February 2024 Market Recap

Welcome to our February 2024 monthly crypto market recap!

The crypto market surged and reached a staggering market capitalization of $2.3 trillion, with BTC leading the rally by hitting a yearly high of $64K and maintaining investor enthusiasm in the digital asset space. Additionally, ETH reached a yearly high of $3.3K, sparking excitement in the DeFi sector. The ten BTC ETFs saw $7.69 billion in trading volume on Feb. 28, suggesting that this rally was driven by institutional procurement of BTC.

In the US, a strong PPI report drove the 10-year Treasury yield to 4.28% and saw the S&P 500 and Nasdaq escalate to all-time highs. Fed officials have brushed off the high inflation numbers, as seasonality could be at play for the January prints. In January, US inflation increased as anticipated, with PCE inflation rising by 2.4%, marking the smallest annual rise in nearly three years. This suggests a potential Federal Reserve interest rate cut in June. In the meanwhile, Joe Biden has expressed optimism that a ceasefire between Israel and Hamas could begin by next Monday, amid efforts to rejuvenate stalled peace negotiations. The anticipated ceasefire and potential prisoner exchange are seen as steps towards longer-term solutions for the region, including the establishment of an independent Palestinian state and normalization of Israel-Saudi relations.

In crypto news, the Ripple and SEC legal battle reached a critical juncture with a discovery deadline on February 20th. This phase of the lawsuit could reveal evidence pivotal for the court's final decision on remedies for Ripple on March 13, potentially impacting the regulatory treatment of digital assets. The lawsuit's outcome could set a precedent for the cryptocurrency industry, influencing future regulatory approaches and market innovations. 

Join us as we untangle the threads of these market dynamics and delve into the stories that shaped the top-performing tokens in February. Additionally, stay informed with our comprehensive monthly market recaps at Treehouse Insights and our daily market analysis with Treehouse Daily. Stay informed to navigate the twists and turns of the crypto landscape!

Worldcoin (WLD) ⏶210.26%

Worldcoin is a project spearheaded by OpenAI's chief and cofounder Sam Altman aimed at creating a global identity system using biometric data, specifically iris scans, to provide a unique digital identity known as World ID for every individual. This ID aims to support a new global digital economy by facilitating access to cryptocurrencies and other digital assets. The initiative employs a device called the Orb to capture individuals' iris scans, converting them into a secure, unique identifier stored on a blockchain. Worldcoin's native cryptocurrency, the WLD token, is designed to facilitate global transactions, acting as a medium for payments, purchases, and transfers within the Worldcoin ecosystem. 

This month, Worldcoin's value experienced a significant increase which is largely attributed to the launch of Sora, OpenAI’s text-to-video generator. While they are separate entities, retail investors seem to be purchasing WLD to gain exposure to OpenAI’s growth. Consequently, WLD, which is tied to OpenAI, is a large benefactor to the attribution between the two projects. 

Additionally, the recent surge in WILD's price can also be attributed to Sam Altman's announcement of seeking an additional $50 million in funding for the Worldcoin project. This initiative, under the banner of Tools For Humanity, aims to establish a global digital identity and financial network, evidenced by over 2.6 million individuals already engaging with Worldcoin's "orb" devices to receive a unique digital ID and complimentary cryptocurrency. Altman's emphasis on the importance of identifying unique humans in an AI-integrated world has bolstered the project's innovative appeal and attracted significant investment from renowned entities like Blockchain Capital, a16z Crypto, and Bain Capital Crypto.

Pepe (PEPE) ⏶188.84%

Pepe is a memecoin project inspired by Pepe the Frog, it was launched to overcome the endless derivative dog coins. The recent significant price increase is largely attributed to the growing interest in memecoins, a rewarding staking system, and a unique burning mechanism.

The first surge occurred on 23 February after Binance posted a promotion to earn PEPE rewards on their Twitter account. This signaled market interest in PEPE tokens and credibility from a major institution. The recent rally also coincided with BTC’s climb to $57K, leveraging market momentum to drive the memecoin theme. 

