Market Shakeout & Recovery

GM Anon!

Earlier this week, a sharp shakeout triggered some brutal liquidations, leaving the market in a state of indecision as it searches for a consolidation zone. Meanwhile, various sectors are posting impressive gains, and in a surprising twist, NFTs are making a comeback! Pudgy Penguins has emerged as the leading blue-chip collection—a remarkable turnaround from its early days. With that said, let’s dive into today’s update!

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TLDR

• Bitcoin ETFs now hold more BTC than Satoshi’s wallet, signaling massive institutional adoption within a year

• ETH ETF flows are ramping up significantly

• Base has surged in capital inflows, surpassing $4B in TVL and outpacing competitors like Arbitrum and Optimism, indicating a shift in L2 capital preferences

• Lido and EigenLayer’s staked ETH levels are approaching all-time highs, highlighting growing confidence in ETH staking

• USDE has overtaken DAI as the third-largest stablecoin by market cap, with a current TVL nearing $5.5B, reflecting increased adoption

• NFTs are back in the spotlight, with Pudgy Penguins leading the charge at a $100K floor price

• AI tokens on Solana, such as ai16z and Fartcoin, are hitting new all-time highs, showcasing the dominance of AI narratives in the crypto ecosystem

• Linea’s ecosystem expansion includes over 230M transactions, a decentralization roadmap, and an anticipated token launch by Q1 2025

• Exciting airdrops like Sonic, Linea, and Pengu signal new profit opportunities in the evolving crypto landscape

Market Updates

BTC inflows have seen remarkable growth, with the amount now managed by BTC ETF issuers surpassing the 1.1M BTC held in Satoshi's wallet. Achieving this milestone in under a year highlights the rapid pace of institutional adoption and the transformative impact of ETFs on the BTC ecosystem.

In a surprising move, the Microsoft board vetoed a proposal to build a position in BTC, a decision that caught many off guard. Meanwhile, ETH ETF flows have shown significant growth over the past month, reflecting strong investor interest. Notably, major issuers like BlackRock have yet to begin advertising the ETH ETF, suggesting even greater potential for inflows once marketing efforts commence.

This past week witnessed some of the most intense liquidations in the market since 2022, highlighting the heightened volatility as the market moves higher.

Airdrops

The success of the Hyperliquid airdrop has reignited market excitement around airdrops as a key opportunity. This past week saw the Magic Eden airdrop, which, despite a downward price trend, is widely expected to gain significant momentum in the near future. Looking ahead, several highly anticipated airdrops are generating attention, including Fantom Sonic, Pengu, Fuel, and Tensor. Additionally, major protocols like Linea have announced plans for their airdrops in 2025. Stay tuned, as we’ll delve deeper into Linea’s developments later in this letter.

Base 

Over the past month, and especially in the last week, Base has seen a surge in capital inflows, solidifying its position as a rising force in the L2 space. With $376.1M in inflows and a net positive flow of $289.5M, it’s outpacing competitors by a significant margin.

What stands out is the noticeable capital outflows from early leaders like Arbitrum and Optimism, despite their first-mover advantage. This shift suggests a changing preference among users and capital within the L2 ecosystem, making Base's momentum a trend to watch closely.

Furthermore TVL on Base surpassed $4B as of December 8th 2024.

Staked ETH

Coupled with the declining ETH supply on exchanges, Lido staked ETH is rapidly approaching its all-time high from earlier this year, signaling renewed confidence and growing interest in Ethereum's staking ecosystem. The APY has remained relatively stable, averaging around 3%, offering participants an attractive and predictable yield.

As we move deeper into the bull market, the momentum behind ETH staking is expected to accelerate further. Increased market optimism will likely drive the total staked ETH to new record highs.

This development is particularly noteworthy as it ties directly to the growing momentum behind the ETH ETFs. Many investors are hopeful that, if approved by the SEC, these ETFs will allow staked ETH to become an integral component of their holdings. Such a move would not only enhance staking adoption but also reinforce ETH's position as a leading asset in DeFi and institutional portfolios.

The surge in staked ETH on Lido is not happening in isolation—it’s accompanied by a remarkable climb in staked ETH on EigenLayer. EigenLayer's TVL has now reached $18.75B. After experiencing a mid-year dip, the platform has steadily regained momentum and is approaching its all-time high.

