December recap : narratives, best-performers, and coins to watch

SOL / BONK / Alt L1s / SEI / BRC20 / OP

Welcome to this monthly recap, I am Viktor and you can find me here on Twitter and here on Telegram. Enjoy your reading !

Main events that happened in December :

• The highly anticipated $DYDX unlock happened on December 1. This was a huge unlock that almost doubled the circulating supply of $DYDX tokens. It did not have a really meaningful impact on $DYDX but it seems to have been slightly bearish anyway. It looks like $DYDX is a very PvP coin, so I probably won’t trade it too much.

• The main launch and airdrop of December has been $JTO, the coin of Jito, which is a liquid staking provider on Sol that uses MEV revenue to increase the staking yield. I expected $JTO to launch at around $1, which corresponded to $1Bn FDV, but it almost instantly reached $2 when it launched, and even climbed to $4.4 during the 2 days that followed. The post-airdrop pump happened immediately, which means that market participants have gotten used to long airdrop coins… maybe the next time it won’t work that well ?

• $WLD had a very brutal 2-day pump this month, with almost 2x gains. The main catalyst behind this had been the fact that the contract with $WLD market makers has changed, and the impact was that the circulating supply went down and under the new contract terms, market makers had less incentives to keep the price suppressed. Add lower liquidity to the cocktail, and a lot of shorts on a “hated coin”, and you had the recipe for short squeeze. The lesson is that even with a gigantic FDV, a coin can pump substantially when the float is extremely low.

• Tree of Alpha has a Tree news service, and launched this month the $TREE utility token, that is also considered as a memecoin for some people. A huge chunk of the supply has been airdropped to Tree NFT holders, and the price of $TREE has dumped in the first days, and has basically not been moving since then, despite being at a very low $10M market cap.

• Not many coins launched in December, besides $ACE (Fusionist, an infrastructure layer for social and gaming) and $NFP (NFPrompt, a gen AI + NFT project). $ACE had an initial pump that got retraced, and $NFP has been mostly trending down.

• The most manipulated coin of the year, $TRB, decided to end the year with a bang by pumping from $200 to more than $500 before dumping back to $200 in a few hours… A beautiful Grachev candle during the very last hours of 2023. How poetic !

Main narratives of December :

SOL does not stop

The main winner of December, if there was to pick one, has been Solana. It went up +71%, after 2 months of similar magnitude outperformance. $SOL started the month at $60, closed at $100, and reached a local top at $125. The market likes round numbers : $SOL literally started the year at $10, which means it 10x’ed this year, and currently stands in the $45-$50bn market cap.

The comeback of Solana has been impressive, it is now the obvious 3rd crypto asset one should buy after BTC and ETH, to get exposure on crypto. I think SOL is very likely to remain a best performer during the whole bull run, and it should outperform ETH overall, even if $ETH goes to $7k-$8k. However, after such a violent run, SOL can be expected to stabilize for a bit.

Most of the Solana ecosystem coins did very well too, for example : $NEON (+365%), $HNT (+130%), $RAY (+215%), and obviously $BONK (+250%) as the most direct beta. $JTO launched at the beginning of December, and had the post-launch pump pattern during 2 days before bleeding endlessly. $PYTH launched in November and did more or less the same thing, it bled versus SOL during the whole month of December.

The Alt L1 trade is so back

The incredible $SOL run revived the whole alt L1 trade. Almost all of the top 50 alt L1s outperformed the market in December. The first one that comes to mind is $AVAX, because of muscle memory of the 2021 bull run, traders are used to run the SOLAVAX playbook, and $AVAX did also have a very strong month with a +80% pump.

The second 2021 alt L1 that performed very well in December has been NEAR with a 2x month. I don’t follow NEAR very closely but I think it benefits from a few trendy narratives such as data availability (DA) and AI, and it is considered as more Ethereum aligned with its new L2/rollup positioning.

