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Navigating Narratives
19 Dec 2023

Altcoins in 2023 – Nice uptrend, but “when up-only?”

2023 has been a good year for alts, particularly Q4. However, this is only a fraction of what is possible in a full-blown bull run. NN discusses how our bias has changed on certain narratives, and wrap up the year by putting this uptrend into perspective.
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2023 – Welcome Relief From 2022
Following a brutal 2022 that wiped out many, 2023 was a major comeback year for crypto. In H1, the altcoin market saw the rise of some major narratives that were brewing throughout the bear market. Perhaps most prominently, we saw the rise of GambleFi with Rollbit’s RLB leading the charge, running 100x from the beginning of the year. Despite a big rally in Q1, Total 3 (total crypto market cap excluding BTC and ETH) trended downwards after the initial pop, and it wasn’t until Q4 that alts put on a show with large caps such as SOL making major moves.
TOTAL3 2023
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Navigating Narratives previously discussed two major conditions for “easy mode”:
  1. Loose monetary policy by central banks (primarily the Federal Reserve)
  2. Stablecoin market cap rising
While it had been clear for some time that we had (almost certainly) reached peak interest rates, last week’s FOMC meeting unofficially confirmed to everyone that rate cuts will begin next year. In that article, NN noted that the down-only trend in stablecoin market cap had weakened, and what has stablecoin market cap looked like since then? We see that the down-only trend has reversed. This trend reversal (non-coincidentally) solidified in Q4 when Total3 rallied, as stablecoin market cap rose from $123 billion at the bottom to $129 billion now.
Stablecoin Market Cap 2023
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With this, we get a taste of what is possible for the wider market when the two conditions outlined above are met. It is important to note that Total3 is not a perfect measure, as its composition is ever-changing as more alts are introduced into the market. Translation: the market has pumped, but this is only a minor move in comparison to what is possible in crypto markets. With a major shift in the market this year, particularly in Q4, has Navigating Narratives shifted in any of its biases? Indeed we have, so let’s take it one by one.
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