Institutions Buying Memecoins? You NEED To See This!

Be honest: did you have institutions apeing into memecoins on your 2024 bingo card? Once upon a time, the so-called smart money simply buying BTC would have been enough to blow our minds, but well, this is crypto and it comes at you fast.

Yes, it turns out that the degens have taken over the asylum and now even VCs are chasing those insane returns that only memes can offer. It was perhaps inevitable that big money would be unable to resist the chance of a doggy-themed 500x for ever, but it’s nevertheless going to be one of the stories of this cycle. So, how on earth did we get here?

In today’s video, we analyse this latest twist in the tale of crypto and seek to identify where all this madness began. We look at which institutions have gone ape and what they’ve been buying. And, as if that wasn’t enough, we also take a look at how some of them are justifying piling millions into memes. We really are living in a simulation folks.

You can watch that video here.

📈 Crypto Market Forecast 📈

After a fairly mild week, it looks like the wild weather is about to return. That’s because there are some very big macro and crypto factors on the horizon. For macro, we’ve got the CPI for April, which will be published on Wednesday. Given how much the markets reacted to the recent employment print, it’s safe to assume they’ll respond strongly to the CPI too.

Here’s where things get interesting. The reason why the markets rallied in response to that employment print was because it was weaker than expected, increasing the chances that the Fed will cut rates to stimulate the economy. The thing is, employment isn’t the only indicator suggesting the economy is weakening. There are many others, such as consumer confidence.

Seeing as all of these economically bearish indicators were for April, it seems likely that the CPI will come in lower than investors currently expect. This assumes that people stopped spending as much, which seems to be the case based on the recent earnings reports. Take a second to consider that McDonald’s missed its Q1 earnings, something that’s apparently very rare.

Notably, this economic weakness would explain why there has been a relative lack of retail participation in the crypto market. The average retail investor simply can’t afford to ape into altcoins. The only ones who can are those already in crypto, which is why we’ve seen such a big memecoin craze. It’s all experienced crypto retail (and some institutions) trading on DEXes, not new retail investors.

What will it take for retail investors to come back? Lower interest rates in response to falling inflation could do the trick, and the proof can be seen on the charts. Some of you might recall us highlighting the correlation between the Russell 2000 (RUT) and altcoins. Well, the RUT appears to be on the brink of a huge breakout. If the CPI comes in lower this week, it may break to the upside.

In turn, altcoins would follow the RUT, as they have been since the lows in October 2023 (which could have been the cycle lows for most altcoins, by the way). The reason for this correlation is likely due to the overlap between the cohorts that invest in small-cap stocks and altcoins: retail. The r/WallStreetBets subreddit alone could account for this correlation, given its past actions.

This ties into the crypto side of things, which could however offset the bullishness of the macro. The SEC has issued many Wells Notices to major crypto projects and companies in recent weeks. There is a very high chance that one of these will result in an actual lawsuit. Consensys could be the first, seeing as it received a Wells Notice on April 10th and the SEC can only sue after 30 days.

That said, Uniswap is tied for first in this sense, as it also received a Wells Notice on April 10th. As we’ve mentioned in multiple videos and posts, the lawsuits themselves are not that concerning and have probably already been priced in. What has not been priced in, however, are the actual contents of any lawsuit, which could have implications for Ethereum’s ecosystem.

The elephant in the room here is the spot Ethereum ETFs, which the SEC will need to accept or reject by May 23rd. Many believe that the SEC will launch enforcement actions against entities in Ethereum’s ecosystem to stop the ETF approval. If this is the case, then the SEC could announce these lawsuits as early as this week. But, here’s a scenario to consider.

If the SEC doesn’t launch an enforcement action by May 23rd, it’s possible that the ETFs will still be approved. More importantly, both JP Morgan and BlackRock have noted that the recent lawsuits should have no bearing on the ETF approval if the SEC follows through. In other words, they are two separate issues. This means an approval is theoretically possible, albeit unlikely.

If you’re looking for a really contrarian trade though, betting on a spot Ethereum ETF approval could well be it. Not financial advice.

🤓 The TON Thesis 🤓

Over the past few months, Toncoin (TON) has emerged as a powerhouse in terms of price performance among the other billion-dollar market cap coins. Notably, data from CoinMarketCap shows that the price of TON went from roughly $2 at the end of February to a high of $7 in the second week of April. That’s a 3.2x in less than two months.

It wouldn’t be a stretch to say this caught many by surprise, especially since many have been sceptical about the project’s adoption following its rocky start in 2018.

If you don’t know the story, TON, which now stands for ‘The Open Network’, originally started as the ‘Telegram Open Network’ - a blockchain developed by Telegram founders Pavel and Nikolai Durov in 2018.

Telegram originally positioned TON as the messaging platform’s native blockchain infrastructure and raised $1.7B in a 2018 ICO. However, shortly after this raise, the US Securities and Exchange Commission filed a lawsuit accusing Telegram of violating federal security laws through its ICO. This lawsuit led to Telegram abandoning the TON project in May 2020.

Many assumed this was the end of the project, until it was brought back to life in 2021 by a decentralised group of community members who took over its development. They adopted the testnet left by Telegram as the chain’s mainnet and rebranded the project under its current moniker The Open Network. Toncoin is also a rebranding of the testnet tokens originally issued and abandoned by Telegram in 2020.

Now, after a slow and steady development phase of two years, TON appears to be shaping up as one of the leading L1 plays of this cycle. The primary driver behind this is Telegram’s announcement of its intention to adopt TON as its primary blockchain in its expansion plans for the messaging app's upcoming features.

