Casey Wagner

As traders begin to turn cautiously optimistic that 2022’s bear market is fading at last, alternative coins — altcoins — have gotten off to a good start this year.&nbsp;



Tokens including <a href="https://blockworks.co/price/RPL">Rocket Pool</a>, OKCoin’s <a href="https://blockworks.co/price/OKB">OKB</a> and <a href="https://blockworks.co/price/OP">Optimism</a> have each hit all time highs — either against <a href="https://blockworks.co/price/BTC">bitcoin</a> or the dollar — so far this month, potentially setting the scene for a major turnaround in 2023.&nbsp;



Optimism hit its highest point yet against the dollar on Sunday, along with Aptos’ <a href="https://blockworks.co/price/APT">ATP</a> token. Aptos, launched in 2022 and backed by a16z and FTX Ventures, booked a welcome turnaround last week, after the PancakeSwap community <a href="https://pancakeswap.finance/voting/proposal/0x959b9da76401a7a3fb73e417b69ef51859383bd523d887350ae9f69148fc26a8" target="_blank" rel="noreferrer noopener">approved</a> deployments on the layer-1 blockchain.&nbsp;



Optimism has posted a <a href="https://blockworks.co/news/arbitrum-optimism-exceed-ethereum">major increase</a> in daily active users so far in 2023, contributing to a price increase of more than 6% over the past week.&nbsp;



Martin Lee, a data journalist at Nansen, previously told Blockworks that as time goes by, ecosystems like Optimism are becoming more developed — perhaps one reason behind their increased interest, as demonstrated by growing transaction volumes.&nbsp;&nbsp;



Rocket Pool’s RPL and Frax’s <a href="https://blockworks.co/price/FXS">FXS</a> also have posted strong starts, with RPL hitting an all-time high against bitcoin on Jan. 18. FXS — while still a ways off from records set a year ago, is up nearly 150% year to date.



“Both FXS and RPL have shown impressive strength due to their liquid staking derivatives, which enable investors to earn a yield on <a href="https://blockworks.co/price/eth">ETH</a> without having to go through the trouble of setting up validators on their own,” said <a href="https://twitter.com/0xpibblez" target="_blank" rel="noreferrer noopener">Spencer Hughes</a>, an analyst at <a href="https://www.blockworksresearch.com/?ref=blockworks.co" target="_blank" rel="noreferrer noopener">Blockworks Research</a>. “With ETH yielding [more than 6%] after the transition to proof of stake, these protocols&#8217; tokens are trading higher on potential growth in revenue.”&nbsp;



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/12526949/embed#?secret=QSLL8dqvUn" data-secret="QSLL8dqvUn" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">RPL already set a bitcoin record high, will USD be next? | Chart by David Canellis</figcaption></figure>



<h3>Not just altcoins</h3>



Rocket Pool could also be surging because of higher beta trades for those catching onto the liquid staking derivative (LSD) narrative as it heats up toward the Shanghai upgrade, according to <a href="https://www.blockworksresearch.com/?ref=blockworks.co" target="_blank" rel="noreferrer noopener">Blockworks Research</a> analyst <a href="https://twitter.com/purplepill3m" target="_blank" rel="noreferrer noopener">Ren Yu Kong</a>. Ethereum’s Shanghai upgrade, which will enable validators to finally withdraw their staked ether, should help bring better price parity for LSDs, according to a recent <a href="https://www.blockworksresearch.com/research/ethereum-roadmap-part-1-the-merge" target="_blank" rel="noreferrer noopener">research note</a>.



Another factor could be MetaMask launching an integration that would allow ETH stakers to stake directly to Rocket Pool through the portfolio site.&nbsp;



<a href="https://blockworks.co/price/gmx">GMX</a> hit record highs against bitcoin in mid-December; <a href="https://blockworks.co/price/gns">GNS</a> set its own against bitcoin on Dec. 4 and now trades around 4% below its all-time peak, relative to the dollar. 



Trust Wallet (<a href="https://blockworks.co/price/twt">TWT</a>) also peaked against the dollar in December, while <a href="https://blockworks.co/news/ton-standout-in-rocky-crypto-markets" target="_blank" rel="noreferrer noopener">Toncoin</a> (<a href="https://blockworks.co/price/ton">TON</a>) set its own record against bitcoin around the same time. Binance Coin (<a href="https://blockworks.co/price/bnb">BNB</a>)’s bitcoin price briefly topped out in late November as Binance <a href="https://blockworks.co/news/1-binance-ftx-deal-is-off-unless-ftx-us-is-part-of-the-package-source" target="_blank" rel="noreferrer noopener">weighed an FTX acquisition for $1</a> — a non-binding offer that was later rescinded.&nbsp;



The altcoin rally comes as traders are getting more bullish on broader crypto markets.&nbsp;



Bitcoin and ethereum both have stayed in the green of late, each rallying more than 30% since the start of 2023. If <a href="https://blockworks.co/news/crypto-needs-central-bank-pivot" target="_blank" rel="noreferrer noopener">monetary policy</a> continues to head in the dovish direction analysts are expecting, even more growth could be in the pipeline.&nbsp;



There’s likely to be “much greater support for digital assets by investors,” if and, and perhaps when, “monetary policy reverses in the second half of the year,” according to James Butterfill, CoinShares’ head of research.&nbsp;



“It will also be the point at which the momentary higher correlation between risk assets such as equities and digital assets will degrade,” Butterfill wrote in a recent research note.&nbsp;



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