Furthermore, Pepe’s OI-Weighted Funding Rate saw a significant increase, moving from 0.0169% to 0.12%. This indicates a bullish sentiment among traders and a growing willingness to pay more for holding long positions, with expectations of higher future prices. This is further catalyzed by Elon Musk, a known avid fan of memes, tweeting about his return to memes, which saw PEPE jumping by another 51%.

Arweave (AR) ⏶125.25%

Arweave (AR) is the native token of the Arweave protocol, which offers decentralized and permanent data storage solutions. Its blockweave technology facilitates a sustainable archive for data requiring longevity, like historical records and digital art. The token has seen a rise in value due to increased demand for permanent data solutions, partnerships with large content platforms, and a growing reputation as a safeguard against data loss. Arweave's innovative endowment model, wherein user-paid, one-time storage fees are invested to perpetually fund the network, creates a unique deflationary economic structure that contrasts with traditional networks by offering stable storage costs over time.

The release of the public testnet for Arweave AO is a huge reason for the big price surge this month. It is a scalable blockchain network built atop the Arweave data storage platform, designed to accommodate high volumes of transactions and data-intensive applications such as social media and AI. Another positive catalyst for Arweave this month is the notable increase in network activity, with the platform reaching 3 billion transactions, a billion of which occurred in less than two months. This surge in activity has contributed to the AR token becoming deflationary, indicating growing demand for Arweave's services and the increasing utility of the AR token within its ecosystem.

Moving forward, Arweave has several potential catalysts on the horizon. The mainnet launch of Arweave AO, expected in 2024, is perhaps the most significant. This will mark the transition of Arweave AO from a testnet to a fully operational network, potentially revolutionizing the way data-intensive and smart contract applications are built and deployed on blockchain technology. Moreover, the team plans to conduct multiple audits of Arweave AO, ensuring its security and reliability before the mainnet goes live. These developments could significantly enhance Arweave's positioning in the decentralized data storage and blockchain application space, driving further adoption and utility of the AR token.

Beam (BEAM) ⏶111.57%

Beam network is a gaming network empowered by the Merit Circle DAO. Beam fosters a collaborative ecosystem for gamers and developers to shape the future of gaming. Its cornerstone is the Beam SDK, a versatile software development kit. This kit empowers developers with a diverse toolbox to seamlessly integrate and build blockchain features within their games. The native token, $BEAM, is required to interact within the Beam network and it also serves as a governance token for the Merit Circle DAO.

$BEAM started gaining value on 6 February after Merit Circle DAO announced their collaboration with Immutable and 0xPolygon to launch their first zkEVM marketplace called Sphere. Sphere will support the Immutable zkEVM and index every single collection on the Beam network. In line with the positive outlook on GameFi for 2024, Beam network continues to introduce new games such as MaviaGame, aiming to provide a constant source of supply and demand for gamers and creators alike. 

On 15 February however, an on-chain analysis by Spotonchain reported that 181M $BEAM tokens were phished from 3 victims which resulted in a 6.7% price drop. In response, Merit Circle DAO, the team behind Beam network, burned 37B $BEAM tokens to mitigate the impact of the loss and stabilize the network. $BEAM’s value then surged from $0.026 to $0.035 over the next few days, suggesting persistent confidence by traders in the Beam network. 

Looking ahead, Beam network is set to integrate the Beam companion application allowing gamers to have control over their in-game assets and house them within the application. They also can befriend and send assets to each other without friction. Beam network will focus on creating both an active subnet on Avalanche with a large number of transactions, and a broad deployment of Beam’s products on the Immutable zkEVM.

Flare (FLR) ⏶98.95%

Flare Network is a blockchain project designed to bring smart contract functionality to various blockchains. It aims to achieve this by enabling interoperability between networks that do not natively support smart contracts. Additionally, Flare aims to facilitate secure and trustless cross-chain transactions by offering a platform for DApps to be built on top of blockchains that were previously incompatible with smart contracts. Flare utilizes the Flare Time Series Oracle (FTSO) to securely provide external data to smart contracts on its network.

