Introduction

This month, the anticipated bull market due to BTC halving did not materialize as expected. Instead, it has been characterized by a downward trend since the beginning of the month. This trend was accompanied by the postponement of the anticipated rate cut in the United States and the continuous outflow of BTC spot ETFs. Consequently, there has been a surge in negative sentiment regarding the future market performance, leading to a significant decline in the market capitalization and trading volume of cryptocurrencies. Additionally, the impact of reduced BTC miner income began to manifest towards the end of the month, resulting in varying degrees of decline in the stock prices of listed mining companies. Some mining machines have approached their shutdown price, further weakening the momentum for a rebound in the subsequent market and delaying the expected timeframe.

1 、Macro Perspective

1.1 Postponement of the Anticipated Rate Cut in the United States Affects Cryptocurrency Market Negatively

On April 10, 2024, the US CPI data was released, showing that the US core CPI had exceeded expectations for three consecutive months, both on a year-on-year and month-on-month basis:

Following the release of the data, the futures of the three major US stock indices fell, and the US dollar index saw a short-term rise. The CPI data serves as a crucial reference for when the Federal Reserve will cut interest rates this year. Since the end of last year until the beginning of this year, the market has been optimistic about an earlier rate cut by the Federal Reserve. However, the continued stability and strengthening of the US economy have repeatedly thwarted analysts' predictions of a rate cut.

At the beginning of the year, some opinions believed that the combination of BTC's fourth halving, BTC spot ETFs, and the expectation of a rate cut by the Federal Reserve would likely usher in a new bull market cycle for the cryptocurrency market. However, the "stubbornness" of US economic inflation has to some extent dampened the entire market. With the release of April's CPI data in the US, the cryptocurrency market has lost hope for a rate cut in May, which has become an indirect factor contributing to the continued downward trend in April.

1.2 Approval of ETFs in Hong Kong, Physical Redemption and Issuance Become Competitive Advantages

On April 15, Huaxia Fund (Hong Kong), Bosera Fund (International) Co., Ltd., and Harvest Fund Investment issued a statement announcing that they had received conditional approval from the Securities and Futures Commission (SFC) of Hong Kong to issue Bitcoin and Ethereum spot ETFs. With this announcement, Hong Kong became the second region after the United States to approve a Bitcoin spot ETF and the first region to approve an Ethereum spot ETF.

Hong Kong's clear regulatory framework has made it a reality to swiftly approve BTC and ETH ETFs, giving Hong Kong an advantage over the United States in regulatory policies. More importantly, the attitude and actions of the Hong Kong Securities and Futures Commission demonstrate its determination and initiative to excel in the field of cryptocurrency markets, providing crucial support for Hong Kong to regain global capital confidence.

Although the data from the first day of listing for the six ETFs in Hong Kong showed a significant difference compared to the trading volume of the first day of the Bitcoin spot ETF in the United States, the market remains optimistic. ETFs, as a new channel for traditional institutional investors to enter the market, are expected to attract more institutional investors. Moreover, the support for physical redemption and issuance of Bitcoin and Ethereum spot ETFs in Hong Kong will also drive overall market growth, potentially achieving unexpected breakthroughs.

1.3 Significant Decrease in BTC Miner Income, Associated Impacts Begin to Surface

According to the latest report from CoinShares, after the BTC halving, miners are facing a significant increase in costs, with electricity and overall costs almost doubling. Calculated at $0.06 per kWh, post-halving, Antminer S19, T19, Whatsminer M33S+, M30S+, and even less energy-efficient miners are nearing their shutdown price, with the average production cost of BTC estimated to be around $53,000.

Additionally, according to Glassnode data, although after the halving, Runes transactions have generated approximately $117 million in Bitcoin network fee income, over time, Bitcoin fee income has significantly declined, with Runes transaction fees on April 28 amounting to $1.03 million. As the popularity of Runes decreases, miner income decreases, with electricity costs for the most advanced Bitcoin miners currently exceeding 50%.

To cope with the decline in income after the halving:

From the performance of mining companies, they remain optimistic about the market and actively respond. They aim to increase revenue, improve revenue structures, and consolidate their market positions through cost management, more efficient equipment, and asset diversification, although the impact of the halving has not yet faded, efforts to hedge against it are being gradually absorbed.

2、 Industry Data

2.1 Market Cap & Ranking Data

In the tumultuous market of this month, the market cap of the top 10 tokens has seen varying degrees of decline, accompanied by some changes in rankings. USDC has surpassed both STETH and XRP, jumping to the 6th position, while TON has ascended to the 10th position. Looking at the 30-day price changes, DOGE has experienced the largest decline at 37.6%, followed by SOL at 36.6% and XRP at 21.6%. BTC ranks 6th with a decline of 14.1%.

