Layer 1 Tokens Rally As Investors Shrug Off GDP Growth
Aptos and Canto Enjoy Stellar Week
By: Owen Fernau •Markets
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, 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 CosmosThe 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.