Stablecoin Arena

USDE has officially surpassed DAI, securing its position as the third-largest stablecoin by market capitalization. This milestone highlights the growing adoption and confidence in USDE within the crypto ecosystem. The TVL for USDE currently stands just shy of $5.5B, reflecting significant liquidity and utility.

Verifiable Web

Dive into the fascinating world of the Verifiable Web with Lemniscap’s latest report. This groundbreaking exploration reveals how cryptographic proofs, or "web proofs," are reshaping the internet by replacing trust with verifiable authenticity. Imagine a web where users can prove the origin and integrity of their data without relying on centralized entities—a true game-changer for privacy, decentralization, and data ownership.

The report highlights practical use cases like expanding airdrop eligibility beyond on-chain activity, creating on-chain credit scores, and even automating verification processes in industries like AI and employment. This isn’t just theory; the adoption of web proofs is already sparking real-world applications, driving innovation in data portability, integrity, and monetization.

If you’re curious about how this new paradigm could redefine the way we interact with the internet, don’t miss this deep dive into what might become the backbone of the decentralized web.

Read the full report here.

Majors & Memes

This week brought notable movement across the DeFi landscape, with several tokens posting impressive gains. Leading the charge were Solana Swap (+71.4%) and Hyperliquid (+52.4%), while Aave (+46.2%), dYdX (+23.1%), and EigenLayer (+29%) also showed strong performance. Other key players like GMX (+15.8%), Aerodrome (+18.8%), Uniswap (+17.1%), and Sushiswap (+52%) demonstrated resilience in the market. Additional DeFi-related protocols, such as Ethena (+7.6%), Lido (+8.4%), Raydium (+10.2%), and Chainlink (+22.9%), posted solid gains, signaling renewed confidence across the sector.

While the major meme coins in the top 100, such as Pepe (+11.3%) and Floki (+3.2%), experienced more subdued action, smaller and niche assets captured attention. Notably, Fartcoin soared an astonishing 206%, becoming one of the standout performers of the week. In the Solana ecosystem, trading volumes had recently cooled but are now climbing again. The AI agent narrative continues to shine, with Virtuals (+20.4%) and AI16z (+94.4%) posting notable gains, while AIXBT saw a decline in both volume and mindshare. Over in the Bitcoin ecosystem, Runes made a noticeable comeback, highlighted by DOG TO THE MOON, which is nearing a $1 billion market cap, showcasing the growing momentum around Bitcoin-based assets.

Trading bot volumes are picking up again.

Trojan is now the most popular trading bot for users.

NFTS

NFTs are making a remarkable comeback, with Pudgy Penguins taking center stage. The collection has soared to prominence, now commanding an impressive floor price of over $100K. Adding to the excitement, the Pengu airdrop is shaping up to be one of the most highly anticipated events of this cycle. What's even more intriguing is that this surge is far from peak mania—there's likely much more to come.

Notably, no Ordinals collections have cracked the top 10 rankings yet, but this is unlikely to remain the case for long. When Ordinals do make their entrance, expect the move to be both swift and impactful. As highlighted in the latest M6 Labs report, the stage is set for significant shifts in the NFT landscape. Read that report here.

Linea

Linea, a Layer 2 blockchain developed by ConsenSys, has recently made significant progress toward decentralization and network enhancement. In November 2024, the Linea Association, an independent non-profit organization based in Switzerland, was established to oversee the network's open-source technology and ecosystem governance. This initiative signals a move toward transitioning the network to community-led management, setting a strong foundation for a decentralized future.

One of the most anticipated developments is the upcoming launch of the LINEA token, expected by the end of Q1 2025. While specific details about the token's structure and use cases are yet to be unveiled, it is poised to play a key role in governance and utility within the Linea ecosystem. The token launch represents an important milestone as the network continues to align with its vision of decentralization.

Linea has also outlined a detailed roadmap for decentralization, which includes plans to implement a proof-of-stake model for block validation. Validators will stake tokens to participate in the QBFT consensus algorithm, transitioning Linea from a permissioned system to a community-driven, permissionless network. This move is aimed at increasing the network's resilience and empowering its community.

A more detailed guide on Linea's developments and opportunities will be released on Coiners. Join for free to stay ahead of the curve and profit from this exciting evolution!