TLDR: BTC is down but ETH is up. Bitcoin dominance is decreasing. The hot coin we look at this week is STRD.

BTC & ETH Market Update 📈

ETH is having a good week compared to the rest of the market, being up 2.2%, while BTC price is down 2.2%.

As a natural result of the BTC price drop, Bitcoin dominance continued to decline this week, peaking at 49.7% at the beginning of the week, ending the week around 47.7%. It’s starting to look more and more bullish both for mid and low cap coins, where capital usually flows to when Bitcoin dominance has peaked and starts to decrease.

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 dropping and the ETH price increasing while BTC price is decreasing, the BTC/ETH ratio is trending downwards to 18.1 ETH per BTC, underlining that BTC continues to be king in crypto, but alts like ETH are gaining momentum.

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 vs Price

• Stride vs other LST protocols

• Utilities

TVL vs Price

The TVL of Stride is exploding these days, 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.

Stride vs other LST protocols

What is important for an LST protocol is to “dominate” an ecosystem. Stride has become the go-to liquid staking protocol in Cosmos, 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 10 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: