💡 Welcome back to DV Chain's Weekly Market Commentary! Last week, Bitcoin came close to hitting the $100K milestone, fueled by $3.25B in ETF inflows and a $5.4B purchase by MicroStrategy. As BTC consolidates, signs of an altcoin season are emerging, with ‘Dino coins’ and DeFi tokens gaining traction. Additionally, the dismissal of the Consensys lawsuit and pro-crypto appointments in Trump’s administration are setting a favorable stage for the industry. Dive in for key insights and upcoming catalysts:
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Market Recap
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• BTC was just shy of hitting $100K last week with extremely strong bidding from ETFS which had $3.25 Billion dollars in inflows, as well as Microstrategy buying
  • Microstrategy bought $5.4B last week and likely has more to follow as they just issued $3b in debt

• • The reason Microstrategy is seemingly able to buy large amounts of BTC seems to stem from it becoming a retail favorite stock - it’s literally was the #1 most traded stock on several days last week, doing more volume than even NVDA and TSLA
  • A quick glance at WallStreetBets will show that MSTR is the only stock being talked about
  • It seems that as long as MSTR is trading at a premium to book value, they can keep issuing equity and debt to buy more BTC - following through with their $42B plan they announced during their last earnings call
  • Despite the ~9B of buying between ETFs and Microstrategy, BTC failed to breach $100k while ETH surprisingly outperformed during this period
    • If it plays out like prior cycles, once BTC starts to go sideways, ‘Alt season’ begins, which is what we’re starting to see
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• ‘Dino coins’ (XRP, ADA, XLM) continued to lead last week interestingly, and the rotation games begun
  
  
• Typically during alt season, different categories of tokens will pump, and the money rotates through to different categories
  
  
• With that said, given that Trump’s family has a DeFi project, it’s fair to assume that DeFi will catch a rotation at some time
  
  
• If we examine the open interests in the flavor of the day coins, we can get a sense of positioning and flows that will ripple through different alts
  
  
• At the time of writing this LDO OI sits at just about 100mm, while WIF is 500mm, Bonk $600, and even XLM 300mm in OI
  
  
• If you assume the hot ball of money leaves memes and dino tokens towards ‘quality’, then a lot of the best Defi tokens could pull multiples given how under positioned they are
  
  
• The Consensys lawsuit was thrown out, so its good for ETH and Defi
  
  
• Cantor Fitzgerald struck a deal with tether to own 5%, valuing it at 12B
  • Howard Lutnick, CEO of Cantor Fitzgerald was named secretary of commerce
    
    
• Scott Bessent, another pro crypto candidate was named Treasury Secretary
  
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Upcoming Catalysts
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• $ETH
  • The ETF has been a non factor since the launch and has been a big underperformer this year for that reason, but in the 4 trading days post election we’ve seen that change
  • Future flows aren’t priced in yet, which has been the biggest driver of the cycle
    
    
• $FTM
  • Monad testnet launched, but while there is no token, traders may chase exposure to parallel execution tokens
    
    
• $SEI
  • SEI traded well in the past drawing comps to other high performance L1s, namely when monad was raising, SEI went on a huge rally
  • Now with Hyperliquid TGE imminent, Monad testnet deployed, and FTM sonic upgrade, SEI benefits from the attention towards ‘high performance alt L1s’
    
    
• $LDO
  • DeFi as a sector is going to benefit from the shift in regulatory environment
  • LDO fundamentally is a very strong project, clipping almost $150m in fees on an annualized basis to its treasury
  • It has maintained majority of market share in the LST/LRT space, despite higher temporary yields in new competitor’s liquidity bootstrapping farms
  • From an institutional standpoint, it is much stronger than competitors in terms of safety and network effects. The Lido Dao’s roadmap prioritizes institutional adoption, which we think is an astute plan, given the recent interest in crypto and tokenization from Wall Street
  • It’s likely a Staked ETH ETF will be coming under the Trump admin
  • Fee switch likely incoming
  • Consensys lawsuit thrown out
    
    
• $JTO
  • Along with $LDO, one of the most profitable protocols in the space (see graphic below)
  • Earrings $2-3mm a day in revenue from MEV tips
  • Fee switch likely incoming
  • Benefits from memecoin mania

• HYPE (Hyperliquid) TGE, Q4
  
  
• FTX creditor distributions in Q4 ‘24 - Q1 ‘25

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