Research Summary
The report discusses the resurgence of the cryptocurrency market in 2023, highlighting the approval of Bitcoin ETFs, Bitcoin’s record price, and the rise in decentralized exchange volume. It also notes the increase in crypto market cap and the popularity of various tokens. Despite these positive trends, a significant portion of crypto investors report no gains or losses. The report suggests that this discrepancy may be due to new market participants and the shift from promise-based to execution-based projects.
Key Takeaways
Resurgence of the Crypto Market
- Bitcoin ETFs Approval: The report highlights the approval of Bitcoin ETFs from major financial institutions like Blackrock and Fidelity as a significant development in the crypto market in 2023.
- Record Bitcoin Price: Bitcoin surpassed its all-time high price in 2023, further indicating the resurgence of the crypto market.
- Decentralized Exchange Volume: The volume of decentralized exchanges reached a level on par with its 2021 peak, demonstrating the growing popularity and acceptance of decentralized finance.
Discrepancy in Crypto Gains
- Investor Performance: Despite the positive trends in the crypto market, a poll on Crypto Twitter revealed that 32% of respondents reported no gains or losses since the start of 2023. This discrepancy could be due to the influx of new market participants who are still learning the ropes of crypto trading.
- Shift from Promise-Based to Execution-Based Projects: The report suggests that the discrepancy in gains could also be due to the shift from promise-based to execution-based projects. In the past, most crypto projects were built on promises, but now there’s a clear difference between projects that have executed and found product-market-fit versus those still relying on future promises.
Importance of On-Chain Research
- On-Chain Research: The report emphasizes the importance of on-chain research in making informed investment decisions in the crypto market. It suggests learning how to find new tokens, evaluate tokens with on-chain fundamentals, and use various research tools.
- Key Metrics: The report identifies key metrics for on-chain research, including Total Value Locked (TVL), fees and revenue, volume, stablecoin flows, gas expenditure, and token holders.
Actionable Insights
- Embrace On-Chain Research: Crypto investors should learn how to conduct on-chain research to make informed investment decisions. This includes understanding how to find new tokens, evaluate tokens with on-chain fundamentals, and use various research tools.
- Focus on Execution-Based Projects: Investors should pay attention to projects that have executed and found product-market-fit, rather than those still relying on future promises. This shift from promise-based to execution-based projects could be a key factor in determining investment success.
- Understand Key Metrics: Understanding key metrics for on-chain research, such as Total Value Locked (TVL), fees and revenue, volume, stablecoin flows, gas expenditure, and token holders, can provide valuable insights into the performance and potential of different crypto projects.
