Coinbase: Find the next encrypted market catalyst

Author: David Han Source: Coinbase Translation: Shan Ouba, Bitchain Vision Realm

summary

Although the innovation in the chain has reached the level of never before, in the long run, it is beneficial to the cryptocurrency field, but we believe that macro factors may play a more important role in the short term.

Key points

Historically, the decrease of Bitcoin will often start a bullish trend, but these cyclical rise usually accompanied by additional benefits brought by other ecosystem catalysts.

The growing talent reserves, increasingly mature development tools, and continuous scalability of blockchain make a series of vertical fields may become catalysts in this round of cycle.Flow.

In the short term, we expect that with a broader macro environment to steer risk aversion, and the liquidity flowing through ETF is unlikely to turn to Gaobita assets, the dominant position of Bitcoin will remain high.

In addition to the Bitcoin that we have introduced in detail before, the market is looking for new catalysts to maintain the rising in the first quarter of the 24th year of 24 years caused by the US spot Bitcoin ETF.The continuous growth of stable currency issuance and the growth of the DEFI protocol locking the total value (TVL) indicate that the chain activity continues to be strong.At the same time, the continuous platform innovation at the first level (L1) and the second (L2) level, coupled with the improved wallet tool to provide a better user experience, constitutes the most related to the next few monthsThe foundation of some narratives.

In other words, we think that short -term activities are more likely to be promoted by macro factors, although the fundamentals of cryptocurrencies are still strong.These factors are to a large extent as the exogenous factors of cryptocurrencies, including intensified geopolitical tensions, rising long -term interest rates, re -expanding currency, and rising government bonds.In fact, the recent increase in correlation between cottage coins and BTC highlights this, indicating that BTC’s anchoring role in this field, although BTC has consolidated its position as a macro asset.

Although the history of cryptocurrencies is largely regarded as the risk of asset categories, we believe that the continuous elasticity of Bitcoin and the approval of the spot ETF have formed a two -polarized investor group (especially Bitcoin) -mallyOne regards Bitcoin as pure speculative assets, and the other regards Bitcoin as “digital gold” and hedge the political risk of grounding.We believe that, in view of a wider range of macro risks, the growth of the latter camp explains the reduction of the callback range we see so far in this cycle so far.

Mode after halving

The previous halving is usually considered to trigger a cyclical bullish trend, although the direct impact of halving seems to be basically not important in the short term.In fact, the BTC fell 19%within one month after the felling in 2016, and it basically remained unchanged within two months after the decrease in 2020 (see Figure 1).Similarly, we expect that the upcoming halving will not become a dense transaction story, although we think that its correlation in traffic has been ignored -in the $ 63,000 BTC, half of the annual BTC circulation is reduced10.3B, so far, the net inflow of BTC ETF in the United States is $ 12.4B, which has a similar offset of BTC outflow.

In fact, we believe that we have obtained a wider capital foundation opportunity through the spot ETF, and the new supplier dynamics has a long -term constructive effect on the asset category.However, if there are any signs of the previous cycle, this may take a few months to fully realize it.The top of the minus occurs between 350 and 550 days after the incident (see Figure 2), although this cycle is different.In the context of spot ETF flow, Bitcoin has reached a record high in more than a month before the decrease of half a month. We expect Bitcoin to further deviate from the previous time trend.

However, halving is not only good for Bitcoin.With the maturity of this industry, the constructive narrative of parallel cryptocurrency vertical fields usually occur after halving.After half in 2016, the prosperity of the first token issuance (ICO) brought the market for the market into 2017.Similarly, in 2020, DEFI launched the rise of the decentralized applications (DAPP) such as Uniswap and Maker, and opened the experiments in Defi and other early products for nearly two years.

Source of flow funds

With the emergence of new tools and use cases, the number of vertical industries in cryptocurrencies has expanded tenfold.The block space has never been so cheap, and the number of “things to be done” on the chain has never been so much.Social applications like Farcaster are expected to be adopted in the early days, and a series of carefully designed blockchain games have also begun to be launched.The improvement of wallets enables developers to deploy more seamless entry journey, and the original DEFI’s original language continues to expand to liquidity reassembly mortgage and novel chain derivatives.At the same time, the tokenization projects of different financial products and jurisdictions are making significant progress, and the overlapping growth between the chain and the overlapping of physical assets under the chain continues to grow.This is largely promoted by the amazing growth of infrastructure infrastructure established during the bear market.

We believe that this may lead to different models in this cycle, that is, more different sub -industries perform well at the same time (rather than the industry focus on one or two main themes).Especially in the world of independent applications (from users abstracted from the blockchain component), which is increasing in technical complexity, the differences between tokens and income models have become increasing.This breadth has spawned a new form of income sources, and this is usually not obtained in the previous cycle.For example, Bonkbot, a telegraph robot in cooperation with Bonk community, regularly income more than 100,000 US dollars per day (the peak of a single -day fee income is 1.4 million US dollars).

We further believe that the difference between the vertical industry of cryptocurrencies in this cycle may lead to more obvious capital rotation between the industry.In fact, through the early attention of the artificial intelligence (AI) project, and the excessive concern to the subsequent models and re -mortgaging, we have seen some signs.

