By Stan Low, Operations and Research at GRVT

Follow Stan on X: https://x.com/simplepeanut3

Throughout these market movements in the past month, the narrative around Bitcoin being a safe haven asset had returned. However, looking back at the current and past cycles, we note that Bitcoins correlation to Gold or equities is always in flux. So, are we truly back?

Markets

A look back this past month

Just a month ago in April, BTC and ETH were hovering over the $80+k and $1.5k levels respectively. Since then, we have seen both assets spike twice - once in late April, and the second time in the first week of May. Currently, BTC and ETH have settled down at $100+k and $2.5k levels respectively. 

Chart 1: BTC/USD vs. ETH/USD - first and second spikes demarcated by Orange lines

The first spike in the majors, alongside Gold, began in late-April off the back of (i) rising geopolitical trade tensions, (ii) lacklustre equities performance, and (iii) a weakening US dollar and its bond markets. The second spike in the majors that occurred in the first week of May, was mainly triggered by (i) speculated alleviation of US-China trade war tensions and (ii) rumoured negotiations of positive trade agreements originating from the US. 

Are we back?

Throughout these market movements in the past month, the narrative around Bitcoin being a safe haven asset had returned. However, looking back at the current and past cycles, we note that Bitcoins correlation to Gold or equities is always in flux. So, are we truly back? Or is this a mere relief rally before crypto markets return to the sad state it once was a month ago? Here are some points to think about:

Risk On:

• BTC rising alongside Gold, amidst (i) mediocre equities performance and (ii) trade tensions - “BTC has returned to becoming a safe haven asset now!”
• New Hampshire establishes first-ever state-level Bitcoin Strategic Reserve: allows up to 5% of public funds to be allocated to BTC and precious metals
• Easing trade tensions: (i) US-China trade tensions easing, (ii) easing of trade tensions between the US and UK, (iii) $600b deal for Saudi Arabia to invest in the US + lifting of Syria sanctions
• US CPI print coming in below expectations in for the month of April

Risk Off:

• Trump’s unpredictable/erratic nature + ever-looming trade tensions (despite recent easing)
• Fed being patient about rate cuts - (i) Powell mentioned that the the risks of being patient are “fairly low”, (ii) the Fed did not hike nor cut rates + US CPI print coming in below expectations

Barring any anomalies, I believe that the markets will trend sideways in the short term, with a downside risk in July if the expected rate cuts do not happen, but overall, a medium to long term positive view, in light of a coming rate cut(s) this year. 

Shunned for the past year - is the revenge of ETH here?

What is more surprising is ETH’s outstanding performance, where it had outperformed BTC by approximately 20% in the second spike, and is currently exceeding BTC by over 30% in performance. (Refer to Chart 1)

Over the past year, ETH has been a whipping boy of the space, contrasted alongside other ecosystems like Solana, which returned to popularity during the memecoin frenzy in 2024. Loathful conversations were plenty - (i) around selling activities of ETH by the Ethereum Foundation and (ii) why the price action of ETH remained stagnant, or even dropped, despite positive price action seen in BTC, amongst other bearish reasons and sentiments. 

Chart 2: ETH/BTC Profitable Days (Source: @_Checkmatey_ on X)

For the past 5 years, ETH has underperformed BTC, despite the asset and infrastructure permeating the crypto space (in terms of EVM-based blockchains, gas, DeFi, etc.), and achieving adoption in institutional tests with respect to tokenization. So why is ETH outperforming BTC now? (We are ruling out the Pectra upgrade, as in recent years, network upgrades in ETH or BTC networks did not have an impact on price movement) Coupled with its severe undervalued state in contrast to BTC, increasing exposure to ETH back in late-April was seen as a healthy risk-reward decision to make. Perhaps many institutional and retail players have come to the realization that at the industry’s current state, ETH is still relevant and here to stay. Here’s one potential catalyst to keep at the back of your mind: When will Ethereum Staking ETFs be introduced in the US? Has it already been priced in? 

Crypto

Since the memecoin frenzy in 2024, the crypto landscape has not seen a narrative as dominant thus far, aside from the influx of new stablecoins being launched, in preparation for increased institutional adoption. Nevertheless, here are a handful of highlights that you may want to keep an eye on:

Ethereum and Staking: Universal Staking and its impact(s)

In late April, Symbiotic announced the launch of its universal staking vaults. In short, universal staking is “a modular, permissionless staking framework designed to enable flexible and programmable economic coordination for onchain applications.” 

To avoid being over-technical, and looking into its architecture and processes, how would the introduction of universal staking frameworks impact users like us? Simply put, protocols can now create staking markets with tailored logic, roles, collateral types, and slashing conditions. The key implications of this? - (i) less siloed liquidity across chains and protocols, and (ii) increased financialization of staking, through new DeFi primitives such as structured products, growth of interest rate + borrow / lending markets, staking insurance, and more! 

We await to see if the adoption of universal staking would have a positive impact on ETH, and are looking forward to new DeFi primitives that are to be invented off the back of universal staking!

Crypto Gaming: Launch of Maplestory N, and its token, $NXPC - could crypto gaming return to relevancy and dominate the narrative?

On 15 May, Maplestory launched a blockchain version of its game, Maplestory N, along with its token, $NXPC, running on the Avalanche blockchain. 

Last year, Maplestory N conducted pioneer tests from July to December, boasting 506k unique active wallets, with an average of 49k unique daily active users - an initial success and a positive sign for the game’s launch. Close to the launch of the game and its token, Maplestory N was the first in mindshare across all pre-TGE projects. Whether the game is a success, remains to be seen, as it was launched today, but let’s have a look at the performance of $NXPC thus far:

Chart 3: NXPC/USD

At launch, $NXPC hit its peak of $3.80, before tumbling by approximately 35% to $2.44, within a span of 6-7 hours. Since then, the token has trended sideways, levelling out at around $2.60. 

According to Coinmarketcap, at the time of writing, 16.9% of tokens are in circulation (169m out of 1b tokens), implying future potential sell-pressure over the next 4 years. The next unlock is in approximately 8-9 months, which would increase $NXPC’s total token supply by a mere 0.21%. Outside of its token design/mechanics, this next unlock would most probably not have a negative impact on the token’s price, assuming market conditions remain positive.

With the success of another recently released crypto game, “Off The Grid”, that draws in approximately 500k daily active users, could Maplestory N be the catalyst that catapults the gaming segment to the forefront of the space?

Tokenization and Regulatory Adoption: DTCC’s new appchain

In past cycles, existentialist questions were always posed - is crypto dead? Are we here to stay? If ETFs and institutional tests of blockchains have not removed those existentialist doubts from your mind, here’s something to boost your conviction that blockchain technology is here to stay: The Depository Trust & Clearing Corporation (DTCC), owned by a conglomeration of banks, that has monopolized settlements globally, announced that it will be launching a new collateral appchain.

The purpose of this new appchain is to facilitate the mobility of assets such as equities, treasuries, money market funds, crypto, etc., free of any liquidity or settlement constraints. Essentially, improving on its traditional T+1 settlement ways.

Let’s put on our tin foil hat for a moment - one would ask: “The DTCC is earning so much from the overnight rate, by settling assets in T+1! Why would they want to give that up, by leveraging blockchain technology to settle in T+0?” Perhaps the big boys are afraid of us now - that the appeal of instant settlement through blockchain technology is coming to eat their lunch. And now, they need to pivot in order to not lose out. 

Given the increasing trend in new stablecoins being launched, and institutional tests of blockchains in the recent months, perhaps tokenization could be a trend to watch.