One of the most interesting things about this field is that you will have countless projects to look at every day, various news and information every day, various fun and interesting things every day, and stories about people getting rich and people going bankrupt every day...
For example, a few days ago everyone was still discussing CZ going to jail, and these two days everyone has been paying attention to information about airdrops, because LayerZero is finally going to airdrop and Friend Tech has officially issued its tokens.
LayerZero has completed the first phase of the snapshot. It is said that the total number of users participating in the interaction is about 5.8 million. However, after the airdrop news came out, it attracted a lot of criticism, especially the so-called anti-sybil measures against the project. Today, I saw that Boss Heng in the group also shared a more interesting picture. As shown below.
There are even many jokes on the Internet, such as: The biggest beneficiary of this wave of LayerZero airdrop is the worker of LuMao Studio, who can get rich by simply reporting the boss's address.
As for Friend Tech's token issuance, it feels more bumpy. In addition to many users reporting through social platforms that the claim page always prompts failures, resulting in the inability to receive tokens, the price after the opening is even more soaring and plummeting. After the Base chain began trading, the price of FRIEND tokens soared from $3 to $169 in a short period of time, and then fell rapidly to around $3. As of the time of writing this article, the price is $1.8. As shown in the figure below.
Speaking of airdrops, it seems that I haven't written any tutorials on airdrops for a while. Yesterday, I saw some friends leave messages asking me why I don't update airdrops. Actually, it's not that I don't update, but I haven't updated recently. First, it's because my personal time and energy are limited and I haven't paid much attention to new airdrop projects recently. Second, it may be because I need more time to think about other things. When I have time and energy later, I will continue to consider updating the content on airdrops.
At present, what I can do in my spare time is to complete an average of 2,000-3,000 words of text output per day. To be honest, it is really difficult for one person to cover all fields. Since I decided to start writing articles for the self-media "Hua Li Hua Wai", it has been almost 2 years. The reason why I can continue to output is more based on my original intention (to let more people understand the real blockchain) and my personal interest. Of course, I still need to consider the hundreds of partners in the group. When the current group is full, I will not open any new groups. At that time, I will also transfer part of my energy from writing articles to sharing and communicating in the group. First, because my personal energy can only maintain two groups at most, and second, I think it is enough to accompany hundreds of partners (<1,000 people) who are also passionate about this field to welcome the future of blockchain. Small and beautiful is good. I don’t really want to be a blogger of 100,000 or 1 million.
It seems that we have gone off topic again, so let's get back to the topic of encryption. In the field of encryption, there are many ways to understand the market. For example, some people like to use news to understand the market trend, and some people like to use on-chain data to understand the market trend. The essence of the market is actually the flow of money, so if you can figure out where some money goes, you can basically grasp the possible direction of the market.
In an analysis article on the root causes of market ups and downs last month (April 17), we also specifically sorted out some content about stablecoins and current market liquidity issues, and at the end of the article we also wrote: What the bull in the current market really needs is more "water", you just need to keep an eye on the source of the water, such as the growth of stablecoins, ETF capital inflows, and the Federal Reserve's monetary policy.
Stablecoins represent the basic liquidity of the crypto market, while ETFs mainly represent the money of some institutions (including individuals). The monetary policy of the Federal Reserve is not to mention, which directly leads to the direction of the US dollar. What we need to do is to keep an eye on the movement of these funds as much as possible. Next, we will continue to expand and make a summary.
1. About the development of stablecoins
Last year, we mentioned in our article that this year (2024) will be an important turning point in the crypto market, and we may usher in a new round of huge growth cycle.
Since the beginning of the year, we have actually witnessed many important moments, such as the approval of the Bitcoin ETF, which directly pushed the price of BTC to a record high (this process was also accompanied by geopolitical wars, which led to the price of gold reaching a record high). In addition, the approval of the Hong Kong ETF has also allowed more people here to see new hope.
In fact, everyone in this field understands that although there are many projects, concepts, and technologies in this field, any project and technology is ultimately aimed at achieving "transactions". This brings up a topic that cannot be avoided: stablecoins.