$MINA is also among the best-performing alt L1s in December (+90%), it is a coin I like for a few reasons : only zk L1 on the market that people know + the market cap is not so large (still <$2bn after the pump) + most of the supply is now circulating (ie less selling pressure) + not an EVM chain, which has been bullish in terms of price in the last months.

Here are the performances of the other alt L1 coins in December :

• $ADA : +58%

• $DOT : +50%

• $ROSE : +58%

• $FTM : +55%

• $BNB : +37%

• $EGLD : +55%

• $ALGO : +66%

• $APT : +35%

• $SUI : +30%

SEI and the parallelization of the EVM

I did not mention it in the last category because it represents a new trend on its own, but $SEI has been the best-performing L1 of the month (+133%). Sei Network is a “high throughput, low latency” network built for trading with the Cosmos SDK. But at the end of November, they announced that they were going to launch the first “parallelized EVM”, which basically means that EVM applications (ie all the largest dapps we know) will be able to launch on Sei v2 and benefit from the fast and low cost transactions thanks to “parallelization of execution”.

The market seems to be very bullish on this new parallelized EVM narrative, and one project that wants to parallelize the EVM but still has not launched and is very hyped is Monad : $SEI is the liquid token that anyone can already trade to be exposed to this trend…

Winners gonna win

In the last monthly recap, I wrote about the “winner basket”. It was composed of $SOL, $INJ, $LINK, and $RUNE, and I added $TIA and $AVAX as potential candidates. $LINK and $RUNE have been flat/down in December, so they are now out of this imaginary basket I have in my head. But the other coins remained winners : as I wrote above, $SOL and $AVAX were exceptionally strong during this month, and $INJ and $TIA too.

$TIA launched in November and has been up only since then, closing December with +86% gains, and it has very limited drawdowns. At the opposite of the spectrum compared to parallelized EVM (which corresponds to monolithic/integrated blockchains), $TIA is the main coin of the “modularity” narrative.

$INJ had a monster month too, with +92% gains. $INJ is one of the very first coin that went through the whole 2021 cycle, and is now above its 2021 ATH, which it crossed in December. Below was my thesis for buying $INJ :

The 2023 performance of $INJ is +2700%, and this month I have finally started to see some people getting interested in the “Injective ecosystem”, ie mainly buying shitcoins on Injective… The TVL on the network is below $20M, so just remember that price going up is very often the best reason for longing a coin.

Bitcoin beta coins and BRC20 :

After 2 months of struggling versus BTC, $STX, the main Bitcoin “L2” and most obvious BTC beta coin, did finally outperform bigly, closing the month with +115% gains. And the main beta to $STX did even better : +350% gains for $ALEX. Other BTCfi protocols had a good month : +115% for $SOV (Sovryn), +320% for $MAP.

The new BTC-related category of BRC20 was in fire again in December : $ORDI, the main BRC20 coin, had +280% gains, even after doing a 10X from its October bottom. $SATS also 5x’ed, and $RATS 6x’ed. The new BRC20/ERC20 plays went ballistic too : $MUBI almost 10x’ed, and $BSSB and $TURT too.

BONK pump and memecoin mania :

In last month recap, I wrote : “In one month, $BONK has done a 30x in price, and it remains the most obvious $SOL beta for me (which is why I am allocated)”. As $SOL continued to pump, $BONK did too, and acted as perfect beta for $SOL. The overall performance for $BONK in December has been an impressive +240% pump, but it actually 9x’ed before dumping. The spot Coinbase and Binance listings around the same day in mid-December ignited the final green candle that market the local top (at $2bn market cap), and since then, $BONK has been dumping and bleeding.

Once the $BONK outperformance dislocates so much from $SOL steady price increase, at some point it can not be considered as $SOL beta anymore and has to go through the classical memecoin top pattern, which is why $BONK did not stop dumping even when $SOL went from $70 to $125 from December 20 to December 25.

