All-Time Highs, COIN50’s Debut & Layer 1/2 Onchain Trends
Market Commentary
The bullish momentum from last week persisted as bitcoin reached new all-time highs. On Monday, prices surged from $82,000 to $90,000, peaking at $93,500 on Wednesday. In a milestone moment, bitcoin surpassed Silver’s market capitalization, becoming the world’s eighth-largest asset.
Funding rates spiked significantly on Tuesday, reflecting a return of aggressive leverage, with many altcoin longs paying over 50 percent APY in funding. Retail interest was heavily concentrated on memecoins, driven by Robinhood and Coinbase announcing listings for PEPE and WIF.
Dogecoin also saw a significant rally, adding nearly $20 billion to its market cap and rising over 50 percent as Donald Trump officially announced the Department of Government Efficiency (DOGE), led by Elon Musk and Vivek Ramaswamy.
On the political front, Republicans have secured a majority in both the Senate and House of Representatives, granting Trump broad authority to advance his legislative priorities. This development is poised to benefit the crypto industry by enabling pro-crypto policies and providing much-needed regulatory clarity to further legitimize the asset class.
However, there are early indicators of market overheating. Speculative fervor is evident, with crypto Twitter broadly predicting new all-time highs for memecoins and pushing the narrative to "stay long until inauguration day." While we maintain a long-term bullish outlook heading into a Trump administration—anticipating policies that will favor domestic corporates and boost U.S. equities—we expect near-term profit-taking as enthusiasm around the “Trump trade” stabilizes.
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Layer 1 & Layer 2 Insights
This week demonstrated significant growth in onchain activity across most major ecosystems.
Total Value Locked (TVL) increased by an average of 10%, with the notable exceptions of Polygon and TON, which experienced declines of 7 percent and 25 percent, respectively.
Despite the drop in TVL, TON performed strongly in other areas, with a weekly average increase of 140,000 daily active addresses and a doubling of trading volume. In contrast, Polygon experienced a 20 percent decline in trading volume and an 18 percent reduction in stablecoin activity.
Decentralized exchange (DEX) volume surged across the board, with an average increase of 85 percent. For Tron, this translated to an additional $250 million in trading volume, while Solana recorded a remarkable $16 billion increase.
However, Solana struggled to attract new users, as the number of active wallets declined, suggesting existing participants traded with greater capital.
Ethereum followed a different trajectory, adding 40,000 active wallets over the week and generating $65.8 million in weekly fees, including a daily record of $18.2 million.
Aptos is steadily capturing more active wallets, while Sui is seeing a decline in active users but continues to grow in trading volume and TVL.
Coinbase Launches COIN50 Index
Coinbase has unveiled the Coinbase 50 Index (COIN50), a benchmark tracking the performance of the top 50 cryptocurrencies by market capitalization. Developed with Market Vector Indexes, a regulated index administrator, COIN50 aims to provide a comprehensive view of the crypto market, akin to the S&P 500 in traditional equities. As institutional interest grows, Coinbase positions COIN50 as a standard for diversified exposure across digital assets and sectors.
The index weights assets by circulating market cap, capping Bitcoin at 50% to prevent overconcentration. It currently includes Bitcoin, Ethereum, Solana, XRP, Dogecoin, and other prominent assets, offering representation across decentralized finance (DeFi), infrastructure, and media. Stablecoins and privacy coins are excluded, and all assets undergo strict eligibility screening for token economics, infrastructure, and security. COIN50 is rebalanced quarterly to adapt to market shifts and remain relevant in a rapidly evolving space.
Available on Coinbase’s website and app, COIN50 will also be offered as a tradable derivative for eligible non-U.S. investors via perpetual futures contracts on Coinbase’s advanced trading platform. This dual functionality provides both a market benchmark and a tradable product.
Through COIN50, Coinbase seeks to establish a reliable standard for tracking the crypto market's performance, helping investors navigate its growth and diversity beyond Bitcoin and Ethereum.