The downturn level of cryptocurrency financing supports this view.It reduces the main ways of new liquidity of Takata assets.The average fundraising amount in 2024 is still lower than 1 billion US dollars per month, or even lower than the level of 2017-18, about a quarter of 2021-22.The reduction of funds is not only a by -product that seriously affects the previous cycle, but also part of the macro -callback.In 2023, the private equity market has shrunk, and the total amount of funds raised by venture capital funds has reached the lowest level in 6 years, and has decreased by 60%since 2022.

The relatively scarce financing caused how to inject liquidity into the field.Spot ETF is undoubtedly one of the main ways we have discussed before.They can obtain a wider capital pool, from registered investment consultants (RIA) to potential distribution of other management funds.For example, Berlaide has developed a plan to include the spot Bitcoin ETF into its global configuration fund.However, these capital inflows are limited to BTC (maybe ETH in the future), and it is unlikely to further flow down along the risk curve.If this market structure has not changed significantly, we believe that the dominant position of Bitcoin will maintain a high level for a period of time.

On the other hand, we believe that the main means of injecting the liquidity of the cottage (beyond leverage) comes from the net growth of stablecoins.Stablecoin participates in most of the daily average daily transaction activities of $ 2.6B of DEX (DEX), and is further used by many centralized exchanges (CEX) as a transaction pair.Although the total market value of the stable currency is still lower than the peak of 2022, the total amount of USDC and USDT issuance has exceeded a record high and continued to rise.If we eliminate the impact of TerraUSD, which exists no longer exist on the total market value, stabilized coins are actually close to the previous historical high.

Macro

虽然我们预计未来加密货币内生催化剂的崛起，但我们认为宏观形势将在短期内发挥更重要的作用。In fact, after halving in the past, macro -wind wind is also important, and it may even be more important than cryptocurrency native catalysts.The main impact of halving in 2012 was influenced by the Lianlian Reserve quantitative easing plan and the US debt upper limit crisis.Similarly, in 2016, Brexit and controversial US elections could have triggered financial concerns in Britain and Europe.The popularity of COVID-19 in early 2020 also led to unprecedented levels of stimulus, and promoted a sharp rise in liquidity.

We believe that this cycle is not different. Today’s macro environment is equally important for Bitcoin and broader cryptocurrencies.After the Middle East conflict has intensified, the recent leverage rate has fallen sharply, and the financing interest rate has been reset to a level close to zero.The continuous war between the Ukraine and the Russian front and the tension between the South China Sea also depicts a global picture full of uncertainty.We believe that in the widespread trend of globalization and return, the importance of global geopolitics is increasing, which may be a decisive macro characteristic of this cycle.This is especially in the hedging environment.After the market direction is unclear, the correlation between Bitcoin and most other cryptocurrencies has been consolidated upward after the rise of the first quarter of 24 years.

Due to concerns about the rise in inflation, the correlation between Bitcoin and gold continues to rise in March and April, which also shows that in the absence of cryptocurrency specific catalysts such as the lack of spot ETF approval, Bitcoin’s status as a sensitive macro asset continues to continueEnhancement.Considering that Bitcoin’s claim as a means of storage, this behavior is hopeful, although we believe that this statement has actually been strengthened in the recent bear market.

In January 2023, the uncertainty of the US debt limit and the regional bank crisis in March of that year, Bitcoin had a strong bidding.The appreciation of the compressed price (just like the past 6 months) may distort this signal to a certain extent because it introduces the factors of speculation and excitement.Nevertheless, we still believe that the value of Bitcoin as a geopolitical hedging tool has so far contributed to a more active purchase of dips, and the maximum retracement is limited to 18%(in contrast, the previous cycles returnThe withdrawal is more than 30%).

In addition, the rise in U.S. Treasury bonds is another theme that Bitcoin supporters are concerned.The Congress Budget Office predicts that it will spend $ 870B in 2024 to repay government bonds, higher than the US $ 658B recorded in 2023.Of course, we believe that this is worrying and is promoting the inverted curve of the bond yield -as the US Treasury bond needs to be reinstated, the long -term high interest rate may be financially unsustainable.

In other words, even if the pace of US debt burden is accelerating, the United States may also get rid of debt (or to balance the budget by reducing expenditure or increasing taxes, although it seems unlikely in the short term) to the upcoming election).The growth and high employment data that is stronger than expected may increase overall tax revenue.Although we believe that the current growth rate cannot completely offset the increased debt burden, it is impossible to fully discourage it.Risks such as geopolitics, inflation and national debt together constitute the macro background of this cycle.

in conclusion

In the same conditions, Bitcoin is essentially a constructive event, although we believe that the macro environment and the cryptocurrency vertical industry that has made breakthroughs has always played an important role in catalytic cyclical bull markets.Although this process has always taken several months, it will vary depending on the cycle -we believe that with the decrease in major ETF inflow and risk investment, the changing market structure may lead to some uniqueness of this cycle.

We further believe that after the stimulus caused by COVID-19, the previous cycle consolidated Bitcoin’s sensitivity to global liquidity.However, global liquidity does not seem to increase at the same amplitude, and has retreated in a secondary position, while more substantial instability has appeared at home and abroad.In view of this, we believe that the upcoming cycle will be concentrated in the test of the value storage narrative of Bitcoin, and is supported by more widely dispersed encrypted catalysts in different vertical fields.