The downward trend in this month's market started from the beginning, with occasional rebounds occurring (approximately every 5 days). The overall downturn was primarily led by BTC, especially after the news of the delayed expectation of a rate cut in the United States. The slope and speed of decline increased noticeably thereafter. Although TON experienced some decline, its frequent ecological actions have empowered it, making it the best-performing token among the top 10, excluding USDT and USDC, and garnering consistent market confidence.

Among the top 100 tokens by market cap, the highest gainers in March were XT (+33.1%), WBT (+19.7%), and BGB (+7.3%). ZT, WBT, and BGB are all platform tokens for centralized exchanges (CEX), with ZT and WBT maintaining an upward trend, particularly WBT showing strong momentum, while BGB is currently exhibiting a downward trend. Its growth and trajectory are expected to align with the overall market conditions in May.

Looking at the overall percentage changes in market cap ranking for the top 100 tokens, APT tops the list with a 50.8% decline. This is primarily due to a significant token unlock of approximately $330 million in April. Amidst the market's oscillation and downturn, the anticipation of a large influx of tokens into the market has led to a continuous decline in price and TVL (Total Value Locked) since the beginning of the month, with APT trading at $8.22 as of April 30th, with minimal rebound momentum. Investors are advised to closely monitor token unlocking dynamics, as large-scale unlocks during volatile and downward market conditions may lead to significant short-term losses, warranting caution.

In April, the total supply of stablecoins approached $160 billion, marking an increase of approximately $10 billion compared to March. Looking at the curve slope, this growth is gradually slowing down. Considering the current level of market trading activity, there appears to be a lack of short-term growth momentum. Without significant positive news, this trend of sluggish growth is expected to persist, with the possibility of negative growth in May.

Among the top 10 stablecoins by market cap, the fastest-growing stablecoin this month was FDUSD, with a surge of 73.00%, followed by USDe with a rise of 51.87%. After a slight decline last month, FDUSD reclaimed the top spot in terms of growth this month, while USDe continued its strong performance from the previous month, demonstrating robust momentum and a rapid rise in the stablecoin race. Additionally, PYUSD, a stablecoin launched by traditional payment institution Paypal, currently ranks 12th. Supported by Paypal's cross-border remittance services, PYUSD's issuance has been steadily growing and is expected to enter the top 10 stablecoin rankings in May.

According to disclosures on the PayPal official website, its cross-border remittance service Xoom Financial now allows US Xoom users to convert their PayPal stablecoin PYUSD into US dollars and use it as a source of funds for remittances to recipients in approximately 160 countries/regions worldwide.

In terms of USD inflows, the highest net inflow in a single day was $3.24 billion on April 18th. During April 17th to 21st, the fluctuations in inflows and outflows were particularly pronounced, coinciding with the time around BTC's fourth halving, reflecting the turnover and speculation between long and short positions in the market. However, the net outflow amounts and frequencies remain lower than net inflows. Additionally, from a news perspective, the continued outflow of the US BTC spot ETF is also affecting USD inflows, potentially leading to a reversal in the direction and intensity of USD flows.

2.3 On-chain TVL Rankings

There was a significant fluctuation in the overall on-chain TVL in April, especially with a sharp decline from April 12th to 14th, followed by a slow recovery starting in the third week. However, the oscillating trend is evident, and the recovery momentum is inadequate. Under the current oscillating market conditions, on-chain activity has decreased compared to last month, affecting the development of various ecosystems. The trend of on-chain TVL in May is expected to be strongly correlated with market trends, but the growth trajectory based on fundamentals will gradually increase with the slow development of ecosystems.

The most notable project this month was Renzo, which, despite facing community questioning due to its token model, still occupied the top position in terms of TVL growth (37.8%), surpassing other projects in the top 10 TVL rankings by a significant margin. Additionally, EigenLayer showed signs of stabilizing growth, with large-scale withdrawal of stakes beginning to occur. Its future performance requires close attention.

According to DeFiLlama data, as of April 30th, the TVL of Ethereum liquidity re-staking protocols reached $26.91 billion, with EigenLayer leading with nearly $15 billion TVL, followed by ether.fi with a TVL of over $3.7 billion, and Renzo with a TVL of over $3 billion.

