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Major Cryptocurrency Drivers in April
This Week’s On-Chain Alpha
Latest developments in DeFi
Major Cryptocurrency Drivers in April
April will be a big month for cryptocurrencies.
The highly anticipated Bitcoin halving is about to happen.
Not only that, there are several well-known projects that are about to release their tokens or undergo major upgrades.
Here are four important cryptocurrency events to watch over the next month:
1. Bitcoin Halving
Image source: The DeFi Investor
The next Bitcoin halving is expected to occur in approximately 22 days. Once effective, it will reduce the number of new Bitcoins in circulation by 50%.
However, it’s worth noting that Bitcoin’s current inflation rate is already very low (less than 2% per year).
So from a fundamental perspective, I don't think the halving is a big deal. But from a psychological perspective, this is not the case. As many people know, Bitcoin has historically performed extremely well in the months following each halving event. Therefore, they are likely to buy crypto assets again soon, expecting history to repeat itself. In addition to this, the Hong Kong Securities and Futures Commission is expected to approve the launch of the first physical Bitcoin ETF in Hong Kong in the second quarter.
All events paved the way for Bitcoin.
2. Stacks Nakamoto upgrade
Stacks is a Bitcoin Layer 2 that makes smart contracts and DApps more powerful.
Stacks’ Nakamoto upgrade has been in development for a long time and appears to finally be rolling out on mainnet starting next month.
The Nakamoto upgrade will:
Allowing the use of $sBTC (an asset pegged to Bitcoin) in DeFi on Stacks.
Reduce network block time from 10 minutes to seconds.
Increase the scalability of Stack Layer2.
This upgrade may trigger a new wave of Bitcoin Layer 2 craze.
The Stacks token $STX can also be considered a beta version of Bitcoin.
Stacks is by far the most popular project built on Bitcoin.
3. Solana airdrop season
Last year, the massive airdrop announced by Jito revived the Solana ecosystem. In April, several other well-known Solana dApps will launch tokens:
Parcl
Drift Protocol
Chimney
All these protocols will be airdropped.
This list only contains airdrops that have been officially confirmed, so there may actually be some that are unannounced.
Large-scale airdrops can have a huge positive impact on the ecosystem because they inject more liquidity into it. For example, here’s what happened to $SOL after the $JTO was announced in November 2023:
Image source: The DeFi Investor
Considering $SOL market cap is now over $80 billion, I think it is unrealistic to expect $SOL to grow another 2-3x in the short term.
However, Solana will likely benefit greatly from these ecosystem airdrops, as it has in the past.
4. Eigenlayer mainnet launch + potential token launch
It is possible that the Eigenlayer token will go live in late April or early May.
There are several reasons for this:
The Eigenlayer mainnet is confirmed to be going live in the coming weeks (which might be the perfect time for Eigenlayer to launch a token at the same time as well).
Many early investors say the token will be released in late April or early May.
Additionally, April may also be the month when the first Eigenlayer Active Verification Service (AVS) goes live. Altlayer is a popular example of AVS, a decentralized protocol for rollup. .
The protocol that chooses to "rent" security from Ethereum through Eigenlayer is called AVS (can be an oracle, side chain, Layer2, etc.)
Many of these AVS projects will likely conduct airdrops for Eigenlayer users, just like Altlayer did when it launched its token a few months ago.
According to the ether.fi team, 8 AVS will soon begin distributing points or token rewards to ether.Fi’s $eETH liquidity re-staking token holders.
Image source: The DeFi Investor
On-chain Alpha
$86 billion of institutional money flowed into Bitcoin over the past 6 months
Image source: The DeFi Investor
As the chart above shows, institutional inflows into Bitcoin have increased dramatically since the launch of the spot Bitcoin ETF.
This got me thinking about what will happen to Ethereum’s institutional adoption if a spot Ethereum ETF is also approved later this year.
It is becoming increasingly clear that institutions are starting to realize that cryptocurrencies are indispensable.
Latest developments in DeFi
The CTFC has reconfirmed that ether is a commodity, raising the possibility of approving a spot ether ETF.
Ethena has announced that the $ENA token will launch on April 2nd. 5% of the $ENA supply will be airdropped to early adopters. (Refer to news link)
Optimism has $3 billion in grants allocated across the Optimism Collective & Superchain.
The NEAR Protocol introduces Chain Signatures, which enable NEAR accounts to sign transactions for any blockchain. The goal is to improve cross-chain user experience.
Circle launches its cross-chain transfer protocol on Solana. Now, $USDC holders can move $USDC across 8 chains with 1:1 capital efficiency.
Zero1 launches Keymaker, a marketplace related to decentralized artificial intelligence. Keymaker's goal is to become the largest decentralized artificial intelligence ecosystem.
Ankr launches Neura, a blockchain built for artificial intelligence. Neura will leverage the security of Bitcoin through Babylon to secure its network.
Polygon launched DApp Launchpad, a portal for developers to enter the Polygon ecosystem. The goal of DApp Launchpad is to improve the Polygon developer experience.
Angle Protocol launches $USDA, a yield-generating and RWA-backed USD stablecoin. $USDA will have several anti-decoupling mechanisms and have the same liquidity as $USDC.
PancakeSwap announces the launch of MancakeSwap, PancakeSwap’s first Mantle Network affiliated DEX. Mancake will pay 60% of its revenue to Pancakeswap.
Liquity demonstrates the key feature of Liquity V2, user-set interest rates, designed to create an efficient market between borrowers and stablecoin holders.
Points Season 2 has been released by ether.fi. The second quarter allocation is 5% of the total $ETHFI supply and will end on June 30th.
Munchables, a popular protocol on Blast Layer2, suffered a $63 million hack. Fortunately, the hackers have returned the funds.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
This article is reproduced with permission from: "Deep Wave TechFlow"
Original author: The DeFi Investor