The positive momentum for Flare in February could be a ripple effect following the announcement in January that Google Cloud had joined the Flare blockchain as a validator and infrastructure provider. This partnership marked a substantial endorsement from one of the tech industry's giants. It showcased trust and recognition in Flare's technology and its potential for future applications. Google Cloud's involvement secures the network further, by acting as a validator and enhances the Flare Time Series Oracle (FTSO) by contributing to decentralized data access. Such a collaboration signals to the market and developers that Flare is a serious contender in the blockchain space, leading to increased interest and investment in FLR, Flare's native token.

Flare also announced a pivotal financial restructuring with its early backers, such as prominent firms like Hong Kong and US-based Kenetic as well as New York-based Aves Lair. This arrangement focused on reducing liquidity pressure and enhancing ecosystem investment through extended token vesting, sales restrictions, and a substantial reinvestment plan. By agreeing to extend FLR token distribution until Q1 2026 and limit sales to no more than 0.5% of daily volume, investors aimed to decrease market volatility. Furthermore, they committed to reinvesting 50% of all FLR sales proceeds into the Flare ecosystem, equating to a $35M injection into projects such as lending protocols, decentralized exchanges, and stablecoin minting, among others. This strategic restructuring signals a long-term commitment to network growth and stability, reinforcing Flare's vision for Web3 data security and the empowerment of Flare. This collective effort is expected to fortify the Flare ecosystem, encouraging sustainable development within it. 

Stacks (STX) ⏶96.11%

Stacks is a Bitcoin layer-2 solution that enables developers to build on Bitcoin without altering its core protocol, preserving the security and integrity of the BTC network while introducing the flexibility of smart contracts. This is achieved through unique mechanisms that connect Stacks' operations directly to Bitcoin, allowing for innovations like DeFi, NFTs, and more, all anchored to the stability and security of Bitcoin.

This impressive growth trajectory in February was partly fueled by the crypto community's excitement over Ordinals and the potential for Stacks to develop Bitcoin DeFi significantly. This is supported by research from Matrixport, which highlighted the potential of Ordinals NFTs to elevate STX into a billion-dollar token category, emphasizing Stacks' ability to leverage Bitcoin's blockchain security for transaction settlements

This month's rally in $STX has been closely tied to the broader Bitcoin ecosystem, reflecting a confluence of factors that points to the growing interest in layer-2 solutions like Stacks. A pivotal catalyst has been the increasing enthusiasm for Bitcoin Ordinals and the spot Bitcoin ETFs, which have collectively managed to amass over $10 billion in assets under management. STX's intrinsic link to Bitcoin's performance often causes its value to mirror BTC's trends. This month, STX's movements have closely followed Bitcoin's, acting similarly to a leveraged Bitcoin instrument, benefiting from the overall positive outlook on BTC as seen in the increased spike in STX’s price as compared to BTC’s price spike.

Looking to the future, the Stacks community is eagerly anticipating the Nakamoto Release, an upcoming network upgrade expected to occur before the next Bitcoin halving in April. This upgrade promises to introduce several enhancements, including faster transactions and the introduction of sBTC, a new Bitcoin-pegged token. sBTC aims to provide a means for Bitcoin holders to engage with smart contracts and for developers to build Bitcoin-centric applications more efficiently. The anticipation of this upgrade has been a significant factor driving the recent interest in $STX, as evidenced by the notable increase in daily active addresses and transactions on the network. Additionally, the total value locked (TVL) in Stacks' DeFi ecosystem has seen an impressive 830% increase since October 2023, signaling robust confidence and active participation.

