What's Driving Token Prices? January 22, 2025

Katie Talati
Jan 22, 2025

Join Katie Talati, Arca’s Head of Research, weekly on Wednesday at 4PM EST / 1PM PST as she shares notable token activity over the past week and her insights on what market events drove these token price movements.

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  • POL (-7.2%) - Last week, Layer-2 protocol Polygon announced it has partnered with Reliance Jio, one of the largest Indian conglomerates. As part of the partnership, Jio will use Polygon as part of the rollout of its Web3 capabilities, specifically they are aiming to add Web3 functionality to existing apps. Jio has over 450M customers and serves India’s growing market. Polygon has struggled recently to keep pace with the market and the growing number of L2 projects. Its TVL has been basically flat over the past year.
  • TRX (+8.6%) - Last week, Layer-1 protocol Tron announced it would relaunch its USDD stablecoin with a 20% APY. Justin Sun, Tron’s founder, claims that the yield is from Tron itself as it has an excess of cash. USDD was originally launched in 2022 to compete with Terra’s stablecoin UST which at the time offered 20% yields (USDD offered 30%). However, this yield was not maintained as the market began to contract in Q2 of 2022. Tron is also in the spotlight this week after World Liberty Financial (the Trump crypto project) purchased TRX tokens for its own balance sheet. 
  • MORPHO (+9.2%) - Last week, Coinbase announced the launch of Bitcoin-backed loans on the Base Layer-2 network. These Bitcoin backed loans are actually backed by cbBTC, Coinbase’s wrapped version of Bitcoin (since tokens like Bitcoin can’t be natively transferred cross chain, they are given wrappers to represent their value on other chains). DeFi protocol Morpho is the backend facilitator of these loans on the Base blockchain, an unusual choice given Base already has its own native lend/borrow protocol Moonwell and the largest lending protocol Aave is live on Base. Although TVL has seen a decent bump of 28% as a result of this new product offering, the real success was how the MORPHO token moved up 60% on the announcement and is up 9.2% for the week.
  • TRUMP (+507%) - The big news of the past few days is the newly launched TRUMP memecoin. The TRUMP token was released late Friday night (during the Crypto Ball) with many at first unsure if it was actually backed by Trump. Once confirmed, the token was quick to rise and reach a massive $39B valuation. The token is at its core a memecoin, which means it has no value. 20% of the token is freely trading for the public, the other 80% is owned by the Trump family and is locked up for the next 3 years. The token was notably launched on the Solana blockchain and the SOL token rose 20% over the weekend as a direct result of this. The new memecoin has brought in 400,000 new users to crypto based on some estimates from platforms like MoonPay which allows users to buy crypto with a credit card.
    DISCLAIMER: This commentary is not intended to be investment advice, investment research, or a recommendation. Please consult your investment professional for your own circumstances."

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Disclaimer: This commentary is provided as general information only and is in no way intended as investment advice, investment research, legal advice, tax advice, a research report, or a recommendation. Any decision to invest or take any other action with respect to any investments discussed in this commentary may involve risks not discussed, and therefore, such decisions should not be based solely on the information contained in this document. Please consult your own financial/legal/tax professional.

Statements in this communication may include forward-looking information and/or may be based on various assumptions. The forward-looking statements and other views or opinions expressed are those of the author, and are made as of the date of this publication. Actual future results or occurrences may differ significantly from those anticipated and there is no guarantee that any particular outcome will come to pass. The statements made herein are subject to change at any time. Arca disclaims any obligation to update or revise any statements or views expressed herein. Past performance is not a guarantee of future results and there can be no assurance that any future results will be realized. Some or all of the information provided herein may be or be based on statements of opinion. In addition, certain information provided herein may be based on third-party sources, which is believed to be accurate, but has not been independently verified. Arca and/or certain of its affiliates and/or clients may now, or in the future, hold a financial interest in investments that are the same as or substantially similar to the investments discussed in this commentary. No claims are made as to the profitability of such financial interests, now, in the past or in the future and Arca and/or its clients may sell such financial interests at any time. The information provided herein is not intended to be, nor should it be construed as an offer to sell or a solicitation of any offer to buy any securities, or a solicitation to provide investment advisory services.

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