Welcome to our January 2024 monthly crypto market recap!

The crypto market has been a true embodiment of volatility this month, with prices experiencing extreme highs and lows, keeping investors on the edge of their seats with an extra layer of excitement and challenges for traders navigating these turbulent waters.

Macro factors have added to the market’s complexity, reflecting a mixed bag of economic indicators. On one hand, the US Congress reached a significant $1.66 trillion budget deal, averting a looming government shutdown in December. The US GDP also outpaced analyst estimates, showcasing resilience and strength over recession fears. However, the economic landscape is not without its challenges, as inflation continues its upward trajectory, exceeding forecasts in January. Simultaneously, the Chinese market grapples with declines, attributed to weakening internal demand and foreign investors losing confidence.

In the crypto realm, history was made with the approval of various BTC Spot ETFs. While this marked a pivotal moment for the industry, the expected exponential price surge did not materialize. Instead, net flows remained modest. Notably, continuous selling of BTC was seen through Grayscale, with FTX liquidating their positions and investors flocking towards more affordable options, reshaping the crypto investment landscape.

This month, the meme coin frenzy, particularly on Solana, should also be highlighted. New entrants like WIF and MYRO joined the ranks, riding the enthusiasm sparked by the BONK hype from previous months. The meme coin phenomenon continues to showcase the unpredictable and trend-driven nature of the crypto market.

Restaking has also emerged as a notable theme, capturing the attention of both retail and institutional investors. Eigenlayer garnered significant interest, boasting a Total Value Locked (TVL) of $1.8 billion at the time of writing. This adds a new dimension to the already substantial ETH staking market, creating a fresh narrative for investors to explore.

Join us as we untangle the threads of these market dynamics and delve into the stories that shaped the top-performing tokens in January. Additionally, stay informed with our comprehensive monthly market recaps at Treehouse Insights and our daily market analysis with Treehouse Daily. Stay informed to navigate the twists and turns of the crypto landscape!

Sui (SUI) ⏶81.45%

Sui is a Layer 1 blockchain that aims to redefine the creation and management of on-chain assets, from gaming to finance. Developed by Mysten Labs, a team of ex-Meta engineers, Sui is designed to be permissionless and to scale horizontally without an upper limit, effectively addressing the high demands of application development for the next billion web3 users. Its innovative architecture allows for the parallel processing of simple transactions and offers a sophisticated approach to complex transactions with its DAG-based mempool and BFT consensus mechanisms.

Throughout the month, one of the key developments in the Sui ecosystem is the launch of Scallop, a lending protocol on Sui. Leveraging the blockchain’s ability to manage high transaction volumes while maintaining low fees, Scallop has quickly become one of the fastest-growing DeFi applications on the network. Ever since Scallop announced its rewards system on 2nd January, SUI’s TVL has almost doubled. At the time of writing, Scallop’s TVL surged close to $80 million, representing over 20% of Sui’s total TVL, positioning it as a leading money market and protocol within the Sui ecosystem. 

In addition, Sui’s advancement in partnership with Alibaba Cloud has also been a game-changing event. Alibaba Cloud has announced a series of new services to support developers building on the Sui network which include an AI-enabled development environment, community events, and the translation of Move documentation into Asian languages. This collaboration upgraded Sui’s development environment, tapping into Alibaba Cloud’s capabilities to offer a stronger, more efficient platform for developers, which resulted in a 10% spike in price in just a day following this announcement. Lastly, anticipation is building around the imminent launch of Solend, a leading lending and borrowing protocol on Solana, on the SUI Blockchain. With a TVL exceeding $150 million and a user base exceeding 170,000, the integration of Solend into the growing Sui ecosystem in 2024 is anticipated to be transformative, attracting a broader user base and fostering new developments. This launch is expected to play a crucial role in reshaping the current DeFi landscape within the SUI network, injecting significant liquidity and propelling further expansion of the ecosystem.

Celestia (TIA) ⏶45.52%

Celestia is a modular L1 that emphasizes simplicity in deploying blockchains, aiming to empower creators and developers by minimizing the complexities involved in launching new blockchains. It is built to scale by decoupling execution from consensus through a mechanism known as “transaction parallelization.” This innovation allows for high transaction throughput, low latency, and reduced fees, which can be particularly beneficial in the realms of gaming and finance where demand for efficient transaction processing is high.

