Role of Bitcoin ETFs, disappointment by Ethereum (ETH), collapse of Solana (SOL), meme coins as viable asset class and overvalued L2s: crypto veteran Alex Krüger sums up the developments of the last few months.
Ethereum (ETH) disappointments, Bitcoin ETF “entirely” drives cycle
While Bitcoin ETF approval appeared as the only catalyst entirely driving the upsurge of crypto capitalization, Ethereum’s (ETH) performance looks disappointing so far. ETH stakers and airdrop farmers, however, managed to benefit from the second largest blockchain, Krüger said in his recent X thread.
Some thoughts on the current crypto cycle
#1 The crypto cycle has been almost entirely driven by the bitcoin ETF.
#2 ETH has been a major disappointment, but it has performed well overall for stakers and airdrop farmers.
#3 Solana established itself as the chain of choice for…
— Alex Krüger (@krugermacro) May 1, 2024
He also admitted that Solana (SOL), at first, established itself as the chain of choice for retail traders and overtook Ethereum (ETH) for these market actors. At the same time, it failed to handle the increased traffic and collapsed.
Coinbase’s L2 Base (BASE) then replaced Solana (SOL) as a retail-focused blockchain.
Meme coins, despite dominating the narrative in early 2024, mostly, went to zero. At the same time, some of them are still outperforming the market. As a result, they reintroduced themselves as a viable asset class.
Also, Krüger mentioned a very low inflow of retail traders in this cycle that can partly be attributed to “PTSD” after the brutal BTC collapse in 2022. That is why many crypto enthusiasts missed the Bitcoin ETF launch, according to the expert.
Cycle not over, expert says
Unfortunately, the market is overwhelmed with “scammy” meme coin launches and the greed of founders offering new altcoins as a form of “quick money”:
The market started to get flooded with both scammy memecoin launches and cash-grabbing founders around February. These founders focus on making a quick buck and generating short-term hype rather than on longevity.
Last but not least, the expert says that there are too many L2s, while the majority of them remain overvalued by the market.
Nevertheless, he concluded that the cycle is far from ending.
