Empire Newsletter: Telegram’s blockchain is surfing narratives

Today, enjoy Empire on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. Subscribe to the Empire newsletter .

You pump or you dump

If Westeros were a Game of Thrones, crypto is a Game of Narratives.

Bitcoin and Solana have dominated mindshare during this bull market. But a bevy of other cryptocurrencies have still captured the moment.

Spot ETFs started sucking air out of the room from late last year, boosting bitcoin. Then, a Solana-naissance took over after major rallies in native dog coins BONK and WIF, leading to one of this cycle’s memecoin manias.

All that’s reflected in SOL’s bitcoin ratio, the cost of 1 SOL denominated in bitcoin. SOL had effectively tracked bitcoin’s price action since crypto markets bottomed out in late 2022 — until BONK started its monumental rally about one year later. 

SOL would more than triple its bitcoin ratio over the next six months as its DEX volumes set new records.

But Solana was never the best-performing cryptocurrency tied to a layer-1 during this bull market. AI-centric platforms Fetch, Akash and Bittensor, as well as gaming blockchain Ronin, have pushed their ratios much higher. 

Although all are correcting alongside bitcoin and could eventually slip into negative territory if alts continue to be crushed with a deeper retracement.

TON’s bitcoin ratio (in dark purple) is rising while the other layer-1 standouts are falling

TON, however, is bucking the trend. Its bitcoin ratio was negative for the bull market to date until April, leading into the release of Notcoin in May, a native memecoin tied to the popular tap-to-earn game.

But on the flip side, the bottom end of the top 100 or so cryptocurrencies is littered with alternate layer-1s and layer-0s.

Algorand, flow, chiliz, cosmos, polygon, multiversx, tezos, eos and core have all lost more than 80% of their value against bitcoin in this bull market. 

Polkadot, stellar, sui, cronos and cardano are otherwise down over 70%.

In most cases this cycle, holding bitcoin would’ve worked out much better

As for TON, it’s speedrunning the types of adoption arcs seen in Ethereum and Binance Smart Chain in previous cycles — it has hundreds of buzzy memecoin projects, yield-bearing black boxes and quasi-community coins based around DAOs and Telegram groups.

But crypto moves fast and narratives quickly fall out of fashion. Memecoins and AI projects have seriously dominated this bull market: BONK’s bitcoin ratio is up 3,700% and PEPE’s almost 1,700%. 

There are also tokens tied to defi apps Pendle and Ondo, whose bitcoin ratios are up 3,500% and 230% a piece. Pendle managed to capture the points-farming airdrop meta and Ondo has caught the real-world assets wave with tokenized treasuries. 

It could be that the litany of low-returning layer-1s have largely failed to scoop up any of that hype, leading to punishment by the market. 

— David Canellis

Data Center

• In this bull market so far, median bitcoin ratio performance for current top-100 tokens is -48%.
• ¾ of those cryptocurrencies have lost value against bitcoin.
• TON users paid $3 million to use the network last month, the second-highest ever after April’s $4.2 million.
• Crypto is a sea of red today. FTM, CORE and ENA are the worst hit, losing over 15%, while recently-airdropped ZK is down 18%.
• LDO and TON are still green for the week, up 7% and 5%, respectively.

No pain, no gain

Strap in. It’s beginning to look like we may be in for a cruel summer. 

Taylor Swift references aside, bitcoin’s down over 5% in the last two weeks and seems unable to hold a level close to $70,000 after briefly surpassing it earlier this month. 

We’ve chatted about the price action a few times, but this morning I want to take a look ahead and see if we can get some more info on the potential pains and gains the market should expect this summer. 

One of the big things to be aware of, Galaxy’s Alex Thorn told me, is the fact that there really isn’t a major catalyst until the fall. 

Specifically, he’s paying attention to the election because — I don’t know if you’ve picked up on this after the thousands of think pieces, op-eds, and other recent reporting — but crypto has become an election issue. It’s early days yet, but it’s definitely set to play a role in the November presidential election. 

This isn’t to say that bitcoin can’t retake $70,000, or even carve out new highs by the end of the year. Only that like everyone else, it might need a breather during the summer break. 

Thorn added that outside of summer, which is a “sleepy time” for investors, the macro conditions remain tight.

“The BTC price action continues to show that weak longs are looking to take profit near the recent highs as the bulls are frustrated with Bitcoin’s inability to break into new territory,” John Glover, chief investment officer at Ledn, tells me.

“Since the March 14 high at ~$74,000, the market has tested $72-73,000 on 10 separate days and failed to break through. I expect that we will see some more selling should we trade below $64,000, which may see the price push to as low as $56-58,000,” he continued.

“This would be healthy in my view as it would reduce the longs and see the market deleverage, which would open us up for a more rapid appreciation later in the summer.”

Glover still believes bitcoin will sit between $85,000 and $95,000 by the fourth quarter of this year. The election uncertainty adds to his price target because he thinks that investors will move away from the equity markets and into bitcoin and gold as safe havens. 

Thorn’s slightly more bullish in his price target expectations, telling us that he thinks bitcoin will “make new all-time highs before the end of the year” that could exceed $100,000.

“BTC’s inability to break $73,000 despite weeks of positive news and easing gridlock in Washington D.C. suggests more chop ahead,” he said. “The next several months are likely to be characterized by choppiness, though we think $60,000 is a strong support level.”

If bitcoin’s in for a rough patch, it’s pretty likely — based on what we’re currently seeing play out with ether and other tokens — that the rest of the market’s going to bleed alongside it.

So…if you’ve been thinking about taking a vacation this summer, now might be a good time to head out for a bit. At the very least, go touch some grass.

— Katherine Ross

The Works

• A new Kaiko report says that the “dwindling volatility” in bitcoin is a maturity signal.
• Cumberland received a BitLicense from the New York State Department of Financial services. 
• The Supreme Court is reviewing a case involving Nvidia’s revenue related to GPUs used to mine crypto.
• FTX’s bankruptcy process has left some former customers feeling “aggrieved and robbed.”
• David Hirsch, the SEC’s crypto enforcer, announced his departure from the regulator after nine years. 

The Morning Riff

Q: Was Pump.fun’s guerilla marketing worth it?

If Pump.fun wasn’t on the SEC’s radar before yesterday, it sure as heck is now after it said it hired the SEC’s former crypto enforcer. 

David Hirsch, who initially announced his departure on LinkedIn, even had to deny the rumors. Yikes.

Crypto is crypto, and this kind of stuff is mildly entertaining for sure, but I also feel the need to point out that the problem with fake news is that some folks believe it. 

So in the end, Pump.fun got a brief viral moment, but the SEC just may get the last laugh.

— Katherine Ross

The real trick in crypto isn’t capturing attention. It’s maintaining it.

Pump.fun has so far done the first part. 

One million memecoins have now been issued via Pump.fun, and almost half of all Solana tokens launched right now are done through the platform. But all that’s starting to level out. Revenue is still high, about where it was this time last month, but it isn’t exactly growing quickly. 

Staying relevant means sometimes trying weird stuff on social media. NEAR did it with the thirsty ‘Jensen Huang touched our CEO on the elbow’ tweet , and Pump.fun trolled an outgoing SEC cop. 

A risky tweet? Maybe. But it tracks. Pump.fun should keep going.

— David Canellis

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter .

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter .

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.