The token has witnessed a significant surge this month, setting a new all-time high beyond the $20 mark, almost 10x since its airdrop, indicative of continued strong market enthusiasm for the token and its underlying technology. The increase in $TIA’s contract holdings to $214 million network-wide (with Binance accounting for $85 million) demonstrates substantial financial backing and market confidence. The Celestia network has also seen significant transactions and a growing on-chain activity which serves as evidence of its increasing adoption and utility.

The $ALT airdrop for $TIA stakers has added to the positive sentiment, as many protocols continue to reward $TIA stakers lucratively. Looking ahead, there’s an anticipation for further price appreciation of $TIA, driven by the network’s scalability features and a series of upcoming airdrops from integrated projects such as Berachain, Caldera, Eclipse, Hyperlane, Kinto, Manta, Privy, Redstone, and Risk Zero — all of which have raised significant funds. This series of airdrops seems to have created the “(3,3)” of this cycle, attracting more investors into the ecosystem and potentially leading to higher staking activity in $TIA and other tokens. The sentiment around Celestia and $TIA remains bullish, with traders and investors eyeing future growth as the ecosystem continues to develop and attract more protocols.

Ronin (RON) ⏶42.16%

Ronin is an Ethereum Virtual Machine (EVM)-compatible blockchain developed by Sky Mavis, creators of Axie Infinity, aiming to revolutionize blockchain gaming by addressing issues like high gas fees and slow transaction speeds. The native cryptocurrency, RON, launched in January 2022, enhances Ronin’s functionality, enabling low-cost token swaps and staking. The network transitioned to a Delegated Proof of Stake (DPoS) consensus mechanism for speed and security, accommodating popular games like Axie Infinity and Pixels. 

The recent surge in Ronin’s price is predominantly linked to heightened social sentiment surrounding speculation about RON’s potential listing on Binance. A tweet from @thecryptocactus highlighted a significant accumulation of RON in the Binance Ronin blockchain hot wallet since January 26th, witnessing a surge from 700 to 137,000 RON in a single day. In addition, these on-chain transactions, according to Cactus, may also indicate Binance’s potential interest in becoming a Ronin validator.

This analysis, later reported by reputable crypto media outlets like Wu Blockchain, sparked considerable enthusiasm in the Ronin community, seen as a bullish indicator. The prospect of trading on Binance often accompanies an increase in volume, price appreciation, and industry recognition, prompting investors to anticipate a potential Binance Launchpool listing and driving more than a 15% price increase in a single day.

Blur (BLUR) ⏶34.49%

Blur is the native token for the Blur NFT marketplace, the largest NFT marketplace aggregator on EVM-compatible blockchains. The platform is designed to cater to professional NFT traders looking for efficiency and advanced analytics tools, eventually aiming to become the go-to marketplace for all NFT traders.

Contrary to the common beliefs following the $30 million worth of BLUR token unlock, the token has experienced significant price bullishness throughout the month. Specifically, a portion of the price movement can be attributed to the recent buzz around staking Blur for exposure to $BLAST airdrops, the native token for Layer-2 created by the same team. Taking a look at just pure numbers, Blur has been dominating the NFT space by around 75% of the entire NFT trading volume, outperforming OpenSea which is arguably their biggest competitor.

Looking forward, the integration of Blur and Blast will likely bolster both platforms. This integration is anticipated to synergize the two, with Blast’s current TVL indicating strong market confidence. The introduction of Season 3 airdrops, ending in May 2024, also uses Blast to distribute rewards, with a focus on rewarding long-term platform engagement. The airdrop points system includes a multiplier effect, which starts at 1x and increases by 0.5x each month after the initial deposit of $BLUR tokens, rewarding and encouraging holders to maintain their stake in the ecosystem. In addition, the upcoming launch of NFTPerp V2 is timed perfectly amidst signs of renewed interest in the NFT market, exemplified by significant trades like Pudgey Penguins hitting the 20 ETH mark, which could provide a fertile ground for $BLUR’s growth in the near future.

