Narratives of the week : June 20

Altcoin decimation, ETH beta outperform, $DJT controversy, Mich gets liquidated

Jun 20, 2024

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

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$BTC small dump, and altcoin capitulation ?

The last edition of this newsletter was 11 days ago, and $BTC lost 6% since then, while most altcoins are down more than 15% since then. Altcoins have been truly decimated this week, especially on June 18 when a large liquidation cascade happened, and the OTHERS/BTC chart revisited levels not seen since June 23, very close to the bottom of that chart.

$BTC dumped from $69k to $64k and is now around $65K which is a support and could be a higher low on high timeframes. It makes sense for altcoins to bounce after this week’s capitulation, but $BTC is still so “high” on a relative basis that it has a lot more downside compared to alts. One possibility would be that $BTC still has lower to go but alts/BTC have bottomed. Anyway, I remain bullish and fully allocated, but the past 2 weeks have not been agreeable PnL wise.

$BTC ETFs have been selling non-stop for more than a week, but on the other side, Michael Saylor accumulated 12k $BTC over the last 3 weeks. And now the German government seems to be selling $BTC too :

$ETH stands at $3550 right now, and has been outperforming $BTC during the last 10 days.

ETH beta coins outperform

The best performers of the week have been some ETH beta coins. There have been two positive pieces of news for $ETH this week :

Eric Balchunas announced that the S1s could be approved as soon as July 2, which means that the $ETH ETF could be trading in less than 2 weeks

Consensys announced that the SEC dropped its charges alleging that sales of ETH are securities transactions. $ETH is officially not a security

As a result, $ETH and ETH related coins reacted positively :

$ENS : +35% from its June 11 bottom.
$LDO : +27% since June 11.
ETHBTC wen from 0.052 to 0.055.
$PENDLE, $UNI, $MKR and $SSV have also been among the top performers of the week. All these coins are ETH beta and ETH DeFi, but the L2s have not showed any strength on the opposite.
$ONDO is also unstoppable on a relative basis, when you chart it against altcoins

Michael Egorov $CRV loans finally get liquidated

The founder of Curve, Michael Egorov, has been holding gigantic amounts of $CRV (worth several hundred million $ one year ago) for months, and he has been borrowing USD against CRV collateral on all the available venues, which put him at risk of liquidations each time $CRV was going too low. This already happened once around a year ago when he sold a lot of his $CRV OTC at a discount to avoid being liquidated, but $CRV has been trading so heavily that there has been a risk of liquidations in the last 2 weeks again.

And actually that risk materialized on June 13, with a massive liquidation candle that brought $CRV from $0.36 to $0.22 in one hour. Some people have seen this as very good news since it was a Damocles sword over the price of the token, and now that Mich has finally been liquidated, this overhang disappears, and we end up with a token at low valuation that remains the token of one of the most important DeFi protocols. Same for $CVX, which is the second main token of the whole Curve ecosystem. Both of them pumped since the liquidation cascade : +85% for $CVX and +35% for $CRV.

Zoomer Oracle wrote a detailed thesis presenting the rationale for buying them here :

$DJT, Martin Shkreli, GCR and a $100M bet

Three days ago, there have been rumors about Donald Trump launching his official memecoin, with ticker $DJT. This quickly lead to immense volume on the coin, as well as a strong pump from $50M to almost $400M market cap in a few hours.

“For some reason”, Martin Shkreli started heavily shilling it and defending the idea that it was in fact an official Trump coin. A few hours later, Alex Wice offered him to bet $1M that the coin was fake. Shkreli agreed to do the bet, and then GCR offered to do a $100M bet.

A few hours later, zachxbt proved that Shkreli was actually behind the $DJT token, and that he had some sort of connection with Barron Trump through one of his friend or something… So of course this is nothing like an official Trump coin, and the bet will not take place since Shkreli wants it to be considered “real” if it gets endorsement from anyone close to Trump (such as Barron) but not necessarily Trump himself.

The $DJT coin dumped from $400M to $80M before pumping back to $170M market cap now.

A few large new coins have been launched

A few large coins have been launched lately. Two of them are AI-related, and even more precisely GPU-related : $IO (io.net) and $ATH (Aethir). $IO was heavily fudded by Martin Shkreli a few weeks ago, and he actually convinced me not to long this coin. But $IO still managed to launch at relatively high valuation, and it even pumped almost 2x post-listing. Right now, its FDV is higher than $3bn while the leader of the GPU space among altcoins, $RNDR, trades above $4bn FDV. $ATH FDV is right below $3bn, and I’d say both $IO and $ATH trade surprisingly high, when you consider both the Shkreli FUD and the very bad sentiment towards low float VC coins.

Another major launch this week was $ZK, the token of zkSync. zkSync is a zk-rollup, which is also a zk-EVM, and which was one of the most heavily airdrop-farmed token in existence. Check if you are eligible to the airdrop here. Some people received a very significant airdrop, despite the fact that the FDV at launch is not very high on a relative basis : the current FDV for $ZK is $4.5bn, while all the “s-tier” L1/L2 tokens (ARB, OP, APT, SUI, TIA, STRK) are trading between $7bn and $9bn.

The next important launch is the launch of $ZRO, the token of LayerZero, today. It’s trading below $4bn FDV right now, which is between undervalued (on a relative basis) and fairly priced. Check if you are eligible here.

What else happened in the altcoin market ?

$TON remains one of the strongest tokens overall, with the mindshare among CT getting higher every higher. I posted the tweet below on the day everyone appeared to be bullish on TON, and not so surprisingly, it was also the local top. I still have a hard time switching my bias to bullish on this coin because it’s already so large…

As usual when the market sells off, the “best performers” often end up being the low beta dino coins. $XRP and $XMR for example did particularly well versus the market in June.
One of the worst performing sector over the last 10 days has been BTCfi, especially the coins that I mentioned in last edition : they basically all retraced their gains, $STX $ORDI, and the Rune coins (WZRD, PUPS, DOG…).

AI coins have also been largely underperforming, but have also bounced the most in the last 2 days, especially $FET for example which is literally up +50% from local bottom.
The Kraken exchange has been exploited, and Certik (smart contract audit firm) allegedly exploited them for $3M and waited 5 days to disclose vulnerability. Only in crypto…

Thank you for reading this article,
Cheers,
Viktor.

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