Layer 1 Tokens Rally As Investors Shrug Off GDP Growth

Tokens for smart contract platforms defied the mild swoon in crypto markets Thursday and Friday.

MATIC, the native token of the Polygon blockchain, a popular scaling solution for Ethereum, jumped 8% in the last 24 hours in early morning trading U.K. time. Fantom’s FTM is up 6%, according to The Defiant Terminal.

Meanwhile, Ether fell almost 2% and Bitcoin was flat a day after the U.S. posted a 2.9% annualized increase in GDP, a sign the economy remains resilient and may forestall a recession many investors are expecting. The S&P 500 and Nasdaq ended the day up over 1% on the news.

Aptos Surges 120%

APT, the native token of the recently launched Aptos blockchain, is this week’s big winner, having more than doubled in the past week.

APT Price. Source: Coinmarketcap

Despite the price action, many are skeptical that APT’s fully diluted value (FDV), the total market capitalization of a digital asset if all tokens are unlocked, is unrealistically high.

Quinten Francois, a popular investor on Twitter, noted that Aptos’ FDV is double that of Polygon’s. “Regardless of how promising Aptos is, this doesn’t justify such a valuation,” he wrote.

Canto Doubles

Canto, another emerging smart contract platform, saw its token continue to rally with a 100% gain on the week after picking up a public endorsement from venture fund Variant.

Canto Rallies After Variant Discloses Stake

Ethereum-compatible Layer 1 is the Fifth-Largest Blockchain on Cosmos

The Defiant

Pierino Ursone, head of options at Deribit, a derivatives platform which handles the majority of Bitcoin and Ether options, sees the market as entering a calmer phase.

‘Business as Usual’

“We can definitely see the ripple effects of FTX, but this now seems to be considered merely as a fact, and we are back to a kind of ‘business as usual,’” he told The Defiant.

Ursone also noted that Bitcoin, which underperformed the S&P 500 in the wake of the FTX crisis, has now returned to levels in line with the index. Indeed, BTC has dramatically outpaced the S&P 500 in 2023, having jumped 36% compared to the index’s 6% gain.

Bitcoin vs S&P500

Ursone added that while the correlation between Bitcoin and the S&P 500 has returned, he doesn’t think that it will persist over the long term.

LDO, OP Down 10%

The biggest loser on the day is giving back some recent gains — LDO, the governance token for Lido, a liquid staking derivative (LSD) protocol, dropped 10% after being red hot of late.

Optimism, a Layer 2 network which hit an all-time high on Jan. 25, also ceded some ground with a 10% drop, according to The Defiant Terminal.