The Market
Fed chair Powell has sent a strong signal to the market about an imminent rate cut this July during his Jackson Hole speech. While the market had already priced in at least one rate cut this September before Powell’s speech, his speech has provided further confidence about the easing trajectory ahead. The market is now pricing in an ~80% chance of at least a 1% rate cut by year-end, a significant increase from just a week ago.
The crypto market, buoyed by the encouraging clarity of the improving liquidity conditions ahead, has reversed its divergence from the equities market seen last week. BTC rallied ~8%, while Alts surged ~14% over the past week.
Encouragingly, the Dollar index (DXY) has broken below the support level last seen at the end of 2023, indicating a potential repricing of risky assets to the upside. Meanwhile, BTC is approaching the $65,000 resistance level, a break of which could signal the potential for a return to its ATH.
Updating the cycle anatomy chart coined by Grayscale in Q1 this year, if the historical 3-4 year crypto cycle pattern repeats itself, BTC could peak as early as February 2025.
In our analysis of Alts vs. BTC performance during the crypto cycle,we found that Alts could significantly outperform BTC in the second half of the bull market. We expect this phase to start in Q4 2024 if the historical pattern holds true.
Of course, the pace at which the crypto market can rally depends on how quickly and how much fresh capital enters the market. The 30-day Stablecoin supply has been a rising trajectory since June. Historically, this metric reached around $10B during the market peaks in November 2021 and March 2025. Its ATH was reached in April 2021, when $20B net supply flowed into the market, buoyed by DeFi summer and subsequent Alt L1 summer. As risk sentiment and liquidity return to the crypto market, we expect this metric to accelerate, and once it surpasses $10B, we can be confident that the bull market has arrived.
DeFi Update
TRON has stolen some of Solana’s spotlight as the new meme playground. Sunpump, the TRON network’s equivalent of Pump.fun, quickly reached a similar transaction amount shortly after its launch.
While TRON has successfully established itself as the preferred chain for crypto payment for emerging market countries, boasting the largest USDT supply, it has yet to establish a thriving DeFi ecosystem. Even after the meme rally, Tron’s total DEX trading volume is still only ¼ of Solana’s. Can memes propel TRON’s DeFi ecosystem to the next level? Perhaps, but we don’t believe a healthy DeFi ecosystem is built on the success of memes. In fact, similar concerns on memes have been raised regarding Solana. Memes can attract users to the ecosystem, but sustainable growth comes from a diversified DApps ecosystem where users can not only speculate but also engage with real utilities and enjoy the experience. Solana has shown the potential to enable all of that, with notable DePin, DeFi, gaming, and social projects built on the platform. Moreover, Solana continues to invest heavily in innovation, with initiatives such as Firedancer, Token Extension, and Blinks aiming to enhance its infrastructure and user experience.
We also see the Solana DeFi ecosystem maturing. In addition to the re-staking effort we mentioned last week, Drift, the top Derivative exchange on Solana, has just launched a prediction market called BET, providing a more capital-efficient option for betting compared to Polymarket. Drift is one of the few derivative DEXes that allows cross collateral margin, meaning users can deposit a wide range of collateral to provide as margin for specific bets, even if the collateral isn’t directly correlated with the betting assets. Additionally, users can earn yield on deposited assets through lending, which further improves capital efficiency. Since the launch of BET, Drift market cap has doubled from its intra-month low to about $100M. With a FDV of ~$500M, Drift is still only half of Polymarket’s $1B valuation, despite its core business being a derivative DEX. We believe Drift’s prediction market could bring additional utility to Solana users and further diversify its DeFi ecosystem. Losing some of the meme Frenzy might not be the worst outcome for Solana, as its real utilities will have the chance to shine and engage users more meaningfully.
Top 100 MCAP Winners
Popcat (+97.00%)
Artificial Superintelligence Alliance (+65.90%)
Render (+43.64%)
SATS (+38.31%)
dogwifhat (+37.45%)
Top 100 MCAP Losers
Toncoin (-16.99%)
Helium (-16.56%)
Notcoin (-14.84%)
Zcash (-7.67%)
Litecoin (-2.60%)
About Decentral Park
Decentral Park is a founder-led cryptoasset investment firm comprised of team members who’ve honed their skills as technology entrepreneurs, operators, venture capitalists, researchers, and advisors.
Decentral Park applies a principled digital asset investment strategy and partners with founders to enable their token-based decentralized networks to scale globally.
The information above does not constitute an offer to sell digital assets or a solicitation of an offer to buy digital assets. None of the information here is a recommendation to invest in any securities.
About the Author
Kelly is Portfolio Manager and Head of Research at Decentral Park Capital. Investing across sectors with a thesis driven, deep research approach.
Prior to this, Kelly has led research and product efforts at CoinDesk Indices and Fidelity Digital Asset Management. Kelly has been a TradFi investor for 15 years before joining the crypto space.
You can follow Kelly on Twitter and LinkedIn for more frequent analysis and updates.