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🛣️ Road to discovery

No more questioning it: Bitcoin has never been worth this much against the US dollar.

Bitcoin set a bunch of new price records overnight, with the latest — $89,864 — during the super-early hours of Tuesday morning.

That’s 15% above bitcoin’s inflation-adjusted record high from November 2021 ($77,975). Bitcoin has since pulled back to under $87,600 but remains 27% up over the past week.

Bitcoin is now tracking the previous bull market cycle, which spanned from 2018, through the pandemic, to early 2022.

The above chart plots bitcoin’s price performance across major bull cycles as if they all started at once. Our current cycle, which began when BTC bottomed out in November 2022, is in purple.

As of earlier this morning, bitcoin was up 580% since then. At this point in the 2021 bull market, bitcoin had gained 570%, and in the one prior between 2015 and 2018, over 2,000%.

All super impressive, considering bitcoin bull market returns were diminishing every cycle. Until this one, apparently, although it’s early days.

More good news: Tuesday saw another new record for bitcoin beyond its US dollar exchange rate. 

BTC’s market cap jumped as much as $181.55 billion throughout the day — the biggest dollar-denominated intraday spike on record. 

Previous records were $149.32 billion earlier this year, in August, and $146.04 billion in February 2021.

Of course, the dollar figure record is destined to be broken repeatedly as bitcoin rises. Its market cap has never been higher, over $1.72 trillion, to the point that even a moderate surge in percentage terms would add over a hundred billion dollars.

On the above, the top heatmap shows daily growth in bitcoin’s market cap — redder strips represent more billions added in a single day. Yesterday, at the far right end of the spectrum, was the reddest on record.

The bottom otherwise reflects the percentage gains in bitcoin’s price over the same period. Not so hot, at least compared to the period between 2017 and 2021. But it’s all relative.

Speaking of, there’s one more barrier than bitcoin needs to smash before we can really say that we’re in price discovery mode: Bitcoin’s stock market ratio.

Bitcoin’s price against the S&P 500 and the Nasdaq 100 — the stock market equivalents of the ETH/BTC ratio — is still below records set in late 2021.

Earlier today, the BTC/SPX ratio (pink line) was 14.99 compared to 15.34 in March 2021. The BTC/NDX ratio (purple) was 4.26, still 11% below the 4.7 peak, also in March 2021.

It’s a minor point, but it shows just how hot parts of the stock market were in leadup to the current bitcoin euphoria.

Something tells me that crypto will take it from here.

— David Canellis

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• Crypto’s total market cap briefly topped $3.123 trillion overnight, per CoinGecko, beating its previous high of around $3.07 trillion in November 2021.

• Over $6.3 billion net in stablecoins have been minted so far this month. Total supply: $178.75 billion, under $9 billion short of the all-time record.

• Ether has turned deflationary when zooming into the past day — burning more than 868 ETH ($2.8 million) amid an uptick in DEX and stablecoin volume, per Blockworks Research.

• Total value locked in DeFi: $118.51 billion, the highest since Terra depegged in May 2022.

• After a record $1.36 billion inflows on Friday, bitcoin ETFs now hold over 1 million BTC — equal to 5.14% of the circulating supply.

🕹️ Let the games begin

The Off the Grid hype is still going strong, and anecdotally, I have to say that even my non-crypto husband has been playing it.

Anyway, on Empire today, Jason Yanowitz and Santiago Santos sat down with Gunzilla’s Theodore Agranat.

Some of Agranat’s answers really help explain the popularity of Off the Grid — specifically, that’s it’s not necessarily about crypto.

Instead, “it is about best of breed technologies. In this case, blockchain technologies that will enhance the user experience. It's all about the gamer and it's all about the gamer experience.”

The team also had to innovate in order to incorporate the crypto elements. 

“To build up the marketplace, but we had to build our own blockchain because we didn't find anything out there that really was up to the standards that we had … we ended up going with an Avalanche subnet that we highly customized, that we built on top of,” Agranat explained.

One of the things helping to differentiate Off the Grid is the use of a storyline. In a battle royale game like Fortnite, storylines aren’t always incorporated, but — putting aside the crypto of it all— perhaps that’s also what speaks to players. 

Admittedly, I’m not a PC player and I stick to my consoles, so I haven’t picked up the keyboard to test it out, unlike David. However, I am a sucker for a good storyline and that would be enough to get me into a battle royale game, which isn’t normally my cup of tea. 

Remember the a16z State of Crypto report from last month? I went back in and looked for gaming-related data to see if the data backs up a potential boom or if Off the Grid is alone on its own island, kind of like its in-game characters. 

Hot crypto subcategories — i.e. where everyone’s building this year — remain pretty focused: we have DeFi, blockchain infrastructure and socials at the top of the list. Gaming is a much smaller piece of that pie at 6.3%

To be fair, creating a AAA game takes time, and a decent amount of money. So perhaps we just needed a game like Off the Grid to prove the interest before we saw some pickup. 

— Katherine Ross

• TD Cowen analysts agree that the Trump administration will pass crypto legislation, but it’s not gonna be a priority. 

• Ethereum researcher Justin Drake unveiled Beam Chain, a proposed redesign of Ethereum’s consensus layer. 

• Former Alameda co-CEO Sam Trabucco forfeited his yacht and two apartments in San Francisco as part of a settlement with FTX creditors. 

• Any ‘reputational risk’ for crypto has been removed thanks to the election, according to Bitwise’s Matt Hougan.

• FalconX is seeing more demand for margin as hedge funds look to capitalize on a basis trade for bitcoin.

Q:  How long will bitcoin be the most exciting thing in crypto?

I hate to be that person, but I think it’s going to stay that way for a while — at least from the outside looking in. 

Think about it. The talk of a strategic bitcoin reserve is still floating around, and bitcoin itself is ripping. It’s going to be the It Girl of this cycle. 

But that doesn’t mean it’s going to be the most exciting thing for anyone in crypto.

I think it’s just a catalyst to get non-crypto folks in the door. I think we can agree that while bitcoin’s price action is splashed across the digital front pages of places like Bloomberg, it doesn’t change the way people in crypto interact with crypto. 

Let’s just hope that a rising tide floats all boats. 

— Katherine Ross

Until altcoin season.

But we’re still pretty far from a real altcoin season (on this chart, we could say one potentially starts when the pink line overtakes the blue line).

We might be in for memecoin season much earlier than that. Bitcoin is indeed sucking all the air out of the room right now, but I’m expecting DOGE to blow it right back up before too long.

— David Canellis