Market
VCs Hold 1,100% Gains on These Altcoins, But for How Long?
Venture capitalists have been reaping massive gains on a select group of altcoins. However, recent indicators suggest that these investors may be considering selling their holdings soon.
This outlook highlights the need for cautious optimism among token holders. While decisions to hold or sell the altcoins can significantly impact the overall profitability of these VCs, the ripple effect will likely extend to the other investors.
High Dump Pressure: VCs May Sell Altcoins with 1,100% Gains
Ethereum Name Service (ENA), Renzo (REZ), Ondo Finance (ONDO), Dymension (DYM), Saga (SAGA), and Celestia (TIA) token holders could be treading on dangerous ground. The data platform Dune Analytics shows that VCs are sitting at 1,100% unrealized profit on these altcoins, creating high dump pressure.
A high dump pressure indicates strong selling sentiment in the market or perceived risks associated with altcoins. This could result in losses for token holders as the VCs reassess their investment strategies and consider rebalancing portfolios.
“There are better ways to make money in this market than to wait for the inevitable dump from high FDV/Low Market cap Tokens,” crypto researcher Emperor Osmo warned.
Specifically, as dump pressure weighs heavy, they could diversify into other assets, adjust their risk exposure, or implement hedging. These strategies, which would protect them against market downturns, could affect token holders who are not forward-looking.
Read more: Best Crypto To Buy Now: Top Coins To Keep an Eye on in July 2024
BeInCrypto contacted Hitesh Malviya, the founder of on-chain analysis platform DYOR, to discuss the varying risk levels of VC-backed tokens. When asked about tokens with the highest risk of a VC sell-off, Malviya pointed to AltLayer and Connext. On the other hand, he considers zkSync and LayerZero to be at a lower risk spectrum, suggesting these tokens have a more stable investment base.
As an example of a token that experienced heavy VC investments and suffered significantly after a sell-off, Malviya cites Dimo. Despite substantial backing, Dimo remains underwater following the VC sell-off, serving as a cautionary tale in the volatile crypto market.
Venture Capitalists Flock to 2024 Hot Narratives
A close look at the altcoins shows that they participated in some of the hottest narratives in 2024. Among them, ONDO was central the Real World Assets (RWA) narrative, with Congress gathering for tokenization talks. This year, the sector has gained mainstream attention. Crypto-focused companies, global bankers, and asset managers like BlackRock are leading this interest.
Ethereum Name Service has also been a hot topic in 2024. The protocol allows humans to use easy-to-remember domain names for their cryptocurrency addresses. As the future of Web3 takes center stage, ENS, built using Ethereum’s smart contracts, has recorded growing adoption. In tandem, open interest for the token rose to multi-year highs on Monday.
For REZ, a liquid staking token, interest in the Renzo protocol surged after crypto exchange Binance added it to Launchpool program. The staking narrative also played a part in Celestia, with TIA token price reacting to top crypto exchanges enabling token staking.
Read more: Which Are the Best Altcoins To Invest in July 2024?
On the other hand, SAGA, a GameFi Layer 1 blockchain token, came to the limelight with tailwinds from an airdrop campaign involving partnerships with over 100 projects.
Infrastructure firms attracting the most early-stage investments during hot sector seasons make sense. As the hype around these narratives eases, and with new themes coming up, VCs may identify new interesting projects to
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Market
Polymarket Faces Ban in France as US Election Betting Ends
According to a report from The Big Whale, the National Gaming Authority (ANJ), France’s gambling regulator, is preparing to block the prediction markets platform Polymarket.
Polymarket, the decentralized platform that allows users to bet on the outcome of political events, sports, and other occurrences using cryptocurrency, has gained popularity in recent months, especially with bets surrounding the US presidential election. More than $3.2 billion was reportedly wagered on the platform during this high-stakes period, with a record-breaking $294 million in volume on November 5 alone.
France Users May No Longer Access Polymarket
According to The Big Whale, a French website that covers the crypto industry, the ANJ’s impending ban comes after a French trader placed a $30 million bet on a Trump victory, reportedly attracting the regulator’s scrutiny.
The trader’s wager positioned him to make approximately $19 million in profits, a sum that has intensified concerns over Polymarket’s compliance with French gambling laws. A source close to the ANJ stated that despite Polymarket’s use of blockchain and cryptocurrency, its activities are akin to gambling, making it subject to restrictions under French law.
“We are aware of this site and we are currently examining its operation as well as its compliance with French gambling legislation,” The Big Whale reported, citing an ANJ spokesperson.