It is no exaggeration to say that stablecoins are the core component of the entire crypto market "transactions". So the question is, who can have the final say in stablecoins?
Judging from the on-chain data, the top three stablecoins are USDT, USDC and DAI, as shown in the figure below.
What we need to understand here is that USDT, which is currently ranked first, is not compliant with US legal regulation (even though the stablecoin is also based on the US dollar). Although the parent company of Tether (iFinex), the issuer of USDT, is a compliant company in Hong Kong, the new problem is that Hong Kong will most likely implement its own stablecoin laws in the future (and Hong Kong will be regulated by the US AN law again). But we can't say much about the problems in Hong Kong, we only talk about the United States here, so if we extend this idea, we can also foresee that future stablecoins will most likely need to be implemented in accordance with the standards set by the US government, otherwise they may face "illegal" problems.
Of course, this does not mean that USDT will have problems. At least in our opinion, USDT will still be the main transaction in this field in the next 3-5 years. In this process, USDC may gradually replace USDT. By then, most trading pairs in the crypto field (including exchanges) will definitely gradually migrate from USDT to stablecoins that comply with US regulations. This is the general trend.
Although the largest exchange in the universe has been trying to change all this, for example, An An once issued BUSD to replace USDT, but it died directly in 2022 due to US regulatory issues. Then An An, unwilling to give up, promoted TUSD again, but was also forced to stop due to US regulatory issues. Later, An An was still unwilling to give up and started to promote FDUSD again, and now CZ is in. And there is another problem with the FDUSD stablecoin. Its so-called compliance with Hong Kong regulation only means that its issuing institution complies with Hong Kong regulation, but whether FDUSD itself complies with Hong Kong regulation is still an open case. As we mentioned above, Hong Kong's regulatory laws are still unclear.
But no matter what, the largest exchange in the universe has tried, and it seems to be of little use at present, so other exchanges don’t need to try to “resist” anymore. In the future, there may only be two types of exchanges, one is an exchange that complies with US regulation (using stablecoins that comply with US regulation), and the other is an “illegal” exchange (continues to use USDT stablecoin). Of course, if another major country personally intervenes, the situation may be different, but it is unlikely.
In short, we can continue to focus on the flow of USDT + USDC for now, and in the future we should pay more attention to the liquidity of USDC (or possible new stablecoins that comply with US regulations).
Judging from the current on-chain data, USDT funds are currently mainly concentrated on the four chains of Tron, Ethereum, Avalanche, and Solana, while USDC funds are currently mainly concentrated on the four chains of Ethereum, Base, Solana, and Arbitrum. As shown in the figure below.
Among the above chains, except for TRON, which is mainly used for transfers and has no good ecological projects, other chains have gathered the largest amount of funds, which means there may be greater opportunities. Just keep exploring. In addition, in previous articles of Hualihuawai, many potential projects have been sorted out for Base, Solana, Arbitrum, and Avalanche ecology. Interested friends can directly search historical articles for them.
2. About ETF fund inflows
We will not discuss Hong Kong in detail. Here we will continue to review the inflow/outflow of funds from US ETFs.
In the previous article of Hualihuawai, we have mentioned that US ETFs have almost become one of the most important factors affecting the market, and have even become a new sentiment indicator. Through the performance in the past few months, we can basically see that when ETFs continue to have net inflows and generate large inflows, the market will perform well, but when ETFs begin to turn to net outflows or generate large outflows, the market may fluctuate or fall.
But many people who pay attention to the inflow and outflow of ETFs are really just looking at the above data. What I want to say is that we should not only pay attention to the macro data on the inflow and outflow of funds, but also pay attention to and explore the corresponding institutions. What exactly have they done or are doing?
Here we take BlackRock, which everyone may have heard of, as an example:
First, through on-chain tools, we can find that BlackRock currently holds approximately $17.3 billion in crypto assets in its public addresses, including $17.23 billion worth of BTC, $86 billion worth of USDC, etc. As shown in the figure below.
