Highlights:
- Ethereum retested its ATH as trading activity picked up, and the Dencun hard fork came live on March 13. This upgrade will enable proto-danksharding, reduce gas fees and could invigorate activity on its layer-two networks.
- Pantera Capital announces a plan to raise $250 M to purchase Solana (SOL) from the bankrupt FTX estate for $59.95 U.S. with plans to establish the Pantera Solana Fund. The minimum investment amount for the fund is $25 M, and the SOL holdings will be locked with a four-year vesting schedule.
- Worldcoin (WLD) is a privacy-preserving human identification and financial network that has surged 250% in the past 30 days to a new ATH of $11.98. It thus reached a valuation of $1.45B after the launch of OpenAI’s Sora. In public perception, Worldcoin is linked to OpenAI via its founder, Sam Altman and thus, its price action often responds to news about the company. WLD price was not deterred by Elon Musk suing CEO Sam Altman and Spain ordering an immediate halt on the project collecting data.
Forecast
In previous cycles, altcoin valuations increased post-halving as investors reinvested gains from BTC into progressively smaller and more risky crypto projects. However, in this cycle, BTC inflows have been driven by traditional finance through EFTs. As ETF investors cannot easily rotate their capital into altcoins, any coming altseason may be attenuated.
Sentiment
Altcoins are piggybacking off the positive pre-halving sentiment driving the BTC market. AI-related and meme-coins are seeing bullish, volatile surges followed by swift price corrections as traders seek to capitalize on short-term gains. The altcoin season indicator is at 55, showing that for the past 90 days, 27 of the top 50 performing coins have outperformed BTC.
Analysis
The memecoin market cap has risen to $60 billion and now stands at 2.17% dominance relative to all crypto assets. The recent memecoin frenzy has been fueled by internet hype and retail investors looking for quick gains. Price surges mainly been driven driven by speculation around listings on top exchanges, retail investors who mimic whale wallet investments and social media hype.
Some projects attempting to set themselves apart from the pump-and-dump pattern of memecoins by creating more complex products around their tokens. Shiba Inu provided a notable example in late February, as its lead developer announced a collaboration with ZAMA to bring Fully Homomorphic Encryption (FHE) to the Layer-two Shibarium chain. Through FHE, computations on encrypted data can be performed without the need to decrypt it. This will enable smart contracts with private execution on Shibarium.
Many memecoins, such as SHIB, PEPE, and FLOKI, are heavily traded on the Ethereum network. In light of recent events such as the Dencun launch and speculation of an ETH ETF, the memecoins frenzy has boosted Ethereum’s price performance. The surge in the demand for ETH transactions led to high fees (Figure 2). Beyond Ethereum, general public interest in memecoins has led to an increase in the number of active wallet addresses in the broader meme coin market. In particular, wallet activity on the BNB Chain has significantly grown to compete with ETH and Solana after lagging for months (Figure 3). Subsequently, Binance Coin (BNB) rallied by over 90%.
