DV Chain — Weekly Commentary — Feb 26, 2024
Market Recap
● Heading into the ETH Denver conference, which kicks off this week, ETH/BTC reached new highs for the year, with expectations of numerous news and announcements emerging from the event.
● Risk-on sentiment continues, evidenced by the Nikkei 225, S&P 500, and Euro Stoxx 600 all reaching new highs last week.
● $STRK went live, opening up at a whopping $40B FDV, but quickly corrected down over 50% with no end in sight as the team and investors faced significant backlash over the unlock schedule and TGE which was technically 2 years ago
o The team and investors quickly announced a change in unlock schedule in response to this, helping $STRK price stabilize around 18B FDV
● Most alts slid last week
o SOL down ~10% on the week as news of FTX estate shopping their locked SOL along with their anthropic stake is making its rounds
o Modularity stack coins such as $TIA and $DYM were notably weak falling 13% and 19% week over week respectively
o Top performers of past weeks including $SUI and $SEI were notable underperformers this week as well, showing that the recent altcoin flows are quite rotational
● UNI fee switch was proposed, $UNI ripped from $7 to highs of $13 on the news
o Dex tokens all traded up, even though some already had fee distribution in place and wouldn’t incrementally benefit from this development and potential precedent set by Uniswap (ie $DYDX, $GRAIL)
o We believe this is potentially a good tailwind for $LDO, as it’s a top earning protocol at the moment with no value accrual mechanism to the token just yet
● Reddit announced that it added crypto to balance sheet in a filing as they prepare for IPO
o The amounts were said to be immaterial
o “We invested some of our excess cash reserves in Bitcoin and Ether and also acquired Ether and Matic as a form of payment for sales of certain virtual goods, which we may continue to do in the future” (Source: S-1 Filing)
● Avalanche stopped producing blocks. The outage lasted about 5 hours
● Microstrategy bought additional 3,000 bitcoin, taking total holdings to 193,000 BTC
● $NVDA’s earning beat sent equity indices higher but also sent AI tokens soaring
o $WLD hit ATHs, $RNDR, $FET, $AGIX all traded well
o Of these, $RNDR is the most commonly listed on the retail platforms DVC faces — we saw internal retail flow RNDR quadrupling last week
● Grayscale filed for privacy etf
o Privacy tokens seem to be a forgotten and written off category of mostly Dino tokens that may re-emerge as advancements are made in ZK technology
Upcoming Catalysts / Trade Ideas
● $AVAIL is anticipated to announce their airdrop soon
o direct competitor along with Eigenlayer, to Celestia, so we expect continued dilution to the modularity stack tokens
● $MATIC (continued from previous weeks)
o Continued to outperform for the second week in a row while internal retail flows continued to trend up. We think the strength continues
o Upcoming token migration to $POL, with a new set of tokenomics
▪ $POL staking for airdrops (potentially $Avail?)
o AggLayer narrative emerging
o MATIC has traded heavy over the past few months, but it outperformed amongst large cap tokens this past week
▪ we believe it’s a turnaround in narrative and sentiment for the token and it will continue to trade well into its numerous upcoming catalysts
● $DUSK (continued from previous week)
o As a ZK L1 priced at 137mm Market Cap and 152mm FDV, we think Dusk is undervalued relative to many competing L1 tokens
o RWA
▪ real world assets, a relatively new narrative in crypto, seems to have staying power (ie Larry Fink shilling tokenized assets), and we think Dusk will greatly benefit from this as it’s one of the areas the team is focused on
o Privacy
▪ Grayscale just filed for a privacy ETF
o Incentivized testnet just went live, mainnet slated for Q2
▪ we think the token will trade well as it continues to execute well on its roadmap
● Eigenlayer (8.3B TVL) is potentially the hottest thing in crypto right now
o While the airdrop date is unknown, it’s speculated to be relatively soon
● $LDO
o We think $LDO is poised to outperform as it should benefit from a re-staking narrative that’s heating up into the Eigenlayer airdrop
o Having a whopping $30B in TVL, LDO arguably is the biggest beneficiary from the Uniswap fee switch proposal, but the token didn’t seem to react to the Uniswap news just yet
▪ we believe that as the market digests the news and if the proposal actually passes, there’s good odds that a $LDO fee switch narrative emerges
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