🟣 Resume Up Only?

A healthy market reset is just what the doctor ordered.

March 26, 2024

A big GM to the newsletter enjoyers!

We saw a nice rally to begin the week yesterday, with BTC breaking $70k again after dovish remarks from Jerome Powell following the FOMC meeting last week. BTC dominance is still hovering around 54%, which is near its highest level since early 2021, and is generally viewed as a barometer of how frothy the market has gotten. 

Funding rates have experienced a healthy reset after reaching positive triple digits across the board in early March to a much healthier 20-30% range for BTC, ETH, and many alts.

Spot BTC ETF flows data revealed yesterday evening that GBTC continues to cede market share, which saw $350M worth of outflows yesterday versus the net inflows of $15M across all ETFs.

Market participants seem to love following along with the ETF flows, so it will be interesting to see how the rest of this week plays out. BTC and ETH appear to have lost a little bit of momentum to start the day, but it is unclear if this is the market digesting slower ETF inflows. 

The onchain fundamentals look strong, with total DeFi TVL just ~20% from all-time highs at $150B, the USDC supply has reversed its downtrend and is now growing, onchain derivatives volume is crushing historical records, and large institutions such as Blackrock are getting more involved onchain. 

It looks and feels like a bull market to me – probably a top signal.

— Sam Martin (X: swmartin19 | Farcaster: swmartin19)

Base is still suffering from high transaction fees due to the constraints of the EVM/L2 gas limit, with users bidding up gas prices during popular NFT or memecoin launches in order to ensure their transaction’s inclusion. So while EIP-4844 sent Base’s data publishing costs drastically lower, there are clearly limitations of the EVM under the context of execution fees and overall transaction throughput.

Base has seen the largest amount of net inflows over the past few weeks since its official mainnet launch in early August of last year. Most of this activity appears to be memecoin traders, farcaster users, and Friend Tech farmers. But can Base actually handle global scale?

Jesse Pollak, the creator of Base, took to X yesterday to share the immediate term goal of increasing the gas target by 2-3X, and that over the longer term, the goal is to increase this 400x through parallel pathing. This should provide some relief for users in the near term, but in my opinion, it’s only a matter of time before more throughput will be needed.

Parallel Colony is the first major implementation of AI agents in gaming in crypto. The incorporation of AI distinguishes it from other crypto games that have historically been more focused on farming simulators and derivatives of existing games.

Although Ondo Finance has experienced growth stagnation over the past few months, they remain a significant player in the tokenized security space, with their recent multichain expansion and their dive into broader tokenized assets through Ondo GM potentially revitalizing growth.

Base is is posting all-time high transaction counts, stablecoin volumes and unique addresses.

0G separates its data availability system into two different lanes.

The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm’s Financial Disclosures.