could be a readthrough to investor demand (or lack thereof).
“The divergence between a range-bound bitcoin market cap and a growing stablecoin supply has pushed the SSR Oscillator to a historic low. This suggests that investor stablecoin-based buying power is increasing, with a recursive effect where higher purchasing power can lead to an improving demand side in the future,” Glassnode wrote.
All eyes still remain on the November election, though crypto’s macro ties continue to prevail.
Let’s hope that, by Christmas, we have a better idea of where this market’s going.
— Katherine Ross
IYKYK
Empire hosts Jason Yanowitz and Santiago Santos were both in Singapore for Token2049 this week, which led to a very cozy episode of Empire.
The trip, if anything, seems to have boosted Yanowitz’s bullishness on Asia’s crypto scene.
The “sheer number” of people using crypto in Asia is “hands down bigger than the United States,” Yanowitz said.
We wrote about the newest stablecoin, a yield-bearing stablecoin from BitGo, in Thursday’s edition, and it’s something that Yanowitz has his eye on too.
“So I think actually we’re gonna see some really fun stablecoin competition for the first time in years,” Yanowitz noted, specifically citing the entrance of yield-bearing stablecoins.
And Asian crypto exchanges are really benefiting, the two noted. The US has Coinbase and Kraken, but Asian exchanges like Bybit outshine them. Yanowitz noted that Bybit is set to rake in $3 billion in profit this year.
To put that number in perspective: Coinbase reported a whopping $3.1 billion in revenue last year with only $95 million of profit.
And now you know.
As was pointed out in today’s Empire, Tron is considered to be super-popular in Asia.
So much so that Tron is second only to Ethereum for user fees spent, having raked in $1.29 billion this year compared to $1.86 billion. Solana users have, meanwhile, paid less than $330 million.
Tether is Tron’s secret to success. On Ethereum, most fees come from apps: DEXs, aggregators and swap protocols like Uniswap, MetaMask and 1inch, as well as Telegram trading bots like BananaGun and Maestro.
Over the past 30 days, USDT and USDC together contributed only 7.5% of the total fees burned on Ethereum mainnet, half that of Uniswap.
Tron onchain activity, meanwhile, is overwhelmingly USDT transfers. 94% of all smart contract calls on the network right now are to Tether — a number that’s been steady in the past few years — with the bulk of the rest going to token launchpads.
All those calls have translated to over 2 million USDT transfers per day, equaling anywhere from around $5 billion volume to almost $18 billion.
It’s hard to say whether all that activity is truly coming out of Asia specifically. I have a theory: that users in countries experiencing rampant inflation, particularly Nigeria, could be contributing just as much.
The chart above plots the number of USDT transfers on Tron by the hour over the past week. Notice that USDT activity is at its highest at midday UTC — 1 pm in Nigeria, prime foot-traffic hours for stores and sellers — and at its lowest at midnight UTC, or 1 am local time.
You can find the same chart, but also mapping Singapore and New York local times, here. Just click the swatches at the top to toggle the time zones to see they don’t align so neatly.
— David Canellis and Katherine Ross
Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.
Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.
Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.
The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.