Among the 138 projects with a TVL exceeding $100 million (down from 142 last month), the project with the highest increase in TVL this month was SubseaProtocol (+1071352%). Additionally, HiveSwap (+2562%) and Connext (+1339%) ranked 2nd and 3rd, respectively. The sudden surge in TVL for SubseaProtocol on April 8th may be attributed to abnormal data, as no significant developments were observed publicly. Further monitoring and tracking are warranted.

Subsea is a risk management marketplace for digital assets that has pioneered a fully automated, transparent, and fair immutable detection mechanism to protect users from digital asset risks, hacking attacks, and exploits.

HiveSwap is a SWAP in the BTC ecosystem that provides liquidity services for assets in the Bitcoin ecosystem using the interoperable Bitcoin layer MAP protocol, including assets on BTC L1, the MAP protocol interoperability layer, and various assets on Bitcoin L2.

Connext is a trust-minimized cross-chain communication protocol that enables blockchain composability. Developers can use Connext to build cross-chain applications. Connext is a leading protocol for fast, fully non-custodial transmission and contract calls between EVM-compatible chains. Anyone can use Connext to send value transactions or call data across chains and aggregate.

Based on DeFi categories, among the top 10 raceways ranked by TVL this month, LSD remains the leader with $45.329 billion, a significant decrease from last month's $51.44 billion. Considering the overall market downturn, this indicates a shrinkage in gold-standard scale, but the total amount is still growing.

In addition, Restaking and RWA are the only raceways experiencing positive growth, especially Restaking with an increase of approximately $3.5 billion. This suggests that the market is entering a period of calm, where aside from Restaking, there is no clearer investment direction, indicating further recognition of Restaking. However, Restaking is still a new product, and the unknown risks remain significant, with more users showing a cautious approach.

According to chain categories, in April, the BTC ecosystem's TVL showed the most impressive growth, with Merlin's TVL increasing by 1012%, followed by Bitcoin with a TVL increase of 45.33%, and Base with 21.15% growth (down from 116% last month). The remaining public chains showed negative growth (Solana's growth also failed to be sustained).

Under the current market conditions, the high growth of Merlin and the continuous growth of Bitcoin are mainly due to the attention and investment in the BTC ecosystem, especially L2, after BTC's fourth halving. With more projects landing, the BTC ecosystem is becoming more active. If market conditions and heat do not significantly improve in May, the performance of the BTC ecosystem is expected to continue to outperform other public chains, while the growth momentum of Base will further weaken.

2.4 Mining Pool Data

BTC：

The total network POW hash rate has reached 617.86 EH/s, an increase of approximately 3.52% compared to last month (596.81 EH/s), with a slight decrease in growth rate compared to last month (3.78%). With the fourth halving of BTC, miner income per TH/s of hash rate decreased by about 50% after 10 days, consistent with the post-halving output.

The significant decrease in miner income has led to a corresponding shrinkage in daily BTC inflows into the market. The decline in BTC prices may drive more BTC from miners into the market. Once BTC reaches the shutdown price for some small and medium-sized miners (unable to bear the cost pressure), there may be a batch exit, triggering a chain reaction in the market and even a new round of reshuffling.

Among them, the top three mining pools are still Foundry USA, AntPool, and ViaBTC, while F2Pool dropped to the fourth position, with approximately 140 EH/s less than ViaBTC. In terms of growth, Foundry USA continues to exhibit the most stable performance.ETH：

The supply trend of ETH remains steady, with no significant fluctuations since June 2022, maintaining around 122 million. This indicates that the POS mechanism has played a very positive role in stabilizing the ETH ecosystem, and the market value of ETH is strongly correlated with its ecosystem value.

We see that ETH, as the largest ecosystem in the industry, is focusing on the construction and expansion of its internal ecosystem, and driving continuous exploration in the underlying infrastructure and services for the entire industry. This steady progress allows its potential to accumulate continuously, waiting for new opportunities to emerge.

At the same time, the total staked ETH in POS continues to rise. As of April 30th, there are 1,000,766 active validators and a total of 32,024,157 ETH staked, accounting for 26.28% of the total supply of ETH. In April, an additional 692,898 ETH was staked, and the share of staking in the liquidity staking protocol Lido accounted for 29.15% of the total, down from 30.11% last month.

On April 27th, Lido announced on Twitter that the SSV Simple DVT testnet has ended and the mainnet is about to be launched. In the coming weeks, selected participants will use SSV technology to join the mainnet Lido Simple DVT module. Although this will not make Lido's absolute share more decentralized, it will further enhance the security of stakers and attract more service providers to participate.

3、Market Trends

3.1 BTC Price Oscillates Downward

Following a 16.6% increase in March, the BTC price began to pull back in April, showing a trend of oscillating downward. According to Binance data, as of April 30th at 11:00 (UTC+8), the highest price of BTC in April was $72,797.99, and the lowest was $59,600.01, with a 10.51% decline on the 30th.

