Data & Insights: Bitcoin All Time Highs; Memecoin Interest Lows

Happy ATH to All Who Celebrate

• Bitcoin reached a new all-time high on Thursday, 22 May 2025, closing the day at $111,390 and briefly touching an intra-day peak of $112,000.
  • This follows a monstrous 45% rally that began 7 weeks ago, when BTC was trading at $76,450 in early April 2025.
  • Prior to this uptrend, BTC had declined from over $100,000 in January to ~$76,000, largely due to trade war concerns, particularly from aggressive tariff threats issued by the US.
  • In early April, however, President Donald Trump announced a 90-day suspension of those tariffs to facilitate trade talks.
  • That policy shift marked the market bottom for risk assets, with BTC rallying over 45% in the weeks that followed to set new highs.
  • Meanwhile, the S&P 500 and NASDAQ also surged by over 20% and 27%, respectively, over the same period.
• Alongside BTC’s rally in recent weeks, the price of ETH has also experienced a similarly impressive performance.
  • The price of ETH has risen from $1,470 on 8 April to $2,530 as of the time of writing on 25 May 2025.
  • This marks a notable 72% increase in a span of just 7 weeks for the 2nd largest non-stablecoin crypto asset by market capitalization.
  • This was also what triggered the largest amount of single-day short liquidations for the year so far, with over $670 million in total short liquidations at the time, as discussed in our newsletter 2 weeks ago.
• Though interestingly, despite BTC trading at all-time highs as of the time of writing, open interest (OI) paints a more nuanced picture.
  • OI is the estimated notional value of all open futures positions, or the aggregate dollar value of outstanding contract specified BTC deliverables
  • OI of BTC futures on Binance currently stands at $12.5 billion, nearly 10% lower than its record high of $13.7 billion from the second week of December 2024.
  • On the other hand, aggregated OI of BTC futures on Bybit currently stands at $7.6 billion, which is still 15% lower than its record high of $8.95 billion from the second week of December 2024.
  • Even more telling, Bybit’s OI is still down 10% from as recently as 21 February 2025, when it hit $8.5 billion
  • This could mean that despite the price of BTC making new highs, the derivatives market has not fully followed through with the same level of leverage and positioning.

Pretty Good Strategy

• Just as Bitcoin has rallied to new all-time highs over the past 2 months, Bitcoin-adjacent stocks have also marked impressive price appreciations since the announcement of the initial 90-day tariff pause.
  • The clearest bellwether is Strategy (ticker: MSTR), which has explicitly repositioned itself as a leveraged Bitcoin operating company.
  • Since 2020, the firm has issued convertible notes, senior secured bonds, and more recently an “at-the-market” (ATM) equity program to raise capital, then redeployed nearly every dollar (plus a portion of operating cash flow) into incremental BTC purchases.
  • MSTR shareholders are effectively buying a publicly traded BTC tracker with embedded software cash flow and modest tax advantages.
  • The market capitalization of MSTR increased by over 81% in the last 7 weeks alone, from $63.3 billion to $115 billion.
  • Strategy has also recently announced a $2.1 billion Series A Preferred Stock offering, marking its most aggressive capital raise yet in its ongoing campaign to accumulate more Bitcoin.
• On the other side of the Pacific in Japan, Metaplanet (TSE:3350) has embraced a similar playbook, albeit on a smaller scale, by raising yen-denominated debt and equity, converting proceeds into Bitcoin.
  • Metaplanet’s share price has rocketed more than 220% over the same period, reflecting both the mark-to-market gain on its initial BTC purchases and speculative anticipation that it could evolve into “Japan’s MicroStrategy.”
• By tapping capital markets and pledging to accumulate BTC irrespective of short-term volatility, both firms amplify Bitcoin beta through corporate leverage.
  • This model works spectacularly when BTC is trending higher (equity investors capture spot appreciation plus balance-sheet optionality), but it also introduces refinancing and mark-to-market risk if crypto prices retreat or if credit markets tighten.
  • For now, the market is rewarding the strategy, yet the durability of these premiums will hinge on BTC’s trajectory, funding costs, and each company’s ability to navigate cyclical drawdowns without diluting shareholders.
  • If Bitcoin continues to make new highs and the equity market keeps rewarding “embedded-BTC” treasuries with valuation premiums, it is reasonable to expect additional small- and mid-cap firms, particularly those with thin core revenue lines or cyclical cash flows, to emulate the Strategy/Metaplanet template.
  • While widespread corporate adoption would likely be a powerful incremental tailwind for Bitcoin’s price, it would also weave new strands of traditional-market leverage into the asset, creating a feedback loop that could not only magnify bullmarket euphoria, but also amplify bear market stress.

