Bitget Research: Crypto Market Fluctuates Downward After CPI Release, Persisting Short Term Risks Require Caution

In the past 24 hours, many new popular tokens and topics have emerged in the market, which are likely to be the next wealth creation opportunities.

Overview

In the past 24 hours, following the release of the US CPI data for July, the market experienced fluctuations and continued to decline. The highlights are as follows:

• Sectors with strong wealth creation effect: Real yield sector (BANANA and AAVE), and Bitget platform tokens.
• Top searched tokens and topics: Ton Network and Bitgo.
• Potential airdrop opportunities: Solayer and Plume Network.

Data collection time: August 15, 2024, 4:00 AM (UTC)

1. Market Environment

Yesterday, the US released the CPI for July, which unexpectedly reached 2.9%. Following the announcement, there is a general consensus that there might be a 25 basis point rate cut in September. Since a 50 basis point rate cut is not anticipated anymore, the market reacted with volatility and a downward trend.

Regarding ETFs, Bitcoin ETFs saw a net outflow of $81 million yesterday, while Ethereum ETFs experienced a net inflow of $10.8 million. Currently, ETF funds are not sustaining consistent net inflows or outflows, making it challenging to drive a continuous trend in the market. As a result, the market trend for BTC continues to be predominantly characterized by range-bound fluctuations.

In terms of sectors, certain assets within the Bitcoin ecosystem have performed well, primarily due to recent developments. Coinbase is set to issue cbBTC soon, which will integrate Bitcoin into the DeFi ecosystem through centralized and compliant custody. There is widespread anticipation for the arrival of BTCfi.

2. Wealth Creation Sectors

2.1 Sector Movements – Real Yield Sector (BANANA and AAVE)

Primary reasons:

• In the current sluggish market environment, the market is seeking projects that genuinely generate revenue and distribute it to token holders. BANANA, a leading Telegram bot project, maintains a stable market share with strong support for its token price. The project's revenue position is objective given the gains in the memecoin market. Recent on-chain data for AAVE shows that the volume of active lending users has reached an all-time high, and an increase in lending users could further boost the protocol's revenue.

Gainers: BANANA has risen by 8.78% and AAVE by 10.4% in the last 24 hours.

Factors affecting future market conditions:

• Market dominance: Market dominance is a critical metric for evaluating these real yield projects. With the limited share of the crypto market, maintaining a leading market dominance is key to sustaining high, dependable income. Currently, BANANA ranks among the top three Telegram bots, and AAVE leads in the lending sector with highly loyal users, both performing exceptionally well.
• Revenue distribution policies: A new proposal by AAVE considers adding a fee conversion feature to return a portion of the platform's net excess revenue to its key users. This move could also lead to the restaking of the AAVE, providing a new source of income for both AAVE and its users.

2.2 Sectors to Focus on Next – Bitget Platform Tokens (BGB and BWB)

Primary reasons:

• Bitget recently announced a smart contract upgrade for Bitget Token (BGB) to help its long-term development and enhance the perks of BGB holders. This upgrade aims to expand BGB's usage in decentralized applications and sectors such as DEX, DeFi, and GameFi. Bitget Wallet’s user base exceeding 30 million, along with a download count in July that surpassed MetaMask, has made the market optimistic about potential price increases.

Specific tokens:

• BGB: Bitget's user base has increased by 2.9 million users, bringing the total to 25 million. It has also attracted about $700 million in capital inflows. Bitget continues to focus on its Launchpool and PoolX products, which could significantly increase future purchasing demand for BGB. It is advisable to keep this token on your radar.
• BWB: Bitget Wallet token, with a total market cap of only $500 million. The wallet sector has strong growth potential, making BWB suitable for long-term holders.

3. Top Searches

3.1 Popular DApps

Ton Network (Blockchain)

Recently, Binance announced the launch of TON on its Launchpool, leading to a continuous rise in the price of the TON token, which briefly surpassed $7. The wealth effect and trading activity are considerably high. Backed by Telegram, the TON ecosystem boasts a vast user base, predominantly featuring gaming projects with simple Tap2Earn mechanics, where users complete tasks to earn platform rewards. The TON token has recently gained significant popularity, and Bitget is the second exchange to offer TON spot trading, with robust trading volume and depth.

3.2 X (former Twitter)

Bitgo:

In a recent interview, BitGo CEO Mike Belshe addressed the role of Justin Sun in their joint venture, downplaying his involvement while highlighting BitGo's enduring commitment to security. According to Belshe, BiT Global has a dedicated team tasked with managing multiple client accounts, ensuring proper asset safeguarding. He stressed that these funds cannot be lent out or handed over to Justin Sun, himself, or anyone else without breaching legal boundaries, which would lead to imprisonment. Belshe reassured stakeholders of BitGo's reliability by referencing their continuous operation of wbtc.network. Bitgo custodies the BTC that backs the issuance of WBTC. Recent deep collaborations between Justin Sun and Bitgo have sparked community concerns about WBTC's security. Previously, WBTC was in a weak pegging state relative to BTC.

3.3 Google Search (Global and Regional)

Global focus:

CPI (Event):

The July CPI mostly met expectations, continuing the year-over-year decline trend with a total CPI annual increase rate of 2.9%, finally dropping below 3%. Overall, the likelihood of a 25 basis point rate cut in September is higher, with the market reaction being muted. The focus now shifts to the upcoming unemployment claims and retail sales data released on Thursday, and the subsequent annual Jackson Hole Economic Symposium.

Regional focus:

(1) In Asia: Interest in projects and sectors is widely varied across the region, with no significant common themes. However, there are localized hotspots. For example, Hong Kong, Singapore, and Vietnam are paying more attention to RWA related projects, with BOME being notably popular among Japanese users.

(2) Europe and the Americas: Search trends in these regions are also quite varied with no universal characteristics. However, there is a notable focus on new blockchain projects including SUI, Celo, Solana, Floki, and Alephium.

(3) CIS region: The main focus in the CIS region is on Blum and Grass, with some memecoins such as Floki and Myro showing good popularity.

4. Potential Airdrop Opportunities

Solayer

Solayer is building a restaking network on Solana, utilizing its economic security and superior execution as decentralized cloud infrastructure to enable higher degrees of consensus and block space customization for application developers.

In July 2024, Solayer announced the completion of a builder’s funding round, though the specific investment amount was not disclosed. Investors include Binance Labs, Solana Labs co-founder Anatoly Yakovenko, Solend founder Rooter, and Tensor co-founder Richard Wu.

How to participate: Stake SOL and supported SOL LST tokens such as jitoSOL, mSOL, bSOL, and INF to earn points each epoch. The mainnet is now live, and users who stake SOL can earn sSOL and platform points.

Plume Network

Plume Network is a modular Layer 2 network dedicated to the RWA sector, specializing in integrated asset tokenization to supply vendor products directly on the blockchain. The project recently raised $10 million in a seed round funding, with investments from Haun Ventures, Superscrypt, Galaxy, and SV Angel.

Plume Network has recently launched its testnet and initiated promotions such as Earn Mile, Check In, and Passport.

How to participate: 1. Visit the project's official website and select Connect Wallet to enter the app interface; 2. Earn Plume miles by completing tasks and check-ins within the platform, such as Swap, Stake, and Speculate.