The crypto markets have seen a dynamic week with Bitcoin gaining over 5%, despite Tesla transferring $765 million worth of BTC to an unknown wallet. Meanwhile, DeFi protocol Radiant Capital temporarily halted lending services following a $50 million exploit, Singapore’s largest bank introduced tokenized banking services, and Robinhood announced plans to launch BTC and ETH futures trading.
Why Is ETH Lagging Behind BTC?
Since the Federal Reserve’s unexpected 50 basis point rate cut last month, Bitcoin surged by 14%, nearing $70K due to strong ETF inflows and improved risk sentiment. While Ethereum has also gained from positive macroeconomic factors, its ETH/BTC ratio has declined, hitting its lowest point since April 2021. This gap is attributed to slower institutional demand for Ethereum compared to Bitcoin, as seen with the mixed reception of spot Ethereum ETFs launched in July 2024. The open interest in Bitcoin CME futures reached new highs, while Ether futures on CME remain lower, signaling less institutional interest.
Meme Tokens Rising in Popularity
Meme tokens are showing resilience, with their trading volumes averaging $16 billion this year, compared to $3 billion in 2023. They have outperformed other altcoins, growing their share in the top 50 altcoins by market cap from 7% in 2023 to 25%-30% in 2024. The appeal lies in their perceived fairness compared to VC-backed tokens, as they often have fully circulating supplies with no future unlocks, allowing organic price discovery.
Altcoin Liquidity Trends
Liquidity in altcoins is becoming concentrated in a select few, leaving many lesser-known assets as “zombie coins.” With over $155 billion in token unlocks expected in the coming years, competition for altcoin liquidity is intensifying, primarily benefiting the top ten altcoins.
FBI's NexFundAI Token Investigation
On October 9, the FBI charged several entities and individuals involved in wash trading for NexFundAI’s cryptocurrency. Kaiko’s data shows that market makers used bots and multiple wallets for illegal activities, confirming FBI findings.
Trump’s WLFI Token Sale Struggles
Donald Trump’s crypto venture, World Liberty Financial, saw low interest, selling only 650 million of its 10 billion tokens, valued at just over $10 million. The token’s lack of transferability and future uncertainties may have discouraged investors.
ETF Filings on the Rise
ETF applications continue to grow, with Grayscale pushing to convert its Digital Large Cap (GDLC) trust into an ETF, comprising assets like BTC, ETH, SOL, XRP, and AVAX. BTC and ETH dominate, making up nearly 94% of the trust’s assets.
