Election Countdown Begins
The crypto market has seen varied performances across sectors, with major assets like Bitcoin moving sideways, remaining within the low $60k range. This stagnation is largely driven by ongoing geopolitical tensions and the looming U.S. election, now just a month away. The cautious market behaviour may reflect investor uncertainty as they await key developments. Many investors hold strong convictions that the market will react positively once the election results bring more clarity.
Despite this, meme coins have once again surged to the forefront, capturing significant attention and leading market activity. While the broader market awaits further developments, the volatility in meme coins shows the crypto community’s continued appetite for speculative plays.
Weekly Price Update
SUI: Did I Miss Out?
It’s still early in the market cycle, and Sui has outperformed the broader market, rising 4.6x from $0.43 to where it is today, making significant strides since this time last year. Dubbed the “Solana of 2024,” all eyes are on its growing ecosystem, drawing comparisons to Solana’s meteoric rise in 2021 when Solana jumped from $1.40 to $240 within a year—a massive 170x return. Currently, Solana’s market cap is 13 times that of Sui, yet Sui has already surpassed Solana in daily transactions, showing how liquidity and attention are flowing into its ecosystem. Sui remains a fantastic opportunity, with many projects within its ecosystem, such as Cetus, Scallop, and DeepBook, poised to benefit from the network's success and perform exceptionally well. There's still plenty of room for growth as the ecosystem matures and expands.
A New Shift: Solana to Sui
In the past month, 27% of capital outflows from the Solana ecosystem have shifted toward Sui Network. This movement highlights growing investor interest in Sui, as the blockchain continues to gain traction, attracting capital that previously circulated within Solana. The shift underscores Sui's expanding ecosystem and rising prominence, particularly as Solana faces competitive pressure.
Furthermore Sui has recently surpassed Solana in daily transactions, marking a significant achievement. Daily transaction volume is a key metric that reflects the level of activity on a blockchain, often indicating ecosystem health and growth potential. As user activity increases, it attracts more developers, which in turn drives innovation and the creation of better applications. This virtuous cycle can lead to exponential growth for the network, positioning Sui and its applications as a rapidly growing competitor in the blockchain space.
Sui continues to shine with the launch of native USDC, the largest dollar-backed stablecoin, on its blockchain. This marks a significant milestone for the rapidly expanding network. The integration strengthens Sui’s ecosystem, boosts its already substantial stablecoin market cap, and provides a reliable foundation for future DeFi applications and innovation.
Trump and Harris' Crypto Policies
The 2024 U.S. election could have profound implications for crypto. Donald Trump, historically skeptical of digital currencies, could impose more regulatory constraints, possibly stifling innovation, despite advocating for invovation and success of crypto in America. Kamala Harris' proposal for an unrealised capital gains tax could dramatically alter the investment landscape for crypto holders. The tax would be applied to gains on unsold assets for high networth investors ($100m+), which may force investors to liquidate holdings to cover taxes on assets they haven't yet sold. Critics argue this policy could lead to a liquidity crunch in the crypto market, as well as reduced investment, by penalising investors before they’ve realised actual profits.
This week, Polymarket’s odds have shifted in favour of Donald Trump, following recent backing from Elon Musk. Musk publicly endorsed Trump on X and reiterated his support during a Pennsylvania rally. Musk believes ‘Polymarket might be more accurate than traditional polls because real money is on the line’. When Musk made his remarks, Trump held a 51% to 48% lead, which has since expanded to 53% to 47%.
While Musk and some analysts argue that betting real money incentivises more accurate predictions, others contend that financial speculation doesn’t always align with genuine political preferences. For example, someone might bet on one candidate while planning to vote for the other, highlighting the distinction between financial predictions and personal convictions.
Furthermore, A recent survey of crypto fund and hedge fund managers reveals that most view a Democratic win in the upcoming U.S. election as less favourable for the industry, though not crippling. Around 20% believe the election outcome won’t matter for crypto's trajectory, but a significant majority agree that Donald Trump would likely have a more positive and influential impact on the market, with faster growth expected under his pro-crypto policies. However, they acknowledge that crypto will continue to grow regardless of the result.
Hedge Funds' Growing Confidence in Crypto
Hedge funds are doubling down on crypto despite regulatory headwinds. Many institutional investors now view digital assets as a hedge against inflation and a long-term investment. Surveyed funds plan to significantly increase their exposure, citing the potential for future growth in blockchain technology and decentralised finance (DeFi). Despite current volatility, hedge fund managers maintain high conviction, driven by an expected regulatory framework and increased adoption of digital assets.
By the end of Q1 2024, 13 out of the top 25 U.S. hedge funds held Bitcoin ETFs, with notable examples like Millennium Management owning 27,263 BTC, worth $1.69 billion—approximately 2.5% of its $67.7 billion in total assets under management.
In 2017, Preqin identified just 55 crypto funds, but by 2024, that number has skyrocketed to nearly 1,200, a remarkable 21x increase. Furthermore, 400 traditional funds now also hold digital assets, showing that crypto is becoming a key area of focus even for non-crypto-focused investors. Despite market volatility, hedge fund managers remain confident in digital assets, expecting clearer regulations and wider adoption to fuel growth.
HBO Documentary on Satoshi Nakamoto:
HBO's new documentary, Money Electric, The Bitcoin Mystery, claims to unearth Bitcoin's creator, Satoshi Nakamoto, focusing on candidates like Nick Szabo, Hal Finney, and Dorian Nakamoto. Szabo, was an early pioneer with Bit Gold, a precursor to Bitcoin, while Finney was the first person to transact in Bitcoin
The documentary raises questions about Bitcoin’s origin, the role of these figures in its creation and the potential implications of unmasking Nakamoto. Nakamoto is thought to own around 1.1 million BTC, and any movement of this sizeable holding could trigger significant market volatility. Conversely, if Nakamoto has passed away without sharing access to the private keys, that Bitcoin may be lost forever. This scenario would effectively reduce the circulating supply, reinforcing Bitcoin’s scarcity narrative and potentially boosting its value in the long term.
It’s unlikely that the documentary will conclusively reveal Nakamoto’s identity, it’s expected to focus on speculation and hypotheses, likely presenting multiple potential candidates. Regardless, the film promises to be both entertaining and educational, offering insights into Bitcoin’s technical foundations and the mystery behind its creation.
Ethereum EIP-7781
Ethereum developers proposed EIP-7781 to reduce block times from 12 to 8 seconds, increasing throughput by 50%, which could enhance decentralised exchanges (DEXs) and decentralised finance (DeFi) applications. The changes would enable cost savings, notably for arbitrage trading between centralised and decentralised exchanges, potentially saving millions. However, some community members are concerned about increased hardware requirements, which could negatively impact smaller, solo stakers, possibly reducing Ethereum's decentralisation.
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