Secondly, what we need to do is to study the tokens of the currencies they hold (small holdings can be ignored). For example, the RWA track that was popular some time ago was actually driven by BlackRock. So, if you find that BlackRock also holds other currencies you are interested in, you can further explore the opportunities of the tracks and currencies associated with it.
And there is also an underlying logical problem here, that is, since BlackRock has focused on deploying a certain track, it can also be indirectly explained that the various types of encrypted assets derived from the corresponding track will theoretically be within the scope of American supervision. Such encrypted assets will definitely not have any major problems in the long run (at least they will not be delisted).
Next, let’s briefly list a few currencies that BlackRock currently holds:
The first project is Ispolink (ISP)
Ispolink is a Metaverse-based cross-chain platform for developers that enables blockchain, Metaverse, DeFi, and gaming companies to easily find top technical talent, and helps blockchain companies connect with industry-leading talent through advanced AI algorithms.
The second project is Galileo Protocol (LEOX)
Galileo is a platform for tokenization and redemption of physical assets, an open source infrastructure for executing smart contracts developed by Galileo Network LLC. It allows the creation of "pNFTs" representing physical goods, which are issued on multiple chains and can interact with any blockchain, DLT and network. In a nutshell, it is an NFT tokenization platform that binds physical assets in the field of asset tokenization market. This project has also been specifically introduced in previous articles of Huali Huawai. As shown in the figure below.
The third project is Realio (ROI)
Realio is a real estate-based RWA, and assets can be transferred across different blockchains. It also has dual tokens, namely RIO and RST. Among them, RIO is mainly used to facilitate fee payments, staking and transactions. RST holders can receive rewards and have voting rights. As shown in the figure below.
Here we simply list 3 projects. For more projects, you can learn more about them by combining the above list of BlackRock’s holdings and the historical articles of Huali Huawai (or directly searching for project information on Google). Another point to be reminded is that the information found through the on-chain tool is only the part of BlackRock’s currently public investments. In fact, many of their investment information has not been fully disclosed.
3. About the Federal Reserve’s monetary policy
2024 is destined to be an extraordinary year, and regarding the development direction of the market, the most anticipated major event at the moment may be the Federal Reserve’s expected interest rate cut.
And if we add up some of the current things, such as the continued geopolitical wars, the record high gold prices, the yen hitting a 30-year low, the continued depreciation of other countries' currencies, the US election before the end of the year... In fact, the Americans have already launched a full-scale dollar war in the financial field.
But those who know history actually know that this is not the first time that the Americans have done this. But this financial war seems to be a little different from the past, because from the perspective of the crypto field, the Americans seem to have shown great "attention" to the crypto market this time. In addition to the major American institutions mentioned above that continue to increase their chips in the crypto field, the American upper class seems to have participated in the crypto field from a higher dimension and directly acted as the customizer and referee of global blockchain rules. They even directly invited the founder of the largest crypto exchage in the universe (a non-American) to a prison in the United States to eat a set meal.
In short, regulation of the crypto market is definitely a major trend. In the future, we may see more and more new US bills targeting this field. This was also mentioned in Hualihuawai’s article last year (2023), as shown in the figure below.
The year 2024 may be the worst year in some aspects of the world, but it may also be the best year for opportunities in the entire crypto field. Grasp where the "money" goes, fasten your seat belts, hold on to the cake in your hands, and wait for the climax and excitement of the roller coaster!
Okay, we will share the content of this issue here for now. This is also the 450th article updated by Huali Huawai. We will continue to bring you more related sharing in the future. Interested friends can check and learn more content through Huali Huawai.
Note: The above content is only personal opinion and analysis, and is only for popular science learning and communication purposes. All projects mentioned in the title or text have no interest relationship with Hualihuawai and do not constitute any investment advice.
About us: Hualihuawai is an independent and autonomous We Media platform, mainly for sharing some knowledge related to the encryption field. In addition to publishing articles from time to time through Hualihuawai, we currently have other communication channels and auxiliary learning tools, including mutual aid groups, e-books, emoticons, etc. For more information, please click: https://senlonlee.notion.site/b675992eca0c4a3e99456e62961e8969
