You are reading the weekly industry hotspot report generated for you by Gate.io AI Lab. Get an overview of the most noteworthy market trends and important events from last week, and receive investment analysis and financial strategies recommendations.

Word count: 6215 words | Reading time 13.7 minutes.

Table of Contents:

1. Market trends
2. Analysis of Funding Situation and Price Fluctuation
3. Hot Topics
4. Main Events
5. Latest Developments in Global Policies and Regulations
6. Investment Analysis

1. Market Trends

1.1. Market Sentiment

This week, the total market capitalization of digital currencies reached $12.5 trillion, with a 3.2% increase compared to the previous period. The trading volume on exchanges also increased by 5.8%, reaching $120 billion. The total market capitalization of Bitcoin reached $540 billion, with a 2.9% increase compared to the previous period. The total market capitalization of Ethereum reached $210 billion, with a 4.1% increase compared to the previous period.

According to the widely followed Fear and Greed Index, market sentiment this week is in the "Neutral" zone with a value of 52, indicating that investors are cautiously optimistic about the market outlook.

Crypto & Tradition Overview as of 11am UTC+8, May 31

1.2. Macroeconomic Impact

The global economic recovery is slowing down, coupled with ongoing geopolitical tensions, these factors have exerted certain pressure on the cryptocurrency market. The U.S. CPI in April increased by 4.9% year-on-year, higher than the expected 4.8%, indicating that inflationary pressure remains.

New car prices fell 0.1% month-on-month, while used car prices rose 4.5% month-on-month. The annualized data for new home starts was 1.34 million households, lower than the expected 1.45 million households. The number of initial jobless claims was 242,000, higher than the expected 230,000.

According to the futures pricing of CME, the market expects a 78.5% probability that the upper limit of the federal funds rate target range in June will be 5.25%-5.5%, which is the highest probability currently.

1.3. Concept Hotspots

Concept coins in the field of artificial intelligence have performed well this week, with WLD, AGIX, and RNDR rising by 18%, 15%, and 12% respectively. In addition, meme coins also saw good gains, with DOGE and SHIB rising by 8% and 6% respectively.

Another hot topic worth paying attention to is the concept of RWA (Real World Asset) tokens. After BlackRock launched the first tokenized fund product, tokens such as TRU, ONDO, and PENDLE have achieved good gains.

2. Analysis of Funding Situation and Price Fluctuation

2.1. Price Fluctuation Analysis

Ether(ETH) has a volatility of 3.21% this week, with a standard deviation of $120.35 in daily closing prices over the past week. ETH price has risen slightly this week, closing at $3,880.72 on a weekly basis, a 2.36% increase from the previous week. The price increase is mainly driven by the favorable development of Ethereum ecosystem, DeFi, NFT, and other applications.

In terms of trading volume, the average daily trading volume of ETH this week is 203 million US dollars, an increase of 14.62% compared to last week. The increase in trading activity reflects an increasing demand for ETH in the market. Looking at the changes in price and trading volume, the market activity of ETH has improved and the price may maintain an upward trend in the short term.

2.2. Fund Analysis

Bitcoin (BTC) saw a significant increase in net inflows this week, with a total of 327 million US dollars. Institutional investors were the main source of net inflows for BTC this week, accounting for 68%. At the same time, retail investors saw a net outflow of 115 million US dollars.

Ethereum (ETH) saw a net inflow of $182 million this week, with a 23.37% rise compared to the previous period. Institutional investors and retail investors contributed $98 million and $93 million respectively, accounting for an equal proportion.

Overall, institutional investors are the main net inflow of funds in the cryptocurrency market this week. Among them, BTC is favored by institutional investors to a greater extent. Retail investors, on the other hand, show a net outflow of funds, but they have a higher preference for ETH than BTC. In terms of fund flows, the cryptocurrency market has become more active, and prices may maintain an upward trend in the short to medium term.

3. Hot topics

AltCoins are pumping like crazy, is the era of "picking up money everywhere" back in the encryption market?

AltCoin hits new highs, TrumpCoin goes crazy

Recently, AltCoins/Meme Coins have triggered a frenzy in the cryptocurrency market. According to reports, Celebrities coins have become a hot topic on CT, and the madness of Meme Coins has escalated once again. The newly emerged Meme Coin $JENNER skyrocketed 160 times overnight, and its development team consists of members of the Kardashian family, with a Twitter following of 33 million.

Female rapper Iggy Azalea also posted a tweet on X platform, saying "Don't let your mom down" and attached the contract address of Meme Coin $MOTHER. $MOTHER then skyrocketed 30 times within 2 minutes. Iggy Azalea even opened a Space to interact with the community, and almost all of the content on her homepage is related to Meme Coin.

The key figure in this celebrity meme coin frenzy is Sahil Arora. In an interview, he revealed that he has been involved in many celebrity projects, "Sometimes I go to them, most of the time they come to me, and then I choose who to collaborate with, which is also the only way to make cryptocurrencies more mainstream and benefit from the attention economy."

New coins are emerging in the market, and the competition is fierce

The craze of celebrity Meme coins has once again ignited the "carnival" atmosphere in the crypto world. Data shows that there are already over 2.5 million cryptocurrency projects in 2024, a growth of 5.7 times compared to the 440,000 in 2021. In just early April 2024, over 540,000 new tokens have been created, averaging 5,300 per day.