Bittensor (TAO) ⏶33.21%

Bittensor is an open-source protocol that utilizes blockchain technology to create a decentralized machine-learning network through subnets. Each subnet is an incentive-based competitive market in action, to produce the best decentralized intelligence. This network enables machine learning models to train collaboratively and be rewarded in TAO, Bittensor’s native token, according to the informational value they offer to the collective. Furthermore, TAO provides external users with access, enabling them to pull data from the network and adjust its operations to suit their requirements. Bittensor aims to establish a marketplace for artificial intelligence, where creators and users of this resource can engage in a secure, open, and transparent environment. The Bittensor network operates using two types of nodes, servers, and validators, with assessments based on the value of their responses. Nodes that add value to the network are rewarded with more stake (TAO), while low-value nodes are weakened and eventually de-registered.

On 22nd January, TAO witnessed a surge in price from $238, riding on a bullish momentum to $369 on 25th January, marking a 55% increase in price. The catalyst for this was likely due to the multiple direct mentions by reputable voices such as OurCryptoTalk, Kaduna, and DMTLAND_. OurCryptoTalk retweeted a thread that talked about Apple Vision Pro pre-orders opening on 19th January which saw projects like TAO potentially benefiting from this. He goes on to mention TAO multiple times for several days on Twitter. Similarly, Kaduna began tweeting about TAO starting on 23rd January, continuing to write threads about TAO every few days. DMTLAND_ started mentioning TAO from 21st January onwards. 

With AI-related projects being the current trend in the market as well as the collective influence of 308K followers from the three profiles mentioned above, TAO’s social sentiment may have a part to play in its recent price surge this month. Moving on, the dynamic TAO proposal may be important for future price actions. Bittensor is currently composed of 32 self-contained incentive mechanisms (subnets), which produce various decentralized digital commodities. The distribution of TAO to these subnets is determined by a centralized root network: a voting pool composed of Bittensor’s top 64 validators. With this proposal in effect, it would change the way TAO is distributed to these subnets. All TAO holders will be able to vote directly — increasing or decreasing the proportion of emission a subnet receives, based on the distributed estimation of how valuable its commodity will be. In addition, there will be two TAO tokens — regular and dynamic — with the regular token representing the value of the TAO network and the dynamic token being used as an incentive and fund delegation mechanism for each subnet. This change would incentivize the respective subnets to actively work to provide value and innovate to earn more TAO rewards. This enhances community engagement by encouraging staking on the subnet with greater potential to earn a higher APY, instead of passively allocating their stake and relying on a centralized network to vote on the distribution.

Astar (ASTR) ⏶31.10%

Astar is a zk-powered interoperable blockchain platform supporting Web Assembly smart contracts (WASM) from Polkadot and the Ethereum Virtual Machine (EVM) smart contracts. Astar provides native access to Polkadot and Ethereum through its parachain slot and Layer 2 scaling solution and offers bridges into other major blockchain ecosystems in addition to acting as the gateway for projects across entertainment & gaming enterprises in Japan.

In early January, a key announcement was made for the launch of dApp staking v3, which would significantly impact both builders and stakers. Key changes include dApp staking on Astar/Shiden which provides developers with a basic income, unlike the traditional approaches where dApp developers need to rely on grant programs, token issuance, and fundraising efforts to generate income. This event was the most likely catalyst for the increased on-chain activity, which formed the increased price action in that month. 

Coupled with that was the partnered AMAs with reputable organizations like DIAdata_org, Polkadot, and CoinEasy, which provided coverage and exposure for the Astar network to a broad range of audiences of more than 111.5K. This event lent legitimacy and credibility to the Astar network while enhancing the perceived value of Astar among potential token holders. Moreover, such AMAs historically tend to spark price volatility, driven by a mix of speculative trading and increased interest in the featured projects.

Some upcoming events to take note of would be the unveiling of the next launch partners of Astar network’s Limited First Edition NFTs. Given that the first two launch partners unveiled were PythNetwork and QuickswapDEX, two prominent players in their respective fields, this may provide another boost to the vibrancy of the ecosystem. In fact, this could attract innovative projects, artists, and businesses to join their NFT campaign, and explore onboarded projects — ranging from top Web3 applications to enterprises and popular artists — by completing a variety of on-chain and off-chain quests. Upon completion, exclusive NFT rewards are rewarded, which helps to widen the adoption of Astar’s network and provide value to its native token.

