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GM, readers both near and far! This is Tokengraph, the best place for you to get a hold of the pulse of the Web3 industry. Today, weâll be going through a 2023 recap and covering some of the most important graphs of the year (thus far).
On todayâs agenda:
Bitcoin Smashes Through $30k
Fundraising is Increasing
Looking at Ordinals through the Data
DeFi and DEX Trading
BTC Miners Are Back
$30k is the new $25k for BTC
Well, we all wondered if it would happen â if it could happen â and here we are. Bitcoin has broken through its $30k barrier. But the real question remains: is this the start of something much bigger, or will we just plummet back into the depths of the bear market?
Source: CoinMarketCap
Bitcoinâs price chart has been and probably always will be the most important graph in all of crypto. Why? Because the rest of the market moves in relation to BTC. Donât understand what we mean? Take a look at this heatmap:
Itâs a sea of green, isnât it? When Bitcoin does well, the entire market tends to swing up. And if an asset outperforms Bitcoin (or underperforms for that matter), itâs usually a pretty big deal. Itâs all relative to the orange coin.
Against all odds, Bitcoin has made steady progress upward in price so far this year. It climbed despite Genesis drama, lawsuits against crypto companies, and an entire banking collapse.
Q1 returns for 2023 sat at over 70% for BTC, the highest weâve seen since 2021 by far. The question everyoneâs asking now is whether the bull market is starting right now â or if it just ended.
Our take? It might not be a hot one, but we say itâs too early to tell. Bitcoin performed incredibly well last quarter, serving as a safe haven in the face of collapsing banks. With the US government rushing to save those banks, though (and seemingly trying to crush crypto as well), who knows what might happen to Bitcoin in the near future.
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âThe Bear Market Is for Buildersâ â the Old Maxim Still Holds True
Mainstream media might have us believe that crypto is a thing of the past, or even worse, a scam that was never more than a passing fad â but this next graph tells a different story. Crypto fundraising has more than doubled since last quarter.
Token sales, infrastructure, and service projects are all seeing considerable upswings in funding right now. At first glance, it might seem surprising that this is happening in the face of the FTX collapse and the crypto contagion that resulted from it â but we would offer that this spike in funding is because of the FTX collapse.
Just because some big companies were corrupt doesnât mean that the technology behind crypto isnât still fully capable of disrupting the entire worldâs economy as we know it. Smart venture capitalists and launchpads know this, and they also know that bear markets are for builders. Theyâre striking while the ironâs hot, aiming to build something bigger and better that will be here when the next bull market comes around.
Layer 2 protocols in particular have seen some massive fundraising rounds, some well into the 100s of millions of dollars. Many of these companies are following Polygonâs zkEVM example, launching zero-knowledge-technology-based blockchains and building competition within that industry.
And we still have newly launched tokens that are doing 10x, 20x, and 50x on their original prices. Truly, there are always opportunities to be found in crypto, and although we canât say when this bear market will end, we can say that crypto is alive and well right now.
The Bitcoin Ordinals Craze: a Story Told through Graphs
The crypto trend thatâs making headlines every week â Ordinals. We now have NFTs on the network that was never meant to have them. And you can inscribe them into the Bitcoin Blockchain forever!
Here, weâll walk you through a couple of very important graphs to help you understand whatâs happening with BTCâs controversial Ordinals. Letâs start with a simple Google Trends graph:
Donât underestimate the power of Google Trends to inform your research! Just look at that spike. Ordinals didnât exist before this year, so of course, the graph is flat until 2023 â but we want to draw your attention to the sheer speed that âBitcoin Ordinalsâ became popular with. And although we canât know for certain whether theyâre here to stay for good, itâs clear that theyâre still only growing in popularity.
Source: Coin Metrics, Bitcoin Magazine
Another important one: Bitcoin block sizes. These blocks are the literal âbuilding blocksâ of the blockchain â they contain a hash of the previous block, a timestamp, and transaction data that is being permanently added to the chain.
Bitcoinâs block size has always been around 1.5 MB â but over the past couple of months alone, it nearly doubled as blocks are being filled with more data than ever before in the form of Ordinals.
Source: Dune Analytics, Dataalways, Bitcoin Magazine
Whether you support Ordinals or not, larger blocks mean that space will be in higher demand, which means higher revenue for miners. And thatâs a great thing for the network as a whole.
Overall, which sector of Web3 is not doing very well right now?
A. Layer 1s B. DeFi C. NFTsB. DePINs
Scroll down to the bottom to see if you're right!
⥠Extra, Extra: Two More Graphs for the Road
DeFi Defies All Expectations
Thanks to the new Liquid Staking protocol trend, DeFi projects are slowly but surely growing their Total Value Locked (TVL) pools.
Source: cryptorank.io
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Bitcoin Miners Are Mounting a Comeback
Bitcoinâs hash rate has increased dramatically over the past two quarters, and with Bitcoinâs rise in price, miners that stayed through this bear market are now reaping their reward. Hash rate is the total amount of computational power focused on mining new blocks in Bitcoinâs network.
â Trivia Answer
Answer: C.
NFTs are underperforming relative to the rest of the industry, even with Blurâs huge airdrop and the general increase in trading volume we saw this past quarter. Itâs likely that the NFT space is still in cool-down mode after NFT mania in 2021.
Web3 Resource of the Day
Bitcoin: Start Of Next Bull Run? | Will Clemente | Podcast from Anthony Pompliano
This short and sweet podcast episode is right in line with the theme of our newsletter today. Pomp hosts Will Clemente, founder of Reflexivity Research and an incredible crypto analyst, on his show to talk about where the market is at currently and where it could be headed for the rest of the year. They touch on all kinds of topics in the less-than-20-minute episode, including âcore network activity, wallet addresses, ordinals, miners, and the lightning network.â
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DISCLAIMER: This is not financial advice. This newsletter is strictly educational and is not investment advice to buy or sell any assets or to make any financial decisions. Do your own research.