Author: Zixi.eth Source: X, @Zixi41620514
We recently made a macro material. Recently, in the blockchain industry, it is time to decide the overall primary and secondary investment direction, similar to the end of December 22. At present, all tokens except BTC and Solana have performed relatively averagely, and the market reaction is cold, thinking that the bull market may be over. But we are still optimistic about the market in the second half of this year and next year. In this market with the most serious long-short divergence, whether it is primary or secondary, as long as you make the right direction, it is the most profitable time.
Therefore, I will first put forward our core views on the market and give some opinions on the four mainstream tokens.
TL:DR:
Whether it is the interest rate cut in September, the SEC's regulatory policy, or Trump's support for crypto, from the perspective of the US economy and politics, it is a big boon to the crypto market.
Analogous to the past two cycles, the current bull market is Stage 1, that is, Bitcoin leads the rise, Bitcoin market share increases, and the market share of Altcoin. (See Figure)
In the past six months, holding BTC is still the best choice, but in the second half of this year, you can consider replacing it with ETH or Solana. Since the ETF was approved, the ETF has increased its holdings by 303,000 BTC in six months, holding a total of 950,000 BTC, accounting for 4.5% of all BTC. In addition, for BTOEcosystem, in the past six months, we believe that the only way to focus on developing how to provide BTC Holder trustless financial management and liberate the liquidity of large investors is correct, which can be seen in the data of SolvProtocol.
ETH is very suitable for building a position in the second half of this year. After ETH began trading on Nasdaq on July 23 this year, it will repeat the process of Grayscale selling BTC at the beginning of this year. The selling process may last for half a month to one month until the market can catch Grayscale's selling. Once this critical point is reached, it is a very good time to build a position. We recommend paying attention to the BTC/ETH exchange rate in the second half of this year. Once Grayscale's net outflow ends, it is time to build a position (the logic refers to the process of Grayscale's BTC net outflow ending in February this year and BTC rising 20%-30% in one month).
We are still optimistic about Solana in the long term. There are hot products every quarter. Those who have goods should still hold them firmly and not sell them. Those who don’t have goods can consider building positions at low prices. Their 2C ecological construction capabilities are really strong. FTXLiquidation solved it perfectly in the first half of this year. The cost price is 80, and the current price is 170-180. Now it has begun to unlock. It is the most correct decision we made in the second-level OTC in the first half of the year. In addition, SolanaETF has also been submitted, and it is expected to make progress next year. The SEC also cancelled the judgment that Solana is a security. Following the DePIN hit at the end of last year, Solanaecosystem launched another hit this year, Pump.fun (one-stop meme coin + casino), with a daily income of one million US dollars and a half-year income of 80 million US dollars.
We are bullish on Ton in the short to medium term, but we need to observe in the long term. I am still very cautious about OTC at the current price, but you can consider buying it directly in spot. We have the opportunity to make money on Ton, but our chances are relatively small for Tonecosystem.
1. The money in the crypto comes from the capital pool of the financial market
Under macroeconomic regulation, such as when interest rates are cut and money is printed in large quantities, these funds will naturally flow to the trading market. Since 2020, the crypto market has begun to be highly positively correlated with the U.S. stock market. Since the crypto industry grew into a trillion-dollar track in early 2021, it has been closely related to macro interest rates. In the 17-20 cycle, it was not related to interest rates because the volume was too small. The amount of hot money in the market can be measured by the amount of stablecoins minted. At the end of 2021, the number of stablecoins in the entire market reached an ATH of 162 billion U.S. dollars. Even after half a year of rising offensive, the stable amount is still only 150 billion U.S. dollars.
2. The U.S. unadjusted CPI annual rate in June was 3.0%, far below the market expectation of 3.1%, and fell sharply to the lowest level since June last year.
The US June unadjusted CPI annual rate was 3.0%, far below the market expectation of 3.1%, and fell sharply to the lowest level since June last year. The monthly CPI rate after seasonal adjustment in June was -0.1%, the first negative value since May 2020. The market is betting on the possibility of a rate cut in September, which has reached 90%+. According to CICC's macro materials, this round of rate cuts is mainly to return interest rates to a neutral level. Macro analysts believe that the reasonable US Treasury bond interest rate is 4%, corresponding to a rate cut of 100-125 bps. The time for this round of benchmarking should be 2019.
3. After the shooting, Trump's chances of being elected president according to Polymarket polls have reached 60%+.
Trump's monetary policy in his second term is still to pursue a substantial interest rate cut and balance sheet expansion, which will lead to an increase in inflation, which is usually a major boon to the crypto market and the U.S. stock market. In addition, Trump opposes the new energy industry and advocates boosting the traditional energy industry. Mining is currently a major consumer of traditional energy, which is why he is very concerned about Bitcoin production capacity - he wants all future bitcoin to be minted in the U.S.
Trump was rather contemptuous of crypto in 2019 and had little understanding of the industry. In December 2022, he issued his own NFT card. In 2024, he began to hold crypto, with assets exceeding 10 million, including $3.5 million of TRUMP (meme), $3 million of ETH, and some meme coins. At the Bitcoin Conference in Nashville, Trump had a very wonderful speech (odaily.news/post/5197170). How much of the content can be cashed out is still a matter of opinion.
