Bitcoin (BTC) is still the leading narrative, as most token activity ended up with negative price performance. Building and projects continue to expand, but BTC is still the best growth performer despite volatility in the past months.
The Bitcoin narrative is still the performance benchmark, outpacing other projects with big expectations in 2024. Despite several categories of highly active tokens, the hopes of an altcoin market cycle were delayed.
Several narratives underperformed relative to BTC despite some local gains and success stories. The narratives are not abandoned either, but price growth may await a more active bull market. Recent statistics showed that even meme tokens, as a whole lagged, behind BTC.
In the past month, BTC increased its volatility to 3.17%, up from 1% in July. The leading token slid from its $65,000 stability level, reaching a monthly low of $49,000. After that, BTC again recovered closer to the $60,000 price range. In the past three months, BTC has also become the dominant asset in terms of market capitalization, while both blue chips and smaller tokens have taken a step back.
In the past three months, growth returned to already established assets, which also had the smallest losses. Besides BTC, the drawdowns were relatively low for ETH, TON, TRX, and BNB. Previous winners like PEPE and GROK had a more significant correction.
There is also a disparity between the BTC price performance and the overall Bitcoin narrative, which also includes Ordinals and ETFs. BTC itself is up as much as 40% in the year-to-date indicator, but the narrative ecosystem is up only 24%.
Relative strength of crypto narratives against Bitcoin in the last 30D
In accordance with the statistics, all narratives seems to be lagging behind BTC growth, with Bluechip DeFi and DePIN performed better compared to the others pic.twitter.com/OlNVmO0Efz
— Coin98 Analytics (@Coin98Analytics) August 30, 2024
Switching narratives erases previous hot topics
On a longer time frame, there is a switch between narratives, as RWA tokenization surpasses even meme tokens. Assets categorized as RWA are up 117% this year, based on a limited selection of tokens. The collection of RWA tokens managed to keep its valuation above $30B in total, peaking in April at above $56B in total market capitalization.
The divergence between BTC and altcoins has widened almost continuously since January. At the current stage, the signals suggest an altcoin rally is still not upcoming, but most assets may be in accumulation mode. Investors are also reassessing the market for more robust narratives with a higher chance of building viable products.
Blue chip DeFi is coming back, as leading projects like Aave (AAVE) and MakerDAO (MKR) are restructuring their stablecoin economics. Former star narratives like L3s or liquid staking are taking a step back.
Only outliers performed much better for the past month, as some tokens always rally against the market. AAVE was one of those tokens that rallied after the recent expansion of the GHO stablecoin and the mention of buybacks and burns of tokens.
Investors seek more reliable narratives
Some narrative tokens are also pressured by token unlocks and overhangs, as the projects came from the previous cycle of VC inflows. After the most recent market downturn in August, most narratives had a median monthly loss of around 12.8%.
The RWA tokenization narrative hinged on the creation of more BUIDL tokens, which now carry more than $500M in value. Tokenization was used to build reserves based on short-term US T-bills, where more than $2B in value was brought into the crypto market.
Narratives in 2024 have abandoned previous hot developments like Web3, gaming, and GameFi. NFTs are also on the losing side, despite attempts to revive some of the leading collections.
Narrative tokens also come with a warning on hype and marketing. Not all projects are building the products promised, and some are just coasting based on their tangential relation to a topic.
Based on CoinGecko’s research on page visits and popularity, the three top narratives for Q2 were memes, RWA tokens, and AI tokens. They were followed by assets in the Solana and Base ecosystem, niche narratives like BRC-20 assets, gaming, DePins, and the TON ecosystem.
Cryptopolitan reporting by Hristina Vasileva
