Research Summary
The report analyzes the cryptocurrency market in 2024, highlighting the challenges faced by investors and projects due to the market’s unique characteristics. It discusses the influence of institutions and ETFs, the performance of new projects with high FDV and low liquidity, and the divergence between VC and retail investors. The report also examines the listing strategies of major exchanges and the potential opportunities in the current market.
Key Takeaways
Influence of Institutions and ETFs
- ETF and Institutional Drive: The bullish sentiment in the current market cycle is primarily driven by ETFs and institutional assets. The approval of the BTC ETF in late 2023 injected strong confidence into the market, leading to a significant increase in BTC price. Since the approval of the US spot Bitcoin ETF on January 10, 2024, over 70 spot Bitcoin ETFs have attracted more than $28 billion in new funds.
Performance of New Projects
- High FDV and Low Liquidity: New projects in the current market generally face a high fully diluted value (FDV), low circulating supply, and limited liquidity. This combination increases retail investors’ skepticism and perception of overvaluation, making it difficult for these projects to maintain investor confidence and price stability.
Divergence Between VC and Retail Investors
- VC-Retail Investor Discrepancy: Retail investors have noticed trends endorsed by VCs and the market, such as AI, DePin, and RWA, and have bought into high-valuation new projects. However, they have found that following VC trends has not yielded corresponding returns, leading to a divergence between VCs and retail investors.
Listing Strategies of Major Exchanges
- Exchange Listing Strategies: The performance of new token projects listed on major exchanges – Binance, Bybit, OKX, and Bitget in 2024 has been affected by these market conditions. Different listing strategies may also contribute to the performance differences among these exchanges.
Potential Opportunities in the Current Market
- Embracing Market Complexity: Despite the challenges, the current market conditions also provide strategic investment opportunities for high-potential projects. With clear understanding and vision, the current market may offer opportunities to buy at the bottom.
Actionable Insights
- Understanding Market Trends: Investors should closely monitor the influence of institutions and ETFs on the market, as they are currently driving the bullish sentiment. This could provide insights into potential market movements.
- Evaluating New Projects: It’s crucial to evaluate new projects based on their FDV and liquidity. High FDV and low liquidity could indicate potential risks and affect investor confidence.
- Considering Exchange Strategies: Investors should consider the listing strategies of major exchanges when investing in new token projects. Different strategies could result in varying project performance.
- Embracing Market Complexity: Despite the market’s complexity, it’s important to embrace it and look for potential opportunities. This could involve researching high-potential projects and considering strategic investments.