Theta Network (THETA) ⏶90.54%

Theta is a project designed to revolutionize the way video streaming and edge computing are conducted by harnessing the power of blockchain technology. It aims to decentralize the streaming industry, providing more efficient, cost-effective, and improved ways of delivering video content and other data. The network utilizes two native tokens, THETA for governance and staking, and TFUEL for on-network operations such as transactions and deploying smart contracts. By leveraging a global network of distributed nodes, Theta offers an alternative to traditional content delivery pipelines and enables users to earn tokens by sharing their spare bandwidth and computing resources.

This month's surge in Theta's value is largely due to the buzz surrounding the upcoming launch of Theta EdgeCloud. The platform is a groundbreaking addition to Theta's offerings, promising to provide extensive GPU processing power for AI and video-related tasks. Edgecloud is especially significant as it extends the utility of Theta's network beyond video streaming, positioning it as a competitive player in the burgeoning field of AI computing. The announcement detailing the capabilities of EdgeCloud, including its ability to run sophisticated AI models, has acted as a strong positive catalyst, signaling Theta's commitment to expanding its technological frontiers and providing value-added services to its users.

Since its Mainnet 3.0 launch in 2021, Theta has steadily expanded its infrastructure. It now boasts a vast network of nearly 10,000 edge nodes, providing substantial GPU computing power. The patent granted in September 2023 for Theta's edge computing platform suggests the project's edge in decentralized computing over its competitors. Looking ahead, the Theta team will be enhancing its network with the Elite+ Booster feature and facilitating advanced AI development capabilities through its platform. Theta's past achievements pave the way for future milestones that could significantly influence the network's adoption and token valuation.

Fetch.ai (FET) ⏶88.89%

Fetch.ai is a blockchain-based platform focused on developing a decentralized digital economy through artificial intelligence and machine learning. It introduces autonomous agent technology to enable smart infrastructure across various industries such as finance, logistics, and energy. Its native token, $FET, facilitates transactions, network participation, and the development of smart contracts and dApps.

The significant surge in Fetch.ai's recent valuation is due to a series of pivotal developments. A notable factor was an announced partnership with Deutsche Telekom, a leading global telecommunications company, which will be running a validator node on Fetch.ai's network. This collaboration enhances the blockchain's security and shows the project's growing acceptance and potential for real-world integration. Further propelling Fetch.ai's momentum was the burgeoning interest in AI within the cryptocurrency sector as mentioned above. Additionally, Fetch.ai announced a milestone of surpassing five million transactions on its mainnet, evidencing the platform's increasing adoption and functionality. Such achievements highlight the protocol's expanding ecosystem and its capability to support significant activity levels.

The project's roadmap features further DeFi expansion, enhancements to its autonomous agent framework, and algorithmic improvements, promising a robust evolution of its offerings. Anticipated network updates aimed at boosting scalability and performance, coupled with strategic partnerships, are set to sustain Fetch.ai's growth momentum. Fetch.ai's unique proposition of integrating AI and ML with blockchain technology is a significant factor in its potential growth.

Gala Games (GALA) ⏶88.56%

Gala Games is a blockchain platform designed to decentralize the gaming industry, empowering players by granting them true ownership of in-game assets through non-fungible tokens (NFTs). The ecosystem utilizes the GALA token to facilitate transactions, governance, and incentivize participation within the platform.

A notable catalyst for GALA’s growth this month is the launch of GalaSwap on GalaChain, marking a significant advancement in the ecosystem's capabilities. GalaSwap introduces a decentralized, peer-to-peer token exchange platform, allowing users to swap tokens directly within the Gala ecosystem. This initial rollout of GalaSwap, although streamlined in features, establishes a solid foundation for a more feature-rich platform in the future. It supports the exchange of several tokens in the Gala ecosystem, enhancing the utility and liquidity of GALA and other associated tokens.

Looking ahead, Gala Games plans to fully open-source future versions of GalaSwap, encouraging community development and collaboration. It also plans to include more tokens along with advanced features like liquidity pools and slippage adjustments, promising a continually evolving and expanding trading ecosystem for the community.

