The market is gearing up with optimism in the final week before the inauguration. BTC surged above $100K again last Wednesday and maintained this level throughout the rest of the week. The last time the BTCremained above $100K for consecutive days was in mid-December of last year, during the peak of the post-election euphoria, when it achieved a seven-day streak.
The standout performer last week was SOL, driven by the launch of the $Trump meme token on its blockchain. SOL rallied past its post-election ATH, gaining over 30% in just two days following $TRUMP’s debut. SOL’s price had been subdued recently, as newer, shinier narratives captured market attention and skepticism grew around the memecoin frenzy. Ironically, it’s the greatest meme coin of all time–$TRUMP–that has reignited interests in the Solana ecosystem.
On the macro front, last week’s CPI data brought some stability, easing fears of an imminent Fed tightening. Despite a YOY CPI increase from 2.4% to 2.9%, the MoM CPI for December met expectations, while Core CPI slowed to 0.2% MoM from 0.3%. In response, US10Y dropped 15bps following the announcement, and the S&P 500 rose ~2% on the day. This suggests that the market has already priced concerts about a hawkish Fed and is looking forward to pro-business policies from the Trump administration–at least in the short term.
Liquidity conditions are also seeing a temporary boost as the debt ceiling deadline approaches on January 21st. Approximately $640B in the Treasury General Account can be drawn down to avert a debt ceiling breach. Additionally, the People’s Bank of China (PBOC) injected ~$140B into the banking system ahead of the Chinese New Year, providing short-term relief to the liquidity crunch.
As highlighted in last week’s macro calendar, two key macro events have unfolded favorably. We do not anticipate the January FOMC to have a significant impact on risk sentiment, as the market is pricing in a 98% chance of no rate cut. The main driver of the crypto market in the near term will be investors’ expectation of crypto-friendly policies versus the actual deliverables from the new administration. The market has eagerly embraced every positive signal Trump has made about crypto, including the remarkable rise of the $TRUMP token’s market cap to $14B (~$70B FDV) just two days after its launch. DOGE reached a peak FDV around $85B during the last cycle. While it is conceivable that $TRUMP could surpass this level, the price will rise indefinitely. The unfolding volatility will be critical to watch,, along with its broader market impact.
With the $TRUMP pump and the renewed enthusiasm around the Solana ecosystem, the Altseasonindex remains around 50, which doesn't align with a broad based market rally. In fact, the $TRUMP rally has diverted attention from some of the recent popular AI tokens. Overall leverage remains moderate, as reflected in the funding rates for BTC and SOL.
We expect the market to continue repricing based on new policies from the incoming administration. With mounting national debt and rising rivalries from China, how the government balances short-term gains with long-term challenges will be pivotal in determining whether the crypto bull market will peak before a major correction. We are likely to gain clarity within the first 100 days of the Trump administration.
DeFi Update
Despite the hype surrounding $TRUMP, its launch has been undeniably impressive, with holders reaching ~800K in just two days, rivaling many OG memes such as Pepe and WIF. The top DEXes on Solana have processed $8B+ in trading volumes and 2M+ trades, all before the token was listed on any major centralized exchange. Notably, the $TRUMP token was launched on the Meteora DEX using Jupiter’s LFG tech stack.
There are three main advantages to using Jupiter’s LFG tech stack compared to a simple AMM solution..
Sophisticated Liquidity Management with ILM and DLMM
ILM (Initial Liquidity Management): Designed to create a fair launch environment that mitigates bot advantages while providing structured liquidity for new token projects. ILM allows projects to define their own price curve, including initial price, max price and price increase rate, which is facilitated by a DLMM (Dynamic Liquidity Market Maker) pool.
Unlike traditional AMM models, DLMM enables market makers to allocate different levels of liquidity at specific price points, allowing for precise liquidity deployment and price targeting.
Jupiter uses Strict List, a curated subset of verified and reputable tokens, to protect users from trading scam tokens. This feature ensures a safer trading environment for users while not disrupting the permissionless nature of a DEX.
Integration with Jupiter and Moonshot for Wider Distribution
Jupiter is the largest DEX aggregator in the Solana ecosystem, handling between 40-60% of Solana’s total DEX trading volume. Its integration provides projects with unparalleled access to liquidity and market reach.
Moonshot, a leading retail memecoin trading mobile app, simplifies the trading experience by enabling Apple Pay and credit cards.Ranked as the #1 free finance app, Moonshot capitalizes on the growing retail interest in meme trading.
The launch of $TRUMP serves as a compelling showcase of Jupiter and Meteora’s technical stack, highlighting Solana DeFi’s ability to develop sophisticated capability for token launches and liquidity management that rival those of TradFi.
Jupiter’s token price has been under pressure due to the recent weakness in the Solana ecosystem and the anticipation of its upcoming Jupary airdrop. JUP is currently 45% below its ATH from March 2024, with a FDV of $9.6B. This leaves ~40% upside potential to match UNI’s current FDV, or 2.34X upside to reach UNI’s peak FDV during DeFi summer.
As the biggest spot DEX aggregator, perp DEX and launchpad on Solana, we believe Jupiter is well-positioned to become the dominant liquidity layer on Solana, benefiting significantly from the Solana ecosystem’s growth.
Top 100 MCAP Winners
TRUMP (+555.40%)
Fartcoin (+131.93%)
SPX6900 (+47.28%)
Raydium (+41.01%)
Solana (+33.68%)
Top 100 MCAP Losers
Sonic (-16.75%)
PENGU (-16.43%)
MOVE (-15.32%)
Brett (-14.86%)
Mantle (-14.59%)
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 Co-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.
