🇨🇳 China to the Rescue

🌎 This week’s summary:

1. China bringing stimmies back

2. TAO leads the market

3. Polymarket is considering a token

4. Onchain is heating up

📊 Market Overview:

After last week's rally, prices pushed higher. BTC is up 3.1%, while ETH & SOL are up 3.9% and 3.8%, respectively.

Coming out of Token2049, crypto AI led the market, particularly TAO, up 25.8%. Other notable names across various sectors include SHIB +34.1%, Pendle +24.9%, & SEI +29.1%

Now, attention turns to the monthly charts. While September is historically crypto's worst month, at the moment, BTC has retraced last month's correction. Closing above $65K would be a win for bulls.

📰 News Spotlight:

1. China

China is taking multiple stimulus measures to fix a weak economy and banking sector. Highlights include:

• Reduce bank reserve ratio by 50 basis points

• Cut policy rates by 0.2% & Mortgage rates by 0.5%

• $142B direct injection into Chinese banks (1st time since 2008)

This is China’s most significant monetary stimulus since Covid. This comes when the rest of the world is reducing interest rates. It’s hard not to get excited about this news if you’re a crypto investor.

After strict regulations and a weak US retail base, China was supposed to pick up the slack. The problem? Their economy was on the verge of collapse, and the average citizen was totally tapped out. Now, with the Chinese government intervening, global liquidity improving, and coordinated global easing, another domino falls in place for the 2025 bull run.

2. Tao

After a successful Token 2049, Bittensor is up 25.8% this week.

Decentralize-AI is one of my highest conviction narratives. After the governance issues with OpenAI this week, we were reminded of its importance. CTO Mira Murati left OpenAI & Sam Altman changed the companies non-profit status while awarding himself billions in equity.

The public is once again reminded AI is dominated by insiders and they have zero exposure to this revolutionary technology. Crypto will benefit from this, and right now, TAO is the leader. The challenge will be can they deliver on the hype. Most still don’t understand what it does.

What they do have is a cultish community and a passionate group of builders, a key for any successful project. I will be looking to see how their EVM integration goes and if the subnets on TAO (currently 48) can deliver something meaningful.

The chart broke ~$500 resistance convincingly.

3. Polymarket

Polymarket is considering a $50M raise that would include a token. After Opensea fumbled the bag last cycle, this makes sense. Opensea, similar to Polymarket now, had mainstream appeal last cycle and brought new people into crypto.

But after regulatory uncertainty, complacency, & nimble competitors, Opensea saw their valuation take a 90% haircut. Polymarket, which shares a similar cap table to Opensea, won’t light billions of dollars on fire again.

The timing for this is key. I’m skeptical that people will care about prediction markets after the election. 80%+ of their business on any given day is election-related, which ends in 40 days. Not to mention, competitors who are offering incentives and new features are entering the market.

Dropping a token into peak hype would be wise for Polymarket to offset some of this risk. While I have not been very active a mainstream project dropping a token would be a nice airdrop for some. Here’s some math from 0x_antifragile:

Source

🔎 Onchain

Onchain is picking up.

ETH fees, which have been the latest FUD for why ETH is dead, are up - swaps cost $25+, and bridging to L2s costs $9+. At this rate ETH will be ultrasound money again by next week!

“alt L1s” SUI & SEI are up 13.7% and 29.1%, respectively.

More impressive is the TVL growth. MTD numbers:

• SEI: 101.6M → 201.93M

• SUI: 600.69M → 962.08M (420B stablecoins)

Degens are starting to bridge to other chains, and these L1s are seeing noticeable increases in TVL.

And finally, after being proclaimed dead countless times, memes are still pumping. It’s been one of the most potent narratives out of these two week pump in prices. Leaders include PEPE and WIF, up 26.1% and 29.5%.

A new meme based on a hippo, MOODENG, reached $120M in under three weeks.

🤑 Notable Raises

• Celestia - $100M. Sector: Infra. Lead investor is Bain Capital. Notable investors include Placeholder & Robot Ventures.

• Initia - $14M Series A. Sector: Cosmos Infra. Lead investor is Theory. Notable investors include Delphi & HackVC.

• Daylight - $6M Seed. Sector: BTC. Lead investors are USV & 1kx. Notable investors include Framework.

• Meridian - $4M Seed. Sector: Move. Lead investor is ParaFi & Borderless. Notable investors include Amber.

• Octra - $4M Pre-seed. Sector: Infra. Lead Investor is Finality Capital Partners. Notable investor includes Big Brain Holdings.

👊 Quick Hits

• Eigenlayer: Transfer restrictions to be removed on September 30th.

• AAVE: Live on zkSync.

• Aleo: Mainnet live.

• Frankendancer: The early version of Firedancer is live on mainnet.

• Banana Gun: Pledges to refund $3M that was hacked.

• Ordinals: BTC NFTs experience a resurgence after being left for dead.

• TrustToken: Settles with the SEC over fraud allegations.

• Caroline Ellison: Sentenced to two years in prison for her role in the FTX scandal.

🫡 Meme of the week

SBF made a new friend

See you next week,

Mid-Curve Team

The Mid-Curve newsletter is intended purely for educational and informational purposes and should not be construed as financial advice. We encourage all our readers to conduct their own research or seek advice from a certified financial advisor before making any investment decisions. Please note that members of the Mid-Curve team may hold positions in some of the investments discussed in our newsletter.