Where’d retail go?

• Despite the strong market performance and notable memecoin gains, retail interest appears conspicuously absent from the current rally. 
  • Google search volume for "memecoin" sits at just 14 on the relative scale, a stark contrast to January's peak of 100 and only marginally lower than the 19 recorded in the previous month.
  • This muted search activity comes even as top memecoins have surged approximately 50% according to the GMCI memecoin index in the last month, suggesting that recent price appreciation hasn't translated into broader public curiosity or participation.
• The absence of retail engagement extends beyond memecoin-specific searches, with other key terms like "bitcoin," "ethereum," "coinbase," and "solana" remaining relatively flat despite market gains.
  • App store rankings corroborate this trend, with Coinbase and Robinhood, longtime barometers of retail crypto involvement, hovering around 300th place in the US Apple App Store rankings rather than climbing toward the top charts typically seen during retail surges.
  • During previous cycles, these platforms would often rank among the top downloaded apps as new users flocked to capitalize on market momentum.
• The current market dynamics may suggest this rally has been primarily driven by crypto-native investors and institutional participants rather than the retail wave that characterized previous runs.
  • This composition could present an interesting dynamic moving forward, as sustained retail engagement has historically been a key component of major market cycles in crypto.
  • The question remains if and when retail interest will catch up to current price levels, or if this cycle will continue to be led by crypto natives and institutions. 

HYPErliquid Dominance

• Hyperliquid has emerged as the undisputed leader in decentralized perpetual trading, commanding an impressive 80% market share among DeFi perp protocols and establishing itself as the clear winner in the race to capture traders migrating away from centralized exchanges.
  • Beginning in November 2024, Hyperliquid held approximately 30% market share, meaning the protocol has more than doubled its dominance in just six months.
  • The platform's growth trajectory highlights the increasing appeal of decentralized perpetual exchanges, which offer traders benefits including self-custody of funds, elimination of KYC requirements, and reduced counterparty risk compared to traditional centralized platforms.
• Despite its position in the DEX perp space, Hyperliquid still has substantial room for growth when viewed against the broader perpetual trading landscape.
  • The platform processed $165 billion in volume this month compared to Binance's $1.7 trillion, representing roughly 9% of the centralized giant's perpetual trading activity.
  • This comparison underscores both the scale of opportunity ahead and the significant progress already made in capturing market share from traditional exchanges.
• Hyperliquid's appeal extends beyond typical DeFi advantages, with its unique funding and tokenomics structure resonating particularly well with the crypto community.
  • Unlike many protocols that raised venture capital before launching tokens, Hyperliquid bootstrapped its development without VC funding, meaning institutional investors must purchase tokens on the open market alongside retail participants.
  • This approach has eliminated concerns about large VC token unlocks that have impacted other projects, creating a more balanced distribution model.
• The protocol's success signals a broader maturation of DeFi derivatives infrastructure, demonstrating that decentralized platforms can compete effectively with centralized exchanges on both user experience and liquidity provision.
  • As regulatory scrutiny continues to intensify around centralized platforms, Hyperliquid's growth may accelerate as traders seek alternatives that offer similar functionality without centralized risks.

Keep Building on Base

• Base has demonstrated impressive resilience in maintaining its growth trajectory, with transaction activity rebounding to approximately 10 million daily transactions after a brief dip to around 7 million in recent weeks.
  • Daily active addresses have similarly recovered to approximately 1.5 million, indicating that the temporary decline in activity was more of a market-driven pullback rather than a fundamental loss of user interest in the Coinbase-backed Layer 2.
  • This recovery pattern distinguishes Base from other Layer 2 solutions that have struggled to maintain consistent activity levels during periods of broader market uncertainty.
• The network's appeal to builders and developers stems significantly from its direct association with Coinbase, which provides unique advantages beyond simple brand recognition.
  • Coinbase has invested heavily in developer infrastructure and tooling for Base, creating a more accessible environment for projects looking to build on Layer 2 technology.
  • The Base ecosystem fund actively supports projects building on the network, providing both financial backing and strategic guidance that many competing Layer 2s cannot match through their own resources.
• Base's trading infrastructure has evolved into a formidable competitor to both centralized exchanges and Ethereum mainnet activity, processing $1.3 billion in DEX volume over the past 24 hours.
  • Aerodrome and Uniswap combine to facilitate approximately $1 billion of this trading volume, demonstrating that the network has successfully attracted established DeFi protocols while fostering native innovation.
  • This trading volume represents a significant portion of both Coinbase's centralized exchange volume ($3 billion) and Ethereum mainnet DEX activity (also around $3 billion), highlighting Base's emergence as a legitimate alternative trading venue.