Regarding the oscillating downward trend of BTC this month, the mainstream view in the market suggests three possible reasons:

Regarding BTC prices: Since September 1, 2023, Bitcoin has seen a seven-month bullish streak. In February 2024, the increase was approximately 43.57%, and in March, it was around 16.6%. In April, the most significant event was the fourth halving of Bitcoin. Based on historical experience of retracement before and after halving, the overall 10.51% decline in BTC this month is within expectations.

3.2 Major Declines Across Sectors

Alongside the oscillating downward trend in BTC prices, there has been a general decline across other sectors in the crypto industry. According to sosovalue tracking data, Layer2, DeFi, NFT, and Gamefi sectors have experienced the largest declines in ROI.In addition to the above four sectors, MemeCoin and AI sectors, which have been hot recently, have also seen significant pullbacks:

Considering the previous bullish market of crypto assets coupled with profit-taking by many floating chips due to BTC halving, the current oscillating downward trend and the general decline across other sectors are likely part of a normal market adjustment.

4、Investment and Financing Observations

4.1 Overview of Investment and Financing

In April 2024, the total amount of financing in the crypto market amounted to $1.004 billion, a decrease of 7.55% compared to the previous month. Public data is as follows:

Seed round financing events still dominated, followed by strategic financing and other types of financing, with pre-seed round financing events experiencing rapid growth:

Although acquisition events have increased, financing events, average financing amounts, and median financing amounts have all significantly decreased, indicating a short-term negative sentiment in the market and a slowdown in the influx of hot money. This suggests that the market trends in April had a pronounced impact on investment and financing activities, prompting investment institutions to become cautious and slow down their pace. However, acquisitions and mergers are emerging as a trend in competitive racing. In the future, the competitive landscape at the forefront of the race will become clearer.

The five largest financing rounds in April were as follows:

4.2 Analysis of Investment and Financing Institutions

From the perspective of VC institutions: Animoca Brands has been most active in the GameFi sector, followed by OKX, Big Brain, and Polychain, which have made numerous investments in infrastructure and the GameFi sector. Other VC companies have focused their investments on infrastructure and DeFi sectors.

This reflects the current distribution and pattern of industry construction and applications. Infrastructure remains the focus of current development, while the proportion of GameFi applications on the application side is increasing. GameFi is becoming the new focus after DeFi, and investors are advised to closely monitor this trend.

4.3 Assessment of Investment and Financing Trends

With the reduction in block rewards after the Bitcoin halving, miners' income and hash rate face greater downward pressure. Coupled with the market's anticipation of only one interest rate cut by the Federal Reserve this year, funds from VC institutions and TradFi may become more cautious. It is expected that investment institutions in May will be more cautious in their deployment.

However, when the market is fearful, it is often the best time to be "greedy" and move forward. This presents the best investment opportunities for finding undervalued assets. With the continuous innovation and development of the Bitcoin ecosystem, the long-term narrative of AI, GameFi blockchain games, and parallel EVMs, it is expected that the investment and financing market in May will continue to steadily advance, focusing on infrastructure and GameFi. Combining current on-chain data, the BTC ecosystem is expected to perform better.

About Movement
At the end of April, modular blockchain Movement announced the completion of a $38 million Series A financing round, making it the fourth largest financing project in April. The funding was led by Polychain Capital, with participation from Hack VC, Foresight Ventures, Placeholder, Archetype, Maven 11, Robot Ventures, Figment Capital, Nomad Capital, Bankless Ventures, OKX Ventures, dao5, and Aptos Labs, among others. This capital will support Movement in integrating Facebook's Move virtual machine into Ethereum to address smart contract vulnerabilities and increase transaction throughput.

Movement, as a modular framework, can be used to build and deploy Move-based infrastructure, applications, and blockchains in any distributed environment. The framework is compatible with Solidity, bridges EVM and Move liquidity, and allows builders to customize modular and interoperable application chains with different user bases and liquidity out-of-the-box.

5、 Conclusion

The data and market dynamics in April 2024 have revealed several important trends:、

Furthermore, the modular and GameFi sectors are showing strong momentum in investment and financing and progress in landing applications. Particularly, the dominance of GameFi in investment and financing projects, along with the upcoming mainnet launch of Avail, may become key variables influencing the industry and market trends, and we should continue to closely monitor these developments.

Note: All of the above opinions are not investment advice. If there are any inappropriate points, please feel free to leave a message to correct them.

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