December L1 Landscape Recap

Crypto markets ended the last month of 2023 on a positive note, spurred on widespread anticipation of a Bitcoin ETF approval in January 2024, as well as rising optimism over dovish Federal Reserve interest rate policies in the near term. By the end of December, futures markets were estimating a ~88% probability of either a federal funds rate pause or cut by the March 2024 Fed meeting, up from ~63% at the beginning of the month.

Over the same period, the price of Bitcoin rose by ~9.3%, reflecting similar optimism within crypto markets for favorable news in early 2024. These sentiments were also expressed throughout the Layer 1 (L1) ecosystem, with broad signs of increased interest and activity across nearly all metrics.