29 November 2024

Well, looks like $100,000 has to wait a bit more. It came close last week but history is likely to be made in December 2024 we think.

The good news in this choppy week is that Ethereum is slowly grinding up against Bitcoin. That would signal the start of the altcoin rallies in crypto. We are still early in this bull run!

Today, we analyse Ethereum’s challenger Solana and its ecosystem metrics.

Top-3 stories of the week:

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The newsletter is put together by Giottus Crypto Platform. You can read all the previous issues of Cryptogram here.

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WEEKLY MACROS

• Total crypto market cap - $3.34 trillion - UP  1.2%

• Bitcoin price - $96,101 - DOWN 3%

• The dollar index (DXY) - 105.90 - DOWN 1.2%

• Bitcoin Dominance - 58.26% -  DOWN 3.4%

• Crypto Fear and Greed Index - 78 - Market is in Extreme Greed

THE HOT TAKE

Solana to lead bull market gains among L1s 🚀

Last weekend, Solana reached a new all-time high, while Bitcoin edged closer to the historic $100,000 mark. Solana has emerged as one of the biggest winners in the recent bull market, driven by a surge in memecoin activity.

Platforms like Moonshot, which simplify buying and selling memecoins with features like Apple Pay onramp, have played a pivotal role in attracting curious investors. Meanwhile, Pump.fun, the leading platform for launching memecoins, has seen an explosive increase in activity, with over 40,000 tokens minted daily throughout the past week.

While memecoins may dominate the spotlight as the primary driver of activity in the Solana ecosystem, beneath the surface lies a proven powerhouse quietly generating substantial revenue and fuelling the ecosystem's growth. Let us explore the trends.

1. Dex volume crosses $100 billion monthly

Solana has emerged as the primary beneficiary of Ethereum's high fees, attracting a significant portion of the Ethereum user base seeking cheaper transaction options. Solana DEX trading volume in November has breached $125 billion, almost doubling Ethereum’s volume and is on track to the biggest month ever for on-chain volume.

Why is this big?

• Boosted Liquidity Dynamics: Skyrocketing trading volumes turbocharge liquidity, creating a robust market infrastructure that enhances the flow and availability of assets.

• Minimum Slippage: Increased liquidity improves order execution, minimizing slippage (where executed prices deviate from expected market rates), ensuring traders get optimal deals.

2. Surging fees lead to revenue gains

 This rise in trading activity has reflected itself on the Solana protocol as the network has seen an accompanying surge in fees to new highs. Last week, the network generated nearly $80 million in transaction fees (base fees + priority fees). Half of those fees are currently returned to token holders via burns, resulting in ~$38 million in revenue.

3. Phantom tops the utility app charts in multiple countries

One of the applications benefiting most from Solana’s success is the Phantom wallet. On November 21, Phantom wallet reached its highest ranking in the Apple App Store, ranking 6th overall and 1^st in the utilities category. Based on similarweb data, from user data analysis, Phantom's recent growth is most prominent in Brazil and the United States.

4. Solana tops the users chart across all periods

Solana leads the pack among tracked blockchains, boasting the highest number of users across all tracked time frames. While competitors like Ethereum and Base maintain strong user bases, Solana dominates with 40% of all blockchain users on its network, solidifying its position as the clear leader.

5. Solana ETF hopes live on

Last week, Bitwise, a leading crypto investment firm, has submitted a filing to the US SEC to launch a Solana-focused ETF aimed at institutional investors. With this move, Bitwise becomes the fourth contender in the growing race to introduce a Solana ETF. Bitcoin and Ethereum ETFs are already seeing substantial inflows, serving as a key driver of the current market momentum. The potential approval of Solana ETFs could further ignite institutional interest, unlocking a wave of investments and shaping a powerful bullish narrative.

When can SOL break $400? 

Solana’s rapid growth and innovation across its ecosystem make a strong case for its bullish outlook. With memecoins driving massive user engagement and platforms like Moonshot simplifying access for new investors, activity on the network has skyrocketed. At the same time, Solana’s strong liquidity, efficient trading environment, and growing institutional interest are turning it into a major player in decentralized finance. Key projects like Raydium dominate the DEX space on Solana, while the potential approval of Solana ETFs could unlock even more opportunities.

As Solana continues to command 40% of all on-chain users and sees exponential growth in key metrics, its value proposition becomes increasingly undeniable. With a thriving ecosystem, strong developer activity, and institutional interest reaching new highs, Solana can break the $400 mark in Q1 2025. In fact, we believe that its bull market top can go near $1,000 a token if things work out well.

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If you have any questions or feedback for us, write to us at [email protected]. You can check out the previous issues here.

Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.