Crypto Market Recap: November 2024

Price Performance

November was exceptionally bullish for the crypto market, with notable price increases and growing hype around crypto following Donald Trump’s election victory. His win had a positive impact not only on the crypto sector but also on the broader market, with the S&P 500 surging by an impressive 5.7%, marking its best performance month in 2024. The cryptocurrency market demonstrated even more remarkable growth, significantly outperforming the stock market during this period. 

Price predictions from investment funds now appear more realistic than ever. The current market sentiment, combined with favorable macroeconomic conditions—such as declining inflation and a rising stock market—creates a supportive environment for cryptocurrency, particularly Bitcoin. As the flagship cryptocurrency, Bitcoin remains the focal point of discussions about crypto among major corporations and governments.

While major entities focus on Bitcoin, retail investors are gravitating toward trading memecoins. Memecoins, unburdened by venture capital, offer the potential for substantial returns, reflecting the speculative, high-risk, high-reward nature of the crypto community. Another factor behind the strong performance of memecoins is the absence of new, compelling narratives around fundamental projects—such as revolutionizing the financial system or "killing Ethereum." Today's projects appear more grounded in their rhetoric, lacking the grandiose visions that previously captivated the market.

Influence of Trump Victory on Crypto Market

Bitcoin’s significant growth during every U.S. presidential election is an intriguing pattern. In 2016 and 2020, this may have been correlated with Bitcoin's halving cycles. However, this time, the election itself might be the primary catalyst for Bitcoin’s surge in November and the months ahead. Trump’s actions, beyond just rhetoric, suggest a more crypto-friendly policy stance. There are even claims that Trump views Bitcoin’s price as an economic health indicator, akin to the S&P 500 or Dow Jones indexes. For the first time, Bitcoin and crypto appear to have gained recognition at the highest political level, fueling optimism and market growth. 

Interestingly, a fascinating dynamic is playing out with retail investors’ perceptions. In hindsight, many will likely say: “It was obvious! The market rallied after Trump’s election victory.”

However, for those closely following U.S. politics, the Republican victory (even before Trump’s nomination) and Trump’s eventual win seemed quite plausible. This likely wasn’t a surprise to figures like Elon Musk, who made a bold, high-stakes show of support for Trump. Yet the market is reacting as though this outcome wasn’t priced in at all. So, what’s really happening?

Reflexivity Theory In Action 

As paradoxical as it may seem, the market is rallying simply because it has decided to rally—a phenomenon known as market reflexivity.

The theory of reflexivity, proposed by George Soros, suggests that markets don’t just reflect reality but actively influence it. It creates a feedback loop: market participants’ perceptions drive prices, and those prices, in turn, shape perceptions. This self-reinforcing cycle might explain the current surge, highlighting the complex interplay between sentiment and action in financial markets.

Here's how it works:

1️⃣ Perception of Trump’s Victory: The market interprets Trump’s win as a positive signal, even though this outcome might have been predictable. His early appointments further reinforce this optimism.

2️⃣ Market Maker Activity: Market makers begin actively pumping specific tokens, generating excitement and drawing in additional participants.

3️⃣ Retail Investor Participation: Retail investors notice the market rally and start participating, adding liquidity and amplifying the upward trend.

4️⃣ Confidence Loop: As prices rise, participants gain confidence, creating a "self-fulfilling prophecy" effect that sustains the growth.

🔄 The Reflexivity Effect: This growth may not be rooted in fundamental changes but in the collective belief that "the market is rising and will keep rising." However, reflexivity has a downside—it can lead to irrational euphoria or panic. Markets often overestimate or underestimate reality, paving the way for bubbles or crashes.

Strategy For The Current Market Conditions

If you haven't entered positions yet, now may not be the best time, as the current risk/reward ratio on medium-term timeframes might be unfavorable.

At the same time, opening shorts might be too early. Markets can remain irrational longer than one can remain solvent, making short positions risky in the current environment.