In addition, we can look at the recent attitudes of the SEC, which are generally optimistic.
4. The market value of stablecoins reached the lowest circulating market value of this cycle on October 2, 2023, which is 121.1 billion US dollars.
Now it has rebounded to 155.8 billion US dollars, a year-on-year increase of 28%, which means that 34.7 billion US dollars have actually flowed into the market. The inflow of only 34.7 billion US dollars has led to:
BTC has grown from $545 billion to $1.2 trillion today, a 120% increase (not only due to the inflow of stablecoins, but also due to the massive buying of ETFs.)
ETH performed the weakest, increasing from 208 billion to 390 billion USD, an increase of 87%.
Altcoin performed second, growing from 235.6 billion to 490.1 billion USD, an increase of 108% (new projects were launched, so the growth here is somewhat exaggerated)
5. The performance of the above tokens is in line with the reservoir model we talked about before, and the liquidity is gradually decreasing. The reason why Ethereum's performance in the past six months is not as good as Bitcoin is:
From the perspective of the new narrative, apart from staking (Lido) + restaking (Eigenlayer) + LRT this year, Ethereum has not had any substantial innovation in infra and business model, but has been constantly repeating the same thing.
Ethereum's technical expectations are gradually coming to an end. In the ETH/BTC growth phase from 2021 to 2022, everyone was optimistic about Ethereum because with the continuous growth of users, Ethereum Gas was extremely expensive (GWEI was usually above 70 at the beginning of 21-22, a transfer tx was 2-3 u, and an NFT interaction was at least 50-100 u). Therefore, everyone started to do op/zk L2. After two or three years, although L2 has shared a large part of the interaction pressure for the mainnet, the mass adoption that everyone hoped for at the time did not appear. On the contrary, doing L2 is no longer a technical issue, which caused the L2 with a high valuation in 22/23 to fall continuously after the coin was issued.
BTC has passed the ETF and has buying from Nasdaq, but ETH had not passed the ETF six months ago.
Liquidity is still insufficient and is far from reaching the point of liquidity overflow.
6. Regarding BTC (and its ecosystem), although the macro outlook is optimistic in the long term, you can consider exchanging it for ETH/Solana in the second half of this year:
From the perspective of the six-month timeline, the inflow of BTC ETF is still quite healthy. The ETF holds about 950,000 BTC, with an increase of 303,000 BTC in six months, and ETF holders account for 4.5% of the total BTC.
Trump pays close attention to BTC. This can be seen from his attitude towards mining, energy, interest rate cuts and regulation at the Nashville conference.
The impact of interest rate cuts on BTC should be the greatest, and funds will flow into BTC first.
BTC Ecosystem has stalled a bit, but Trustless has shown that it can provide BTO Holders with U-based/Sansai coin-based financial management. Ecosystem projects are all relying on Babylon. If Babylon can cooperate with traditional ETFs and bring BTcSecuritysharing to other POS chains to provide security services, it will be a great benefit to Babylon's ecological projects.
7. For ETH (and its ecosystem), the short-term outlook is bearish, as ecosystem innovation is stagnant, but the medium- and long-term macro outlook is positive.
The SEC believes that ETH is not a security but a commodity, but STETH is a security, which is not a good thing for StakingFi related projects (such as Lido).
If Grayscale repeats the process of selling BTC in the early days, the growth of ETH in the first half of the month will most likely not be good. Grayscale sold 600,000 BTC to only 300,000 BTC in half a year, selling 18 billion US dollars at an average price of 60,000. Grayscale still has 7.4 billion US dollars of Ethereum on hand, and it needs to wait for the market to digest it.
All the (asset) innovations of Ethereum in this round are based on Eigenlayer. Ethereum’s staking ratio has reached 28.21% in the past four years, and its restaking ratio has reached 4.8% in half a year. Eigenlayer is an asset innovation, which is a typical self-congratulatory type.
Appchain-type RAAS is still built on Ethereum, and infra has been very well done. Ethereum’s appchain may be a hot product in the future.
8. Solana is promising in the long term, with explosive products every quarter.
FTXLiquidation has been successfully resolved and has started linear release in July. The average daily selling pressure in the market is between 3.6 and 4 million US dollars (180-190 prices).
Solana ETF has already submitted an application and it is expected that the ETF may be approved in 2025.
The 2C ecosystem is getting better and better, and the user experience is very smooth. It once surpassed Ethereum to become the largest on-chain casino. Pumpfun has become the most successful application product in the past six months (pump.fun/board), with a cumulative revenue of 80 million US dollars and a daily profit of one million US dollars.
9. Ton is bullish in the short to medium term, but is limited by the liquidity of chips and whether the ecosystem is sustainable, so it remains to be observed in the long term.
1. Following our previous point about Ton, Ton has the opportunity to grow, but the Ton ecosystem may not have the opportunity. The Ton ecosystem can be seen as a wilder and less regulated WeChat applet ecosystem. Most of the games currently developed are brainless games, tap 2 earn, idle 2 earn, etc., and most users are airdrop hunters. Limited by the product game model, the actual on-chain interaction conversion rate of web2 users does not exceed 10%. Although there are phenomenal game products, they are not sustainable. The project is basically over after one day of airdrop distribution.
