Data & Insights: Ethereum's On-Chain Volume Surges; Coinbase Climbs App Store Rankings

ETH On-Chain Is So Back

• Last Friday, November 15, 2024, Ethereum’s daily on-chain volume soared to $7.13 billion, marking the highest single-day volume of the year.
  • This represents a 1% increase over the previous yearly high set in March, underscoring a resurgence in Ethereum’s network activity as the broader crypto market turns bullish.
• Throughout 2024, Ethereum’s on-chain trading volume mirrored that of the wider crypto market, with an overall consistent risk-off downtrend despite momentary spikes during the second and third quarters
  • However, November has been a turning point, driven by a combination of market-specific factors not limited to large inflows from Bitcoin and Ethereum’s ETFs as well as a Trump victory in the US Presidential election.
• Bitcoin’s rally to new all-time highs earlier this month has served as a key catalyst, pulling Ethereum along in its wake and reigniting speculative and transactional activity across the network.
  • Over just two weeks, Ethereum’s on-chain volume has surged by 85%, from $3.84 billion on November 1 to $7.13 billion on November 15.
  • Looking ahead, on-chain activity on Ethereum looks poised for a period of reacceleration due to its position as a trading environment further down the risk curve that thrives as liquidity moves on-chain following rallies on large-cap assets on centralized exchanges.

Meme Listing Galore

• The memecoin sector takes the lead in this past week’s market gains amid wider bullish momentum.
  • The GMMEME index, which tracks key memecoins such as PEPE, SHIB, and DOGE, has surged by over 90% in November 2024.
  • For reference, other indexes such as the GM30 and GML1 indices, have gone up by an average of just 36% in the same time period.
  • Within the GMMEME index, PEPE, BONK and WIF were the outperformers with weekly gains of over 70%, 100% and 32%, respectively.
  • This comes following the listings of major memecoins like PEPE and WIF on Coinbase and Robinhood, prompting their prices to surge amid speculative inflows from a new demographic on these platforms.
• Within the overall memecoin sector that includes tokens outside the GMMEME index, MOODENG and PNUT were also standout performers, having gone up by 47% and a staggering 1,500%, respectively, this week.
  • PNUT, a memecoin inspired by the viral P’Nut the squirrel, added $1.68 billion to its valuation in this past week alone, following a listing on Binance’s spot market as well as the squirrel itself being mentioned and acknowledged multiple times by Elon Musk on X.
• The rapid pace and scale of these memecoin listings are unprecedented, signaling a shift in strategy by major centralized exchanges and platforms.
  • This trend could be tied to the recent U.S. presidential election, where Donald Trump’s victory has rekindled optimism for a more crypto-friendly regulatory environment.
  • Trump’s expected leniency toward the industry contrasts sharply with the restrictive stance of the previous administration and has likely encouraged platforms to accelerate the onboarding of high-demand, speculative tokens.
  • While memecoins often face criticism for their lack of utility, retail investors’ current preference towards them over utility tokens is clearly displayed by the trading volumes they generate, making memecoins not only a crucial part of the overall industry now but also a lucrative goldmine for exchanges to list.

Coinbase Climbing Charts

• Coinbase has surged in the U.S. App Store rankings, climbing from 435th place on November 4th to 8th briefly on November 13th, marking its first breakthrough into the top 10 free iPhone apps this cycle.
  • The exchange has recorded $71 billion in volume so far this month, alongside a 42% increase in its stock price over the past 30 days.
  • Trading app Robinhood showed a similar trajectory, reaching rank 11 during the same period, indicating broader retail interest in digital asset trading.
• The rapid rise in app rankings coincides with several market developments we’ve seen since the US elections.
  • Bitcoin's recent price appreciation has likely driven increased retail interest in cryptocurrency trading. Coinbase also recently listed popular memecoins WIF and PEPE, which may have attracted additional users to the platform.
  • The combination of rising prices and new token listings appears to be drawing retail traders back to centralized exchanges.
• During the previous bull market cycle, Coinbase's rise to the top of app store rankings served as one indicator of market peak. However, the current cycle presents notable differences:
  • The speed of Coinbase's ranking improvement - reaching top 10 in just nine days - suggests different market dynamics at play.
  • Institutional participation through ETFs and regulatory clarity has created a markedly different market environment compared to previous cycles.
• While app store rankings can provide insight into retail participation, they should be considered alongside other market indicators.
  • Historical patterns may not reliably predict future market movements in an evolving crypto landscape.
  • The intersection of traditional finance and crypto markets creates new dynamics that could affect how top signals manifest.

Exchange Volume Bring The Boom

• Daily exchange trading volumes have reached a 12-month high of $117 billion compared to an average of 44 billion over the same time period. 
  • USD-supported exchanges have already recorded $229 billion in volume by mid-November, nearly matching October's total of $237 billion with half the month remaining.
  • This surge coincides with Bitcoin setting new all-time highs above $90,000, indicating increased market participation across the trading ecosystem.
• The volume metrics suggest evolving market dynamics across the industry. 
  • The rapid pace of volume growth in just half a month points to concentrated trading activity rather than gradual accumulation.
  • Current volumes have set impressive marks so far, suggesting higher trading intensity per price level.
  • The sustained high volume days across structure products like the ETFs indicate persistent market engagement rather than isolated spikes.
• The market structure shows notable differences from the 2021 cycle: 
  • This cycle is contextualized with a more regulated environment with established institutional infrastructure and a more positive regulatory outlook.
  • The combination of spot ETF trading and traditional exchange volumes suggests broader market participation from more traditional asset allocators.
• The sustainability of these volume levels may depend on continued price discovery.
  • However, higher baseline trading volumes could become the new normal as market infrastructure matures.
  • The relationship between volume and price volatility may evolve as market participants adapt to new trading patterns.

Bitcoin Dominates

• Bitcoin's market dominance has reached a year-to-date high of 57%, reflecting Bitcoin's growing share of the total cryptocurrency market capitalization.
  • Bitcoin recently set a new all-time high above $90,000, contributing to the broader crypto market cap reaching $3 trillion.
  • This level of dominance marks a significant shift from the previous cycle's low of 39% during the DeFi boom in May 2021.
• The current market structure shows interesting divergences from previous cycles:
  • Despite ETH/BTC dropping to 20%, memecoin performance has emerged as a notable counterforce to Bitcoin's dominance.
  • The total crypto market capitalization has already reached $3 trillion, potentially early in this cycle, compared to the previous cycle's peak of $3 trillion in November 2021.
  • This early achievement of the previous cycle's peak market cap might suggest room for further expansion in the overall crypto market.
• Historical patterns from previous cycles provide context for current market dynamics.
  • During the last cycle, Bitcoin's declining dominance to 39% coincided with the peak of the DeFi movement and subsequent altcoin rallies.
  • The current 57% dominance level, coupled with Bitcoin's price strength, could signal that we are at the start of this cycle while Bitcoin enters price discovery.
• Historical patterns offer perspective, but several factors distinguish the current cycle.
  • Institutional participation through spot crypto ETFs has created new market dynamics.
  • Traditional correlation patterns between Bitcoin dominance and altcoin performance may not hold in this market environment the way they have previously.