Read more: What is Polymarket? A Guide to The Popular Prediction Market
Legal expert William O’Rorke from ORWL Avocats explained that although Polymarket does not specifically target French users, its activities fall squarely under gambling regulations.
“Polymarket involves betting money on uncertain outcomes, which aligns with the legal definition of gambling,” O’Rorke noted.
Against this backdrop, the ANJ is well within its mandate to block the platform’s access in France. Accordingly, the French regulator may enforce the ban by blocking Polymarket’s domain name in France. It amy also pressure third-party players, like media outlets and online directories, to limit access to Polymarket links.
However, French users may still circumvent this by using virtual private networks (VPNs). This is because Polymarket’s crypto-based infrastructure allows for relatively anonymous participation.
France’s looming ban is not the first regulatory roadblock Polymarket has encountered. In 2022, the US Commodity Futures Trading Commission (CFTC) fined Polymarket $1.4 million for failing to register as a designated contract market. The CFTC also challenged Kalshi’s operations due to questions about betting on political events.
Polymarket’s Fate After US Elections
Meanwhile, the US election was a significant catalyst for Polymarket. It drove the platform to new heights in user engagement and bet volume. Polymarket’s election-related markets have been featured on major financial platforms, including Bloomberg, highlighting the platform’s appeal to mainstream finance.
As BeInCrypto reported, Polymarket’s election betting topped $3 billion, reflecting unprecedented participation. The platform, however, faces a crossroads in its path forward. Following the climax of the US election on Wednesday, data from Dune Analytics shows a steep decline in Polymarket’s activity.
Daily active addresses and transaction volumes, which soared in the election lead-up, have notably dwindled as election-related betting winds down. For instance, Polymarket’s open interest, a key indicator of active betting engagement, dropped from $350 million to $268 million after the polls closed. Similarly, monthly new accounts have also dropped by over 41% between October and November.
Against this backdrop, Polymarket may need to diversify its market offerings or potentially embrace a new model to maintain user interest. This is considering election-related activity comprised the majority of the prediction market’s volume.
Rumors are circulating about a potential move toward a decentralized governance token, which could distribute control over Polymarket’s operations to its community. This shift would reduce the liability of the central authority by decentralizing decision-making, though it remains theoretical, with no clear timeline.
Read More: How To Use Polymarket In The United States: Step-by-Step Guide
Polymarket’s fast ascent and regulatory challenges highlight broader industry tensions between innovation and compliance. With election predictions no longer a draw and an impending ban in France, Polymarket’s future remains uncertain.
Its long-term viability may depend on how well it adapts to evolving regulatory landscapes and whether it can maintain popularity beyond election season peaks.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Market
XRP Price Ready to Rally? Signs Point to a Bullish Move
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Market
Solana (SOL) Rallies Strongly, Setting Sights on $200
Solana started a fresh increase above the $172 support zone. SOL price is rising and might soon aim for a move toward the $200 level.
- SOL price started a fresh increase after it settled above the $165 level against the US Dollar.
- The price is now trading above $172 and the 100-hourly simple moving average.
- There was a break above a key bearish trend line with resistance at $162 on the hourly chart of the SOL/USD pair (data source from Kraken).
- The pair could continue to rise if it clears the $192 resistance zone.
Solana Price Starts Fresh Rally
Solana price formed a support base and started a fresh increase above the $162 level like Bitcoin and Ethereum. There was a strong move above the $165 and $172 resistance levels.
There was a break above a key bearish trend line with resistance at $162 on the hourly chart of the SOL/USD pair. The price even cleared the $185 level. A high is formed at $192 and the price is now consolidating gains. It is trading above the 23.6% Fib retracement level of the upward move from the $155 swing low to the $192 high.
Solana is now trading above $172 and the 100-hourly simple moving average. On the upside, the price is facing resistance near the $192 level. The next major resistance is near the $195 level.
The main resistance could be $200. A successful close above the $200 resistance level could set the pace for another steady increase. The next key resistance is $212. Any more gains might send the price toward the $220 level.
Another Dip in SOL?
If SOL fails to rise above the $192 resistance, it could start a downside correction. Initial support on the downside is near the $188 level. The first major support is near the $180 level.
A break below the $180 level might send the price toward the $172 zone or the 50% Fib retracement level of the upward move from the $155 swing low to the $192 high. If there is a close below the $172 support, the price could decline toward the $165 support in the near term.
Technical Indicators
Hourly MACD – The MACD for SOL/USD is gaining pace in the bullish zone.
Hourly Hours RSI (Relative Strength Index) – The RSI for SOL/USD is above the 50 level.
Major Support Levels – $188 and $185.
Major Resistance Levels – $192 and $200.
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