Pyth Network (PYTH) ⏶82.07%

Pyth Network is an oracle solution designed to provide real-time market data to DeFi applications and trading platforms through Pyth, leveraging the security and decentralized nature of blockchain technology to aggregate data from first-party, high-quality sources. 

In February 2024, the Pyth Network launched the second phase of its Retrospective Airdrop program, targeting over 160 Dapps utilizing its data services. This phase follows an initial airdrop in November 2023, which was hailed as the largest cross-chain airdrop at the time, with 51,000 users claiming over 163 million PYTH tokens. The program's expansion aims to distribute PYTH Governance Tokens to a broad range of Dapps, including DEXs, crypto lending protocols, stablecoin issuers, and data analytics platforms. Pyth Network's commitment to enhancing its ecosystem's utility and governance through strategic token distribution fosters greater integration and utilization of its oracle services within the DeFi space. 

Pyth Network introduced price feeds for thirteen Bitcoin ETFs in February 2024, marking a pivotal moment in blending decentralized finance (DeFi) with traditional financial markets. By enabling access to real-time, accurate pricing data for these ETFs, Pyth facilitates the development of DeFi protocols that require reliable asset valuation and on-chain settlement. This move, following the U.S. government's approval of Bitcoin ETFs, is designed to bridge the gap between TradFi and DeFi, attracting institutional capital and enhancing liquidity within the DeFi ecosystem. The integration reflects Pyth Network's commitment to expanding the scope of DeFi by providing comprehensive market data, thus supporting the broader adoption of cryptocurrencies and fostering a more interconnected financial landscape

Pyth’s recent price surge this month can be attributed to its listing on Binance as well as its collaboration with Hedera Hashgraph (HBAR). Hedera Hashgraph is known for its high-performance, secure, and fair consensus algorithm and this collaboration could open up new avenues for Pyth Network to integrate its high-fidelity market data services with Hedera's applications.

Closing Remarks 

As February concludes, the cryptocurrency sector displays a surge of optimism, driven by the revitalization of BTC and ETH prices. 

On 13 March, the cryptocurrency community is closely monitoring the Ripple-SEC case for any developments among whispers of a potential settlement. The case centers on SEC's allegations that Ripple conducted unregistered securities offerings through its XRP token sales, which has significant implications for Ripple and the broader cryptocurrency market. A ruling in July 2023 favored Ripple for its sales on public exchanges while still finding fault with sales to certain institutional investors, marking a crucial point in the legal proceedings.

Another significant on-chain event due in March is Arbitrum’s unlocking of 1.11 billion ARB tokens, valued at approximately $1.2 billion. This event kicks off a four-year period of staggered unfreezing of its native digital asset, which Arb investors will be looking out for. 

The upcoming HYFI 2024 event in Singapore, is an exclusive one-day future-tech event scheduled for March 7, 2024, at ONE°15 Marina Sentosa Cove, Singapore. HYFI 2024 aims to bring together leaders and innovators in the fields of AI, fintech, traditional finance, and Web3 to discuss the future of the industry. Additionally, the upcoming World of Web3 Summit conference offers a unique networking environment centered on innovation and creating lasting connections.

As we look towards the upcoming month, our dedication to exploring the evolving landscape of cryptocurrency remains resolute. We are committed to offering thorough analysis and expert navigation through these shifting terrains. Keep an eye out for our continued deep dives into the crypto world via the Treehouse Daily Newsletter and Treehouse Insights Research, where we'll bring you the latest and most insightful updates. This commitment highlights our role as a key resource for understanding the complexities and opportunities within the ever-changing crypto market.

Disclaimer

This publication is provided for informational and entertainment purposes only. Nothing contained in this publication constitutes financial advice, trading advice, or any other advice, nor does it constitute an offer to buy or sell securities or any other assets or participate in any particular trading strategy. This publication does not take into account your personal investment objectives, financial situation, or needs. Treehouse does not warrant that the information provided in this publication is up-to-date or accurate.

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