Flare (FLR) ⏶27.61%

Flare (FLR) is an interoperable blockchain utilizing the Ethereum Virtual Machine (EVM), allowing smart contracts to operate on the XRP network. The Flare token (FLR) is its native currency, and it plays a pivotal role in supporting the network’s functionality. With protocols like the State Connector and Flare Time Series Oracle (FTSO), Flare enables secure communication between different blockchains and ensures reliable off-chain data usage within its network. FLR holders contribute to the network by participating in governance, decentralizing the FTSO, securing the network, and covering transaction costs. 

The surge in FLR’s price can be attributed to a key announcement on January 15th when Google Cloud joined the Flare blockchain as a validator and infrastructure provider. The partnership with Google Cloud is significant for Flare as it brings a major player into its ecosystem, offering access to a vast volume of data and contributing to the growth and adoption of blockchain technology. Following this news, FLR experienced a rapid increase of over 20% within 24 hours, and it has since stabilized around the same price level.

Furthermore, the collaboration between Flare and Google Cloud extends beyond the role of Google Cloud as a validator for the network. Flare has announced that the two entities will work together in grants and participate in the Google Cloud Web3 Startups Program. Builders eligible for grants from Flare may also benefit from additional support, including credits, training, and other resources from Google Cloud, amounting to $200-350K in value.

Conflux (CFX) ⏶23.11% 

Conflux is a permissionless Layer 1 blockchain connecting decentralized economies across borders and protocols, operating on a hybrid PoW/PoS consensus. The Conflux network provides significant performance improvements with its processing of parallel blocks in a Directed Acyclic Graph(DAG) structure, which lowers confirmation times and increases transaction throughput substantially. As the only regulatory-compliant public blockchain in China, Conflux offers a distinct edge for developing projects and penetrating the Asian market. Conflux has partnered with international brands and government organizations in the area on blockchain and metaverse projects, working with entities like the city of Shanghai, McDonald’s China, and Oreos.

The recent price surge for CFX on 26th January from $0.17 to $0.24 on 29th January represents a 41% increase, led largely by the announcement of the integration of the Conflux L2 solution with the Bitcoin network. This integration seeks to improve asset management and network security on the Conflux network through the utilization of POS consensus in Conflux. Conflux’s POS consensus uses Verifiable Secret Sharing (VSS)-based key sharing to achieve decentralized management of BTC assets, improving network security. In addition, Conflux uses a stable receiving address to handle incoming BTC assets through the Dynamic Proactive Secret Share (DPSS) protocol. DPSS enables secure and dynamic management of secret shares, guaranteeing that the private key remains protected and accessible only to the current committee. Conflux’s integration with the BTC network opens up opportunities for innovative applications that can leverage both networks simultaneously, adopting BTC’s network security and incorporating support for Ordinals and other inscription protocols which is a multi-billion dollar market, expanding liquidity opportunities.

Looking ahead, key moments to watch out for would be the expansion of Conflux’s blockchain-based SIM cards, additional funding from their Grants Program to support promising projects and initiatives that align with their vision, and a collaborative hackathon to attract talented developers to their ecosystem. These initiatives would encourage greater adoption for the Conflux ecosystem as a whole which in turn may provide value for its native token CFX.

Chiliz (CHZ) ⏶21.90%

Founded by CEO Alexander Dreyfus and raised over $66 million through a private token sale, Chiliz (CHZ) is a cryptocurrency that facilitates unique experiences for sports fans by enabling direct engagement with their favorite teams. Inspired by the socios (members) of Spanish soccer teams, fans can purchase Fan Tokens of their preferred teams using CHZ, the native cryptocurrency of the Chiliz platform. These Fan Tokens, available on socios.com, grant holders various real-world experiences and influence over team decisions, such as uniform designs and stadium names. Chiliz allows sports franchises to monetize their fan base while providing fans with active participation in their teams’ operations. 

