Bitstamp Monthly Briefing – April 2024


Get ready for Bitstamp's April Monthly Briefing, packed with the latest buzz from the crypto world! This month, we're unpacking the Bitcoin Halving to see how it shapes the market, revealing the top-performing assets and important upcoming events. Plus, we've got you covered with a curated list of reads to help you understand this evolving landscape.Buckle up and let's explore!Market updateThe total crypto market cap decreased by 16.8% month-over-month, reaching $2.18 trillion at the end of April. Trading volume on the leading crypto spot exchanges we monitor fell by 38% during this period.BTC's market dominance increased by 1.3 percentage points month-over-month to 54.9%.Total crypto market cap (grey) and BTC dominance (green)Past performance is not a reliable indicator of future results. The performance of crypto assets can be highly volatile. Data taken on May 1, 2024.Source: Total crypto market cap, Bitcoin dominanceTop performing CMC 100 assets in April+ 28.3% Ethena (ENA) - Token launched on April 2, accompanied by a massive airdrop.+ 8.6% Bitget Token (BGB) – Reached new all-time highs of $1.38 mid-month.+ 2.7% Neo (NEO) – Rallied as a proxy bet that Hong Kong ETFs would be approved.Worst performing CMC 100 assets in April- 53.9% Conflux (CFX) - Lost all gains from March and fell below the $0.25 resistance level.- 51.2% ORDI (ORDI) - BRC-20 tokens fell ahead of the Bitcoin Halving event.- 49.0% Aptos (APT) – Returned all gains from March and fell below the $10 resistance level.Past performance is not a reliable indicator of future results. The performance of crypto assets can be highly volatile. Data taken on May 1, 2024.Key macro & crypto events in May 2024May 7-8: Bitcoin DevCon 2024 in Hong KongMay 8: ECB non-monetary policy meetingMay 15: US Core Inflation RateMay 15: Blockchain Summit 2024 in Washington, DCMay 18-27: Blockchain Week Berlin 2024May 20-21: Crypto Expo Dubai 2024May 21-23: London Blockchain ConferenceMay 22: US FOMC MinutesMay 29-31: Consensus by CoinDesk in Austin, TexasBreaking down the Bitcoin HalvingThe genesis of Bitcoin signaled a paradigm shift in the financial landscape, embodying Satoshi Nakamoto's vision of a decentralized digital currency. Nakamoto's seminal whitepaper presented Bitcoin as a solution to longstanding challenges plaguing traditional financial systems, particularly in global payments.Before Bitcoin emerged, the fintech industry had been striving to create payment solutions that were cheap, real-time, and global. Established networks like Visa exemplified this pursuit, boasting extensive global reach and facilitating trillions of dollars in transactions annually. However, these systems relied on centralized structures and analog infrastructure, limiting efficiency, security, and cost-effectiveness.In contrast to these centralized models, Bitcoin introduced a decentralized framework that revolutionized value transfer mechanisms. The Bitcoin whitepaper proposed a peer-to-peer network that bypassed traditional intermediaries, enabling users to transact directly with one another. This decentralized approach reduced transaction costs and enhanced security and transparency, making global payments truly accessible and efficient.At the heart of Bitcoin's operation are miners, who are tasked with validating transactions and maintaining the integrity of the network. Through the process of cryptographic puzzle-solving, miners secure transactions, add blocks to the blockchain, and ensure the smooth functioning of the Bitcoin ecosystem. To incentivize their participation in the network, miners are rewarded with block rewards, which is how new bitcoins enter circulation.Central to Bitcoin's economic model is the concept of halving, a recurring event designed to cut the block reward in half every 210,000 blocks (or approximately every four years, based on an average block time of 10 minutes). This process, programmed into the Bitcoin source code, gradually reduces the rate at which new bitcoins are introduced into circulation. The last Bitcoin halving happened on April 19, 2024, when the block reward was halved to 3.125 bitcoins.Halving events effectively cap the bitcoin supply at 21 million bitcoins, with the issuance rate slowing over time. This deflationary mechanism controls inflation, maintains scarcity, and bolsters Bitcoin's value proposition as a store of wealth. As Bitcoin continues to evolve and mature, its role within the broader financial ecosystem becomes increasingly pronounced. Institutional interest in digital assets is rising, while regulatory frameworks strive to provide clarity and legitimacy to the cryptocurrency sector. While short-term price volatility may persist, the long-term trajectory of Bitcoin remains optimistic, buoyed by its inherent properties and growing adoption worldwide.Recommended readsAre we early or late by The Wolf DenThe blog discusses the current stage of the market cycle, particularly concerning Bitcoin and Ethereum, and its potential implications for investors. It highlights various factors and charts, draws on insights from Coinbase Institutional, and emphasizes the importance of the halving event for Bitcoin to support the argument that the market is currently in the middle stage of the cycle—neither early nor late. The conclusion encourages investors to remain patient and optimistic about the potential for significant price increases in Bitcoin, Ethereum, and quality altcoins.Exploring the Evolution and Growth of DeSoc Apps by Galaxy ResearchDeSoc, short for decentralized social networks, is a rising trend in the crypto world that leverages blockchain technology to revolutionize digital information sharing. These platforms, like others in the crypto realm, prioritize principles like data ownership, transparency, and resistance to censorship. The concept of blockchain-based social media emerged in 2016 with Steemit, the first decentralized social network app built on the Steem blockchain. However, many have followed since.DePIN Deep Dive by Mythos ResearchA deep dive into Decentralized Physical Infrastructure Networks (DePINs), which are leveraging blockchain and crypto incentives to revolutionize traditional infrastructure development and management. DePINs incentivize individual participation through token rewards, aiming to decentralize control away from large corporations and governments. These networks encompass various sectors such as decentralized storage, computing power-sharing, wireless infrastructure, and sensor network integration. Leveraging blockchain as the foundation, DePINs integrate seamlessly with decentralized finance (DeFi) principles, fostering a self-sustaining ecosystem. They offer numerous advantages, such as enhanced resilience, increased security, and user-driven development. Future trends suggest integration with artificial intelligence (AI) and the potential for an "on-chain economy." Overall, DePINs represent a transformative paradigm shift in infrastructure development, promising a more resilient, scalable, and inclusive approach than traditional centralized models.The ins and outs of trend following by Validea blogTrend following is a popular investment strategy focused on buying assets in upward trends and selling or shorting those in downward trends, leveraging the market's momentum. It works by capturing gains during bull markets and minimizing losses in bear markets, often outperforming buy-and-hold strategies on a risk-adjusted basis. Commonly, trend followers use metrics like moving averages and various lookback periods to identify trends and generate trading signals. Despite its potential benefits, trend following poses behavioral challenges, as it requires investors to deviate from popular benchmarks and tolerate frequent incorrect signals.No information in this blog is intended to provide any personal investment services or advice nor is it an investment recommendation. Clients are responsible for making their own investment decisions. Bitstamp accepts no responsibility for any damage and/or loss arising from the use of information provided herein. Past performance is not necessarily an indicator of future results. Please consider your individual position and financial goals before making an independent investment decision.Bitstamp is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. Licensed as a Money Transmitter by the New York State Department of Financial Services.Not offered in the following states: Hawaii and Nevada.Bitstamp UK Limited is registered with the UK's Financial Conduct Authority. Please read the Risk Warning Statement before investing. Cryptoassets and cryptoasset services are not regulated by the Financial Conduct Authority. You are unlikely to be protected if something goes wrong. Your investment may go down as well as up. You may be liable to pay Capital Gains Tax on any profits you earn.