Thankfully, this time it appears that Telegram has learned to take the necessary measures to protect itself legally.

Specifically, in an interview with data analytics platform Artemis, TON’s Director of Investments Justin Hyun revealed that the adoption of TON by Telegram is part of a commercial agreement between The Open Network Foundation and Telegram. Under the agreement, The Open Network Foundation pays a fee to Telegram in exchange for the messaging platform’s promotion of the utility of the TON Blockchain. He highlights this as being similar to how Google pays Apple so that Google remains the default search engine on Apple devices.

That said, the first adoption of TON by Telegram appears to be the launch of a 50% revenue-share program for Telegram channels. Under this program, Telegram will pay channel owners their share of ad revenue exclusively via Toncoin on the TON blockchain.

Telegram made this announcement at the end of February this year – this coincides with the initial rally we saw in the price of TON. However, it appears that there are also other factors influencing the recent rise in TON’s price.

For instance, TON’s explosive price action over the past two months appears to coincide with a rise in TVL (Total Value Locked) and on-chain activity. Notably, DefiLlama shows that the TVL on TON has risen from $18M at the end of February to an all-time high of $234M at the time of writing. That’s a 13x growth.

This rise in TVL is a result of the TON foundation’s launch of a Toncoin community rewards initiative named The Open League. The program, which began on April 1st, will distribute 30 million TON tokens (worth roughly $180M at current price) to competing projects and the TON ecosystem over the coming months.

On that note, The Open League is also an excellent way for new users to get started with TON and be eligible for airdrops. Notably, it features three ways for users to get involved with the ecosystem through activities categorised in terms of difficulty.

One of the simplest ways is to engage with Telegram mini-apps on the TON blockchain. For instance, some of the more popular apps over the past few months have been mini-games such as Notcoin, Catizen, The Pixels, Gatto and Hamster Kombat. Notcoin in particular has seen massive success and is poised for a listing on OKX, Bybit and Binance in the coming week.

The TON foundation also keeps announcing airdrops of Toncoins for specific categories of TON ecosystem projects. Just this past week, over $700,000 in TON were airdropped to 1,757 eligible wallets that traded tokens and NFTs belonging to gaming projects within the ecosystem. That’s an average of roughly $400 in rewards per wallet. Based on current track records, these airdrops go out to users at least twice every month.

TON truly appears to have the potential to become one of the first blockchains to reach mass adoption, thanks to its close ties with Telegram. This appears to be recognised by other big money wallets in the space, including VC firm Pantera, whose founder Dan Morehead stated that TON is the largest investment the company has ever made.

So, maybe it’s a bad idea to continue fading Toncoin?

🐉 New Coin Bureau Mandarin Channel 🐉

We have a simple mission statement: To help pave the road towards cryptocurrency mass adoption through education: one person at a time.

And, we have made many strides to that effect by creating English, Spanish and even Japanese crypto YouTube channels.  

However, a whopping 1.3 billion people speak Mandarin as their native language and there are big Mandarin speaking diasporas in places like Canada, UK, Singapore and Malaysia, to name a few. That’s a lot of people who might need help in getting access to high quality crypto educational content.

So, we thought it would be a great idea to team up with two of our Mandarin speaking friends and launch Coin Bureau Mandarin with them!

Recently, Coin Bureau Mandarin host JZ has interviewed:

* Bybit CEO Ben Zhou
* TrustWallet CEO Eowyn

👉 Please do give Coin Bureau Mandarin a sub for the algorithm and share the channel with any Mandarin speaking friends you have!

🔥 Hot Deal of The Week 🔥

Looking to prepare for that altseason? Well you’ll need a top-notch exchange with access to all the altcoins out there.

Since 2017, Kucoin has built a reputation for being the veritable altcoin buffet. Indeed, you’ll probably struggle to find a crypto OG that doesn’t have an account at Kucoin.

We recently did a complete overview on Kucoin. So, if you want to learn about the exchange and how it is in 2024, then it’s well worth checking out.

Also, we have been able to secure an exclusive deal at Kucoin for just you guys. Sign up via the Coin Bureau and you’ll get up to 60% trading fee discount!

👉 Sign up to Kucoin

🔮 Video Pipeline 🔮

* How the US Treasury Is Impacting the Markets?
* Buy Now Pay Later: What it means for the economy?
* China’s Social Credit Score: A warning of what is to come?
* IMF Bitcoin Report: Startling revelations!

🏆 What's New at This Week? 🏆

* Top Cosmos Projects
* Best Ripple XRP Wallets
* TON: An Emerging DEFI Titan?
* Top Solana Memecoins
* Analysis of best crypto stocks!

📖 Quote of the Week 📖

There are a number of reasons why so many crypto investors will stand by the virtue of the long term hodl. Not only is it a lot less stressful, but it could also be the best strategy for sustainable returns over time.

“Activity is the enemy of investment returns” - Warren Buffet

Team Coin Bureau

Disclosure: Authors may own cryptoassets named in this newsletter. These are unqualified opinions, and a Coin Bureau newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor. 

Guy Turner

Guy is one of the founding members and face of the Coin Bureau. Like many of us, he is just an average joe who became “crypto curious” back in 2013. After recognising the potential of blockchain technology, Guy set off on a mission to create crypto educational content, working with others to start the Coin Bureau website and released our first video on YouTube in 2019. You can learn more about him in his Who is Guy? blogpost.

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