But the $BONK insane run ignited a new memecoin mania, mostly on Solana, but also on other chains with the “dog coin on X chain” narrative. A few examples are : $WIF (another dog coin on Solana that reached $300M market cap), $COQ (main memecoin on Avalanche, reached $270M), $TOSHI (main memecoin/cat coin on Base, did a 10X to $100M), $HUAHUA (main Cosmos memecoin / dog coin, went from $5M to $100M market cap in a month). Almost not a single Ethereum memecoin garnered significant attention, but $DOG (”The Doge NFT”) is worth mentioning (+530% before dumping).

ETH and beta coins :

$ETH is known for having been a notably underperforming coin during this whole ETF-driven pump, and that is more or less what happened again in December, because it found a new bottom at 0.05, then bounced strongly to 0.056, and closed the month at 0.054, which basically means a flat monthly performance.

However, the $ETH “pump” at the end of the month seems to have finally initiated a rotation into ETH beta coins, such as $OP (+120%, the fastest L2 horse ?), $ARB (+54%), $LDO (only +12% in the month, but 2 strong last weeks), $MATIC (+27%), $ETC (+18%), $ETHW (+23%), $METIS (+270%), $BOBA (+77%).

As you can see, $ARB and $OP have been pumping the hardest, and this makes sense in the context of the EIP-4844 update set for February 2024, and acting as a positive catalyst. When people want to be exposed to L2s, they mainly buy $OP and $ARB. We will see if that changes in the future when more and more L2s are launched.

Best-performer list :

Best-performers in the top 100 in December :

• $ORDI : +280%

• $BONK : +250%

• $ICP : +190%

• $SEI : +130%

• $HNT : +130%

• $OP : +120%

• $OSMO : +120%

• $STX : +116%

• $BSV : +107%

• $NEAR : +95%

• $INJ : +93%

• $WOO : +88%

• $TIA : +86%

• $AVAX : +80%

• $SOL : +71%

• $ROSE : +58%

• $FIL : +58%

Smaller coins worth noting that had a good performance in December :

• $ALEX : +350%

• $METIS : +272%

• $DESO : +255%

• $RAY : +215%

• $NTRN : +140%

• $KDA : +123%

• $ASTR : +108%

• $MINA : +90%

• $KSM : +75%

A few additional comments about some coins and narratives :

• Another narrative that had a few winners in December was DePIN (decentralized physical infrastructure) : $HNT (+130%), $FIL (+58%), $RNDR (+30%), $AKT (+48%), $POKT (+70%). Keep DePIN in mind for long-term narratives with potential.

• New coins tend to behave better than old coins in terms of price. A lot of the coins launched in 2023 had very strong pumps at the beginning of December : $MEME, $FLIP, $TIA, $JTO, $TOKEN, $BIGTIME, $NTRN, $NEON, $PRIME. When the market is hot, it will find any excuse to degen long a coin, and being “new” is a serious advantage in this attention economy.

• Many coins of the Cosmos ecosystem have been performing very well in December : $OSMO (+120%), $INJ (+92%), $NTRN (+140%), $EVMOS (+62%), $KUJI (+24%), $SCRT (+35%), $SEI (+130%), $TIA (+86%). Don’t fade this ecosystem. In the same time, buying $ATOM to get exposure to the ecosystem is usually not a great strategy pricewise, because it tends to underperform.

• $ICP (Internet Computer) has been one of the best performers of December out of the top 100 coins, with +190% gains. Alt L1, very hated coin (down only price action until recently), AI, RWA, DePIN, I honestly don’t know why $ICP pumped so much, but I see a lot of buzzwords related to it. I will definitely fade that one, because at $7bn market cap, I think this is poised for underperformance… but who knows !

• AI and gaming are two massive narratives that have done very well in November, but were less explosive in December. They did not underperform neither, but were on par with the market. They will probably remain topics that will come back over and over again during the bull.

• My current list of favorite altcoins and narratives for short to mid-term longs : Winners (SOL, INJ, TIA, AVAX), SEI (parallelized EVM), MINA (zk L1), IMX (Gaming), RNDR and FET (AI), L2s and ETH beta (ARB, OP, LDO), BTC beta and BRC20 (ORDI, STX).