TLDR: BTC & ETH is up slightly. Bitcoin dominance is up. The hot coin we look at this week is STRD.

BTC & ETH Market Update 📈

Crypto is up a little this week after weeks of being down, with BTC being up 1.6% and ETH up a mere 0.4%:

Three weeks ago - before the spot Bitcoin ETF - ETH saw a price surge of almost 15%, so it’s natural to see a little bit of a pullback and stagnation. At the same time, it seems the selling of BTC via the spot Bitcoin ETF is slowing down. Up only from here? Time will tell...

Bitcoin dominance has been growing this week, starting at 48.7%, topping at 49.25% and ending the week at 49.1%. With the Bitcoin selloff slowing down and hence the price of BTC increasing over the week more than for example ETH, it is natural that Bitcoin dominance would follow suit. 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 on the rise, the BTC/ETH ratio is trending upwards (despite a large pullback mid-week) ending the week at 18.7 ETH per BTC, underlining that BTC continues to be king in crypto, and that alts like ETH are not gaining momentum against BTC.

Hot Coin: STRD 🔥

In this week’s newsletter we dive into Stride’s token with the ticker: $STRD.

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

What is the project about?

Stride is emerging as one of the most promising liquid staking protocols within the Cosmos ecosystem and the broader cryptocurrency space. This groundbreaking protocol, set to launch this September, offers a unique proposition for investors - the ability to stake tokens while still participating in DeFi activities, trading, providing liquidity, and more with the liquid tokens they receive when staking with Stride.

You can read more about what Stride is building in the article below:

Why is the project exciting now?

There are three main reasons why we feature this project in this week’s newsletter:

• TVL & Fees Up Only

• Stride Dominance

• Utilities

TVL & Fees Up Only

The TVL of Stride is exploding, surpassing and now hovering around $100M. Eventually the price of the native STRD token will have to catchup to the TVL growth, and this is exactly what has started to happen with STRD:

Despite STRD’s recent run, the price of the token still looks attractive to us when you compare the market cap to TVL, where the ratio is only sitting at $93.5M / $267M = 0.35.

Compare that to SOL (Solana) that has also been performing really well, the ratio sits at $1.4B / $46.3B = 0.03!

Now, TVL to market cap is not the only factor that drives price, obviously. That said, it there has been a correlation between the two - especially when it comes to liquid staking protocols. Especially, when fees (as a proxy for usage) continues to climb up:

You can find a full overview of Stride’s key metric on their own stats dashboard, where Stride also list other key metrics besides TVL like like:

• Real yield from various LSTs

• Total yield paid out to STRD stakers

• Total number of users

• Breakdown of TVL based on zones / tokens

Stride Dominance

What is important for an LST protocol is to “dominate” an ecosystem. Stride has become the go-to liquid staking protocol in Cosmos, sitting on 90% of liquid staked tokens issued in that ecosystem. This is similar to how Jito is dominating Solana and Lido dominates Ethereum yet with Rocket Pool catching up.

Yet, STRD is still catching up to other LST protocols in terms of market cap, leaving large room to grow it’s market cap and hence price to catchup to other LST protocols like Lido and Rocket Pool:

Cosmos chains are starting to gain more and more traction across the industry, and with Stride positioned as the go-to LST protocol for all of these, the potential is massive in terms of attracting more TVL and adoption.

When comparing the number of assets you can liquid stake on Stride compared to other LST protocols, Stride is dwarfing them all with currently 13 different assets that is possible to liquid stake, adding more regularly:

Utilities

It’s great to be able to liquid stake any asset, but if there is no utility in that liquid staked token other than holding it, then What is the point?

What you really want is to have lots of utilities, such as add to a liquidity pool, use as collateral to either borrow on a money market or mint on a stablecoin protocol.

Stride has done a fantastic job creating loads of utilities for their LSTs, particularly liquid staked ATOM, stATOM. Just to mention a few utilities with stATOM:

• Trade: With low slippage, stATOM can be traded on many exchanges with deep liquidity:

• Provide Liquidity: Add stATOM to pools on Osmosis, Kujira’s BOW, Levana and many other DEXs

• Mint Stablecoins: Mint IST on Inter Protocol, USK on Kujira and SILK on Shade Protocol. Stride is also helping its users squeeze the most yield out of their LSTs: