TLDR: BTC & ETH is down. Bitcoin dominance is stagnant. The hot coin we look at this week is ATOM.

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Before we dive into both current and new airdrops, make sure to check the latest and greatest news across crypto:

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BTC & ETH Market Update 📈

Crypto is down this week, with BTC being down 2.4% and ETH down a whopping 7.9%:

Bitcoin dominance has pretty much been stagnant over the week, starting at around 49.5%, topping at 50.2% and ending the week at 49.9%. Capital often starts to flow into ETH and other altcoins as the price is increasing for more risk-on assets as well, causing a lower Bitcoin dominance as we have started to see over the course of multiple weeks.

It’s going to be interesting to see whether this trend will continue in the short term, as capital in crypto tends to flow initially to BTC and then further out on the risk-curve, starting with altcoins like ETH and then into mid- or low-cap coins.

The Bitcoin halving is coming up end of March or beginning of April 2024. If history is any guidance we will continue to see BTC dominance climb up until after Bitcoin halving, whereafter people start to look for higher return moving further on the risk curve entering altcoins. This typically starts with ETH, and then on to mid- and low cap coins. Other coins being moved into are typically “ETH killers” like SOL, AVAX and other other L1s. Yet ETH is still the king amongst altcoins, as price action this week also shows.

With BTC dominance increasing and the ETH price decreasing while BTC price is increasing, the BTC/ETH ratio is trending upwards to 17.56 ETH per BTC, underlining that BTC continues to be king in crypto, but alts like ETH are gaining momentum.

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Hot Coin: ATOM 🔥

In this week’s newsletter we dive into Cosmos Hub’s token with the ticker: $ATOM.

The price action and volume is has been growing consistently, and doesn’t seem to stop any time soon:

What is the project about?

Cosmos Network is known as the “Internet of Blockchains”, allowing builders to create their own blockchains (“app chains”) and easily communicate with each other using IBC - Inter-Blockchain Communication Protocol.

Cosmos Hub is the first and arguably most important app chain in the Cosmos ecosystem, with the native token ATOM.

With ATOM, you have the superpower to contribute to the security and governance of the Cosmos Hub. Delegate your ATOM to one or more of the validators on the Cosmos Hub blockchain to earn more ATOM through Proof-of-Stake. You can also vote with your ATOM to influence the future of the Cosmos Hub through on-chain governance proposals.

In other words, if you are interested in Cosmos you are most likely going to use or buy ATOM.

Why is the project exciting now?

There are three main reasons why we feature this project in this week’s newsletter and look at it as an attractive buy right now:

• Airdrops

• Partial Set Security

• Tokenomics

Airdrops

ATOM has historically been the king of airdrops.

This does not seem to change any time soon.

There are so many airdrops coming to ATOM stakers that it is hard to keep up, but in the past ATOM stakers have made eye-wattering money from airdrops such as:

• OSMO (Osmosis)

• TIA (Celestia)

• DYM (Dymension)

• JUNO (Juno Network)

• NTRN (Neutron)

• STARS (Stargaze)

• SCRT (Secret Network

Partial Set Security

Cosmos Hub has since inception struggled to find its place in Cosmos, and this has served as the strongest argument against ATOM, branded by critiques as a useless token that can only be staked on a useless chain (Cosmos Hub) to get yield and airdrops. Due to the governance vote not to approve CosmWasm, Cosmos Hub has never had smart contract capabilities, and hence the amount of things you could do as a user on the Hub has been severely limited.

But that is all about to change.

Last year, core contributors to Cosmos Hub rolled out ICS - Interchain Security - in the form of Replicated Security, to allow new “consumer chains” to rent security from the Cosmos Hub yet still be a sovereign chain.

The first chain to launch as a consumer chain on Cosmos Hub was Neutron, which has CosmWasm and many modules missing on Cosmos Hub, to allow for smart contract capabilities.

What does this have to do with the price of ATOM?

Everything.

Consumer chains “rent security” from Cosmos Hub’s ATOM stakers, just like Ethereum L2s pay a tax to Ethereum Mainnet to secure their chains. Hence, a lot of value capture goes back to the ATOM holders and stakers the more consumer chains go live.

Now, its been limited how many consumer chains have gone live, but that is all about to change with the recent update called “Partial Set Security”.

Partial Set Security essentially make it much easier for chains to deploy as a consumer chain on the Hub.

By now you probably know the flywheel that is starting to spin:

More consumer chains → More activity on Cosmos Hub → More fees to ATOM stakes

Tokenomics

Another argument against buying ATOM has historically been it’s high inflation rate (average around 14%).

A few months ago The governing body of Cosmos Hub has endorsed a proposal to decrease the maximum inflation rate of ATOM from 14% to 10%.

This change in tokenomics along with other positive updates to making ATOM “Interchain Money” is making up a very bullish narrative in this cycle with ATOM as a superior yield-generating asset.