In our opinion, the most prudent approach now is pair trading. This involves selecting two assets and opening a long position on one while simultaneously opening a short position on the other. For example, you might go long on $ETH and short on $XRP. It’s crucial to execute these trades without leverage and focus on fundamentals—shorting overvalued assets relative to undervalued ones.

Potentially overvalued tokens:

$XRP, $TRX, $ADA, $XLM...

Potentially undervalued tokens:

$ETH, $UNI, $ARB, $ATOM…

Blockchain Metrics

Although Solana is no longer frequently touted as an "Ethereum killer," it is outperforming Ethereum in several key blockchain metrics. Recently, Solana surpassed Ethereum in another significant area: DEX trading volume. This achievement is largely attributed to the memecoin boom on the Solana blockchain, which has driven increased activity and liquidity.

The surge in trading volume also boosted chain revenue, enabling Solana to reach $100 million in revenue in November. Such raises in fundamental metrics may support further Solana price growth. 

Currently, Ethereum, Solana, and TRON collectively account for over 90% of total blockchain revenue.

Notably, each of these three blockchains has successfully carved out its niche:

• Ethereum: The primary hub for DeFi applications, boasting the largest TVL in the ecosystem.

• Solana: The leading blockchain for DEX trading volume, with its speed and low transaction costs making it ideal for trading.

• TRON: Known for lower gas fees compared to Ethereum and greater reliability than Solana, TRON has established itself as the dominant chain for USDT transactions.

The price rally had a positive impact across nearly all blockchains. Notably, Bitcoin has entered the top five chains by TVL, surpassing networks like Base, Arbitrum, Avalanche, and Aptos. With the continued development of the Bitcoin ecosystem, this trend is likely to persist.

At CryptoRank, we identified the potential of the Bitcoin ecosystem over a year ago, and we are pleased to see how significantly it has progressed since then.

Hyperliquid - airdrop of the year

In addition to the price rally, Hyperliquid delighted the crypto community with a generous airdrop, allocating 31% of its total supply. According to our data, this ranks among the most generous airdrops in crypto history.

Hyperliquid airdrop statistics:

Total number of wallets = 94 thousand

Average drop = 2915 tokens (~$14,500)

Median drop = 64.5 tokens (~$322)

The price dynamics of the $HYPE token after the airdrop turned out to be very bullish, even with the large number of airdrop recipients. This may suggest that community support and the hype around a project are valuable factors positively affecting its price. Such realizations could encourage other projects to adopt a more community-friendly airdrop strategy.

It’s worth noting that Hyperliquid has no VC backing, which may also positively impact its price and allows for interesting comparisons with the upward price dynamics of memecoins, which typically also lack VC backing.

Hyperliquid has also emerged as a leader among newly launched tokens, followed closely by Peanut the Squirrel—a memecoin dedicated to a squirrel euthanized on the eve of the presidential elections by Democratic authorities. This event caused shock and outrage among people, who began to blame the authorities and endorse Trump.

The dominance of Hyperliquid and other memecoins among newly launched tokens by market cap suggests that the community now views VCs not as supporters of crypto but as competitors with unfair advantages.

Projects Performance

In November, Avalon USDa emerged as the leader in TVL growth, followed closely by Synthetix V3, SpringSui, and Abacus.

Polymarket, which was one of the most popular and widely discussed crypto dapps leading up to the election, is now experiencing a significant TVL outflow. Most of the betting volume was concentrated around the election, and even hints of a potential airdrop haven’t prevented this decline. This is not the first time Polymarket has faced such a scenario—it’s a typical cycle of heightened interest in betting platforms during election periods.

Conclusion

November marked the best month for crypto this year, driven by a significant price rally following Donald Trump’s election win, signaling the beginning of a pro-crypto era. However, it’s important to note that we may be at the peak of prices, and investors should exercise caution and consider hedging their positions. Memecoins continue to dominate as the preferred token category, with investors seeking fortunes through high-risk, high-reward strategies. Hyperliquid’s generous airdrop—one of the most substantial in the history of airdrop campaigns—offers hope that other projects may rethink their airdrop strategies to be more community-focused.