What's Driving Token Prices? October 25, 2023

Katie Talati
Oct 25, 2023

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.

Watch Our Founders Video

  • ATOM (+12%) - Zaki Manian, one of the original ATOM 2.0 creators, posted a proposal this week to cut ATOM emissions to a maximum of 10% from ~20%. The proposal is generating a lot of discussion and it is currently unclear what the general consensus will be. A reduction in inflation would be incrementally positive since ATOM inflation is among the highest of all L1s. Research provider Blockworks has also put forward a tokenomics proposal in the last few weeks that seeks to implement a validator and community tax. It also introduces quadratic voting though this move is unlikely to create much demand for ATOM. ATOM has failed to keep up with the broad-based crypto rally the last few days and is up 12%.
  • BTC (+23%) - We would be remiss if we didn’t talk about Bitcoin as it has led the rally this week. The move higher was spurred by a number of smaller events which helped propel BTC forward. Bitcoin has already had positive tailwinds following ETF filings from Blackrock and others. This news coupled with pressure on the SEC to approve an ETF has bolstered the belief that a Bitcoin ETF could be approved very soon. Over the weekend, a move higher in Bitcoin caught dealers in the derivatives markets offsides as those who short, needed to purchase spot BTC to cover their positions resulting in pushing the price of BTC above $30K. On Monday, Blackrock refiled their ETF application and the DTCC added the ticker symbol for the ETF product (IBTC). The market interpreted this as a sign that launch is imminent and BTC saw another 9% gain. The rally in BTC has pulled the whole market up with some tokens rallying over 50% while inflows to BTC-related products jumped over $120M in the last week, equal one third of inflows YTD.
  • DYDX (+26%) - Yesterday, dYdX announced the long awaited v4 launch that starts with the launch of DYDX Chain, an app-chain built using the Cosmos framework. While the chain is live, the front-end for the perpetual exchange is not yet available. The dYdX initially expects a migration period between Starknet, an Ethereum Layer-2 on which DYDX currently runs, to the new Cosmos-based app chain. The launch will also introduce the dYdX Operations SubDAO, which will govern and guide the new chain. Just over a week ago, dYdX Trading announced it would transition their charter from a for profit company to a public benefit charter. The genesis event when the chain begins producing blocks will start tomorrow, followed by a staged release and migration to the chain activated via a governance vote.

DISCLAIMER: This commentary is not intended to be investment advice, investment research, or a recommendation. Please consult your investment professional for your own circumstances."

Subscribe For the Latest Blockchain News & Analysis



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.

You May Also Like

These Stories on Investing Themes