This column was co-written by Frank Chaparro, Special Projects Director at The Block, and Laura Vidiella of MNNC Group. The views expressed in this column are their own and do not necessarily reflect those of their employers.
Every summer in the crypto world seems to have a unique theme. We’ve seen ICO summer, DeFi summer, NFT summer, and now, to the dismay of some, it’s Mimecoin summer.
Gen Z is jumping on board with memecoins much like they are on TikTok. Out of all the coins, one inevitably goes viral, making the time and stress spent in front of the screen worth it. The dopamine rush is similar to playing an online casino game from the comfort of your own home. But we don’t support it. In March, political memecoins were all the rage. While politics still have a big impact on crypto (and memecoins) today, the focus has shifted to Gen Z-centric memes like “Aura,” “Let Him Cook,” and “Little One.”
This week’s weekly active address count is Solana brush
+0.92%
It has reached a new high of 2 million. This surge is likely partly due to increased activity on Mimecoin. Most of this trading is done on Jupiter, an aggregator for Solana that recently hit a new all-time high in swap volume. However, this new wave of Mimecoins has a lower market cap and faster turnover, which is why today’s volume is lower than during the March frenzy.
This trend is also attractive to traders looking to increase their PnL during periods of generally low volatility, such as summer. Currently, the DVOL index is above historical levels for both BTC and ETH, but this is likely due to the trading event surrounding the launch of a spot ETH ETF, which shows another unique feature of this summer compared to other summers. Perhaps the summer of Mimecoin and ETFs? Surprisingly, the launch and first week of the spot ETH ETF have been successful, given the summer trading expectations and the slight rebound in stocks.
Perhaps less surprisingly, ETH initially fell around 9% after the ETF began trading, but has since recovered somewhat and is now around 4.5% below pre-launch levels. This decline was largely due to outflows from Grayscale’s ETHE, which saw around $811 million leave the fund in the first two trading days, close to 10% of its total initial AUM, and 13% by the end of Day 3. The equivalent mini-trust absorbed some of the outflows, but only 10%. This pace of unwinding appears to have been faster than its cousin, GBTC, which took around 9 trading days to see 13% outflows.
On Saturday, former President and current presidential candidate Donald Trump will take the stage at Bitcoin Nashville, the world’s largest Bitcoin conference. He is expected to discuss his evolving stance on digital assets, outline his vision for the future of the cryptocurrency industry, and outline the regulatory framework needed to support its growth. The overall sentiment is quite bullish, with some volatility expected around his speech. Many traders and analysts are anticipating a potential breakout for Bitcoin, and are hoping that Trump will make a significant pro-crypto statement, such as endorsing Bitcoin as a strategic reserve asset for the United States.
We look forward to seeing what the Spot ETH ETF looks like when our investment colleagues return from their trip to Montauk, Saint-Tropez and Mykonos.
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