The Changing Market Structure of Crypto
For years, crypto participants have been conditioned to the market trading in 4 year cycles, pegged to Bitcoin’s halving events. However, the introduction of Bitcoin ETFs have transformed Bitcoin into an institutionally investable asset class. These ETFs have established a more consistent baseline demand, smoothing out BTC’s volatility. This is one of the reasons as to why crypto is evolving beyond this rigid structure. Instead, the market now experiences shorter bursts of outperformance and underperformance, driven by liquidity flows, investor positioning, and changing risk sentiment. While Bitcoin is experiencing increased price stability, altcoins remain as volatile as ever, still subject to reflexive cycles of euphoria and panic.

On August 5, 2024, global financial markets experienced a significant downturn, marking a local bottom for risk-on assets, including both stocks and cryptocurrencies. This sharp decline was primarily triggered by the Bank of Japan's (BoJ) unexpected decision to raise its benchmark interest rate from 0.1% to 0.25%, a move that caught investors off guard and led to widespread market volatility. The main implication of this was the unwinding of the yen carry trade, which exerted significant selling pressure on global equities and other risk assets.

The market quickly shifted as bullish catalysts emerged, most notably Donald Trump’s election victory, which signaled regulatory reform and a pro-crypto stance from the new SEC leadership. This ushered in a period of euphoric outperformance, often dubbed the "Trump Trade," as investors anticipated a more favorable environment for digital assets. Over the next few months, the market experienced a wave of risk-on sentiment, with capital rotating aggressively into altcoins. Now, with the initial euphoria cooling, we take a closer look at how leading tokens have performed since then, evaluating their resilience, volatility, and broader market trends.

Layer 1s

Despite macro uncertainty, $BTC and $BNB have demonstrated the highest relative strength, holding up better than other L1s. $BTC remains propped up by ETF flows, increasing institutional adoption and Trump's executive orders for a strategic Bitcoin reserve - reinforcing its position as the market’s reserve asset. Meanwhile, $BNB has maintained dominance as the top centralised exchange (CEX) token, consistently staying ahead of trends with constant airdrops for $BNB holders during new listings, swift token listings, innovative initiatives like Binance Alpha 2.0, and deeper integration with on-chain ecosystems—increasing accessibility for users.

$ETH and $AVAX have significantly underperformed this cycle, primarily due to a lack of new, impactful initiatives—a crucial factor in crypto’s attention-driven market. Without strong narratives or upgrades that capture interest, they have struggled to keep pace with competitors. $SOL, on the other hand, dominated the L1 narrative, largely due to pump.fun, a meme token launchpad that drew massive user engagement. The blockchain proved its resilience under high transaction loads while maintaining low fees, successfully onboarding retail users and even securing high-profile token launches, including Trump’s token. However, this retail speculation also made Solana a prime venue for value extraction, leading to recent underperformance as the hype cycle cooled.

During the market’s euphoric phase, $HYPE, $SUI, and $S emerged as some of the most reflexive performers, each leveraging a compelling narrative to attract capital inflows. $HYPE, a perpetual DEX, gained traction through a fair launch that rewarded early adopters, fostering a strong whale community that reinforced its price momentum. $SUI, positioned as Solana’s direct competitor, capitalised on its low fees and high transaction speeds, drawing liquidity from those seeking an alternative high-performance blockchain. Meanwhile, $S focused on enhancing the existing Fantom network, introducing higher scalability and faster transactions to position itself as a next-generation infrastructure upgrade. 

AI x Robotics Tokens

Among AI and robotics tokens, $GEOD stands out with strong relative strength, positioning itself as a potential leader in the emerging robotics sector. As the AI sector matures, attention may shift toward robotics as the next evolution of the narrative, giving $GEOD a strategic edge in capturing capital rotation and long-term market positioning.

Initially marketed as the go-to platform for DePIN (Decentralized Physical Infrastructure) projects, $PEAQ struggled to maintain momentum as market attention pivoted elsewhere. Crypto thrives on narratives, and as AI Agents overtook DePIN as the dominant trend, $PEAQ was left behind, ultimately leading to underperformance. Without a clear role in the evolving AI landscape, its relevance has diminished in the current market cycle.

$Virtual and $ai16z emerged as the two frontrunners in the AI agent narrative, each securing dominance on their respective chains. $Virtual, built on Base, positioned itself as the premier AI agent launchpad, integrating a tokenomics-driven flywheel effect that reinforced its growth. Meanwhile, $ai16z, built on Solana, became the leading AI agent framework, setting the standard for open-source agentic development. By adopting a bazaar-style approach to AI development, $ai16z gained traction among projects seeking a decentralized, collaborative ecosystem. Both assets experienced high reflexivity, rallying as the AI narrative strengthened and capital flowed aggressively into the sector.

Dino Tokens

$XRP has emerged as one of the strongest-performing legacy tokens, bolstered by favourable regulatory trends following Trump’s election and Gary Gensler’s resignation. With the SEC taking a more industry-friendly stance, Ripple may see its ongoing legal battle ease, particularly if the agency withdraws its appeal against $XRP’s $125M penalty—a move that would remove a significant overhang on the token.

Many dino tokens rely heavily on strong community backing to maintain price momentum, and $DOT is no exception. Historically, its value has been tied to its dedicated supporter base rather than new innovations or major adoption breakthroughs. As attention shifts toward newer, narrative-driven sectors like AI and memecoins, $DOT may struggle to sustain its current rally. 

Despite underperforming relative to other legacy tokens, IOTA remains focused on long-term adoption rather than speculative hype. Once primarily an IoT-focused blockchain, it has successfully transitioned into a scalable smart contract platform, now supporting dual virtual machines and achieving 50,000 TPS with sub-second finality. Beyond technical improvements, IOTA has made significant strides in regulatory and enterprise adoption. It was a finalist in the European Blockchain Service Infrastructure (EBSI) program, became the first DLT foundation registered with Abu Dhabi Global Market, and is actively working on real-world applications like the Trade Logistics Information Pipeline (TLIP) in Kenya and digital product passports aligned with EU regulations. 

Concluding Thoughts
The idea of fixed four-year crypto cycles may no longer hold true. Instead, we are seeing shorter, more fragmented periods of outperformance, driven by macro shifts, regulatory changes, and fast-moving narratives. In this evolving landscape, staying engaged is more important than ever.

For crypto natives, the lesson is clear—staying informed and adaptable is key to capturing opportunities. Rather than fully logging off during downturns, those who continuously research, track emerging narratives, and recognise when to go risk-on will be best positioned to navigate this new, reflexive market environment.

*Note: This data reflects conditions as from August 5, 2024, following the Bank of Japan’s decision to raise its benchmark rates from 0.1% to 0.25%, increasing the risk of the yen carry trade unwinding.

**Disclosure: Signum Capital holds positions in some of the aforementioned companies. The information provided on this newsletter is for general informational purposes only and does not constitute professional nor investment advice.