CHZ experienced a significant price surge this month, primarily driven by improved social sentiments within its ecosystem. Notably, the Chiliz Chain tokens, designed for sports fans, recorded over 10 million transactions since its launch in mid-2023, indicating a growing adoption.

CEO Alexandre Dreyfus’ comments added to the positive sentiment, sparking speculation about potential token-based mergers and acquisitions (M&A) pursued by Chiliz. Dreyfus mentioned that Chiliz approached Klaytn in 2023 for a potential merger, envisioning the consolidation of the two networks with a unified token. The company is actively exploring more aggressive M&A opportunities in the coming year.

Lastly, Chiliz announced a strategic partnership with Ramper, a DeFi infrastructure firm. This collaboration allows non-Web3 native users to access decentralized applications (dApps) through familiar methods like email or Single Sign-On (SSO), while non-custodial wallets are generated behind the scenes. This move positions Chiliz to cater to the adoption of Web2 users in the upcoming months.

Lido DAO (LDO) ⏶20.45%

Lido is a single asset staking protocol that allows users to stake their tokens — ETH, MATIC, SOL — to earn staking rewards. Lido runs node operators responsible for running the validators to generate yields for token stakers. The platform’s native token is LDO — which also serves as the governance token for Lido DAO. Holders can participate in governance proposals and vote on key decisions such as board adjustments, new integrations, and platform updates. LDO holders have the right to determine the development and operation of the platform.

During the month, the Lido DAO endorsed two major bridge providers, Axelar and Wormhole, as alternatives to LayerZero. LayerZero had previously set up a bridge for Lido’s stETH token to other networks without waiting for an official endorsement from Lido DAO. The endorsement of Axelar and Wormhole by Lido DAO members came after significant community discussion and a temperature-check poll, where 81% of votes favored this new proposal. By incorporating multiple bridge providers, Lido DAO enhances the resilience and security of its network, mitigating risks associated with relying on a single provider.

Additionally, the launch of wstETH by Lido DAO on the Ethereum Layer 2 network, specifically on the Mantle Network, has also been a key driver for the positive price movements. The strategic move significantly enhances the scalability and efficiency of the DeFi applications within the Mantle Network. By allowing users to seamlessly bridge their staked ETH into the Mantle ecosystem, Lido DAO has facilitated faster transactions and reduced costs for users, improving their overall DeFi experience. This integration into various Mantle-based applications, like lending platforms and liquidity pools, increases the utility and versatility of wstETH, making it a more attractive asset within the DeFi community.

Closing Remarks 

As January concludes, the cryptocurrency sector displays a surge of optimism, driven by market expectations of the Federal Reserve’s potential rate cut in March 2024, which could significantly boost crypto markets. Layer 2 solutions like Blast and Manta, known for their native yields, are also gaining traction, with more such chains like Fraxtal by Frax Finance set to launch in February.

The Ethereum network’s impending Dencun upgrade, currently under testing on the Goerli Testnet, marks a critical step in its evolution. This upgrade aims to transform Ethereum into a scalable settlement layer, introducing proto-danksharding to improve data availability for layer-2 rollups, thereby reducing transaction costs and providing direct benefits to users. This development underlines Ethereum’s continuous commitment to scalability and cost-efficiency, potentially catalyzing broader adoption of blockchain technology. 

For a more in-depth understanding of EIP 4844, a crucial component of the Dencun upgrade, we invite you to explore our insights article.

As we look towards the upcoming month, our dedication to exploring the evolving landscape of cryptocurrency remains resolute. We are committed to offering thorough analysis and expert navigation through these shifting terrains. Keep an eye out for our continued deep dives into the crypto world via the Treehouse Daily Newsletter and Treehouse Insights Research, where we’ll bring you the latest and most insightful updates. This commitment highlights our role as a key resource for understanding the complexities and opportunities within the ever-changing crypto market.

Disclaimer

This publication is provided for informational and entertainment purposes only. Nothing contained in this publication constitutes financial advice, trading advice, or any other advice, nor does it constitute an offer to buy or sell securities or any other assets or participate in any particular trading strategy. This publication does not take into account your personal investment objectives, financial situation, or needs. Treehouse does not warrant that the information provided in this publication is up-to-date or accurate.

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