What We See in the Markets: Old Guard Resurgence

Keep up with the latest in crypto research as we share the insights from leading institutional research players.

In this edition, we share what Cumberland sees in the markets with early-era cryptocurrencies' strong market performance since Trump's election, outpacing both Bitcoin and newer crypto assets.

Good Morning and Happy Monday from Cumberland APAC! It’s now been about a month since Trump was elected, and the crypto world simply looks like a different place. BTC has now spent two weeks between $90k without breaking through $100k, keeping the anticipation high without giving the market what it was looking for. Outside of BTC, the market has been a fairly chaotic place; green shoots have been emerging on an almost daily basis, with a steady rotation not just of which coins enjoy the rallies, but also of which narratives. In the past month, we’ve seen Memecoin cycles, we’ve seen Bluechip DeFi cycles, we’ve seen alt L1 cycles. Most of these have been in significant size, and most of them have held onto their gains without becoming a real narrative shift.

The most significant narrative since the Trump election, however, is the outperformance of older coins. DOGE was the first to move, +190% since the election; this was almost certainly more a Musk-related move, and the rally it triggered was more in the Memecoin sector than the Earlycoin sector. +190% in DOGE is no joke; it represents a market cap gain of $42b, a number which is greater than any coin outside the top 10. Since then, the market rally has been primarily concentrated in projects that were started in 2018 and earlier. XRP is the most notable of the group, up 380% since the election. This represents roughly a $100b increase in market cap. XRP now has a larger market cap than Solana, and is one-third the size of Ethereum. Crypto is somewhat used to seeing triple-digit rallies, but we’re more used to it in much smaller caps. Since the election, XLM, HBAR, ALGO, ADA, XTZ, and EOS are up 500%, 500%, 370%, 240%, 170% and 170% respectively; this is compared to BTC, up 38% over the same period. The amount of capital that these Earlycoin rallies represents is fairly staggering. In general, there’s a pretty direct correlation between market cap and liquidity, and that means that it generally takes a lot of flow to move the larger coins. That doesn’t always hold true in these groups; some of them have large market caps but not that much liquidity, which leads to these types of outsized moves when retail comes to play. It has second-order impacts as well; these moves actually seem to be taking oxygen out of other coins and sectors. Over the past week, when XRP rallied 70%, SOL is down 1%.

Happy Trading!

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