"In a sea full of opportunities, investors are eager to achieve high returns." Cryptocurrency analyst 0x_Kun said that as saturation rises, it becomes crucial to screen altcoins. He proposed 5 criteria for finding high-quality projects: grand narrative, expanding user base, strong community, low unit bias, and clear value."

Can the market trend continue?

While the celebrity meme coin craze has brought about a wave of market trends, there is also division within the community. Some believe that this is just a passing fad, and will ultimately come and go swiftly, just like the previous meme coin presale craze. Others are concerned that it will repeat the mistakes of celebrity NFT projects, leaving a bad impression on new entrants.

However, there is also an opinion that even if newcomers are deceived or lose money by following these celebrities, it may be a way for them to understand cryptocurrency and be more careful in the future. "The initial loss may ignite the flame in their hearts," said crypto KOL dubzy.

In general, although the market is rapidly becoming saturated, there are still opportunities for smart and hardworking people. The "carnival" frenzy in the crypto world may continue for some time, and investors need to remain rational and cautious.

4. Major Events

US SEC Approves Ethereum Spot ETF

The US SEC has approved several issuers' applications for Ethereum spot ETFs. This will allow more investors to access encryption assets, potentially boosting ETH demand and consequently increasing token prices. Analysts expect that the net inflow of spot Ethereum ETFs listed in the US will reach approximately 25%-30% of the net inflow of spot Bitcoin ETFs.

Trump declares support for cryptocurrency

Former US President Trump stated at a campaign rally that if elected, he would support the development of the cryptocurrency industry in the United States and oppose the creation of a central bank digital currency. The positive prospects of a well-known political figure have added confidence to the overall bullish sentiment. If Trump's policies are implemented, it will significantly enhance the legitimacy and future growth potential of the crypto market.

Bitcoin Halving Completed

Last Saturday, Bitcoin successfully completed its fourth halving. Some hot projects have pushed up the transaction fees for BTC, temporarily increasing miner income instead of decreasing it. Analysts believe that any positive impact related to the halving may take about 100 days to begin to show after the halving, as the supply shortage caused by the Bitcoin halving will only accumulate over time.

"Thailand to block unauthorized encryption platforms"

The Thai authorities have decided to block "unauthorized" encryption platforms to improve law enforcement efficiency and address online crime issues. The Securities and Exchange Commission of Thailand will submit information on unauthorized digital asset service providers to the Department of Digital Economy and Society to block access to these platforms. This measure aims to strengthen regulation and maintain market order.

Shiba Inu raises 12 million USD to develop new privacy network

Shiba Inu raised $12 million by selling its unreleased token TREAT to non-US investors, which will be used to develop its new privacy-focused third layer blockchain. This new network aims to address privacy and trust issues while complying with regulatory requirements, reflecting Shiba Inu's development direction in the areas of privacy and compliance.

CoinShares: Digital asset investment products saw a net outflow of $206 million last week.

According to CoinShares data, the outflow of digital asset investment products reached a total of $206 million last week, marking the second consecutive week of outflows. The trading volume of ETPs slightly decreased to $18 billion. Among them, Bitcoin saw an outflow of $192 million, while Ethereum had an outflow of $34 million. This reflects investors' short-term cautious sentiment towards encryption assets.

Mina plans to upgrade in Berkeley on June 4th

The Mina lightweight blockchain network is scheduled to undergo the Berkeley upgrade on June 4th, aiming to enhance the ZK programmability of the Mina network. This upgrade will strengthen Mina's technical capabilities and is expected to drive its development in the ZK field.

Ethena Stable Coin Project Receives Funding Support

Recently, I participated in the Ethena stablecoin project, which incentivizes investor behavior to maintain overall yield. Despite the good yield of stablecoins, risks still need to be taken into account. The funding support received by the Ethena project reflects the market's attention to the stablecoin field.

Fetch.AI, SingularityNET, and Ocean Protocol Token Merge

Fetch.AI, SingularityNET, and Ocean Protocol announced the completion of the merger of the Artificial Superintelligence Alliance (ASI) on June 13. The tokens of the three projects will be merged into ASI tokens, reflecting the trend of integration in the field of artificial intelligence.

5. Latest Developments in Global Regulatory Policies

5.1. United States "21st Century Financial Innovation and Technology Act" (FIT21)

• This bill aims to clarify the division of responsibilities in cryptocurrency regulation between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) in the United States. According to the bill, cryptocurrencies with a higher degree of decentralization will be treated as commodities and regulated by the CFTC, while those with a lower degree of decentralization will be treated as securities and regulated by the SEC.
• The bill is expected to resolve the long-standing regulatory power dispute between the SEC and CFTC, bringing a more clear regulatory environment for the cryptocurrency industry. This may facilitate institutional investors' entry into the crypto market and drive industry development. At the same time, it may also lead to compliance challenges for certain crypto projects.

5.2. Hong Kong Cryptocurrency Regulatory Sandbox

• The Securities and Futures Commission (SFC) of Hong Kong has launched an encryption asset regulatory sandbox, allowing approved encryption trading platforms to operate in a regulatory environment and provide services to institutional investors.
• This move aims to attract cryptocurrency businesses to Hong Kong and promote it as a center for crypto assets. This may promote the development of the cryptocurrency ecosystem in Hong Kong and attract more crypto companies and investors to the region. However, it also means that cryptocurrency activities will be subject to stricter regulation.

5.3. EU Encryption Asset Market Act (MiCA)

• The MiCA aims to establish a unified regulatory framework for encryption assets in EU member states, including provisions for stablecoin issuers, encryption exchanges, and wallet providers.
• The