This is a segment from the Empire newsletter. To read full editions, <\/em>subscribe<\/em><\/a>.<\/em><\/p>\n I know I\u2019m not alone in thinking that this is one of the weirdest market environments I\u2019ve encountered.<\/p>\n The selling on the equities side makes sense, and there are a few reasons for that, from a disappointing US consumer confidence reading to the tariff overhang. The crypto side of things is a whole different can of worms.\u00a0<\/p>\n So we can agree that memecoins are a big part of the negative shift. I hesitate to label all of the most recent token launches \u2014 i.e. MELANIA, TRUMP and LIBRA \u2014 memecoins<\/em>, but I do think they all contributed to the larger exhaustion. While they were meant to be a fun, smaller part of crypto, their dominance in the narrative has clearly led to burnout.\u00a0<\/p>\n We\u2019re seeing that in the data, with CME traders pulling back and acting wary. Perp traders, on the other hand, have been slightly more active, adding some BTC longs though, notably, longs are getting punished right now.<\/p>\n \u201cCME traders remain defensive. Open interest remains flat while premiums have stayed in deep single digit territory and the February contract currently trades below spot. Annualized March futures premiums are subdued at 5.7%, with the daily next month premium declining to lows not seen since the early July Mt. Gox driven market downturn,\u201d K33 wrote.<\/p>\n For perp traders, buying the dip didn\u2019t quite pay off.\u00a0<\/p>\n \u201cPerps have traded at discounts to spot for several weeks, but this discount narrowed amidst the open interest spike [since Monday]. Further, funding rates on Binance reached neutral terrain as leverage climbed, pointing toward traders entering longs with leverage. This behavior was quickly punished in the market, with long liquidations amplifying the move lower.\u201d<\/p>\n But it really isn\u2019t all doom and gloom, as Bitwise\u2019s Matt Hougan noted.\u00a0<\/p>\n The institutional adoption notably hasn\u2019t stopped, and everyone I\u2019ve spoken to is still rather bullish on the overall environment noting how favorable it is once we get away from crime szn.\u00a0<\/p>\n That\u2019s not to say we shouldn\u2019t tread carefully, but there are some potential winners out there to keep a close eye on. K33 noted, in a separate report this morning, that Aave is an example to watch, given its growth.<\/p>\n \u201cA constructive regulatory regime gives DeFi a new lease on life. Leading platforms such as Aave are now free to pursue innovative avenues that may have previously carried more questionable risk, such as revenue-sharing tokenomics,\u201d K33 analysts wrote.\u00a0<\/p>\n To add to that, the idea is that DeFi could also gain from actual regulatory clarity (which we still haven\u2019t seen). Institutional players, for example, could integrate various DeFi products into portfolios \u2014 especially if spot ETH ETFs add staking.\u00a0<\/p>\n I rarely opine, but I do think that this painful shift away from the memecoin narrative is a necessary one. There are pockets of opportunities within the current market if\u0336 \u0336y\u0336o\u0336u\u0336 \u0336f\u0336o\u0336l\u0336l\u0336o\u0336w\u0336 \u0336y\u0336o\u0336u\u0336r\u0336 \u0336h\u0336e\u0336a\u0336r\u0336t\u0336<\/em>.\u00a0<\/p>\n No, but really, the take that there\u2019s still demand for projects that properly show crypto\u2019s use cases is one I personally believe. And that\u2019s not just reserved for stablecoins and RWAs.<\/p>\n Get the news in your inbox. Explore Blockworks newsletters:<\/strong><\/p>\n This is a segment from the Empire newsletter. To read full editions, subscribe. I know I\u2019m not alone in thinking that this is one of the weirdest market environments I\u2019ve encountered. The selling on the equities side makes sense, and there are a few reasons for that, from a disappointing US consumer confidence reading to […]<\/p>\n","protected":false},"author":2,"featured_media":376007,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[230,225,221,227,226,228,229,60,223,224,222],"class_list":["post-376005","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-brave","tag-coinbase","tag-crypto","tag-decentralised","tag-decentralized","tag-decentralized-exchange","tag-erc-20","tag-featured","tag-meme-coin","tag-robinhood","tag-solana"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/376005","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=376005"}],"version-history":[{"count":1,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/376005\/revisions"}],"predecessor-version":[{"id":376010,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/376005\/revisions\/376010"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/376007"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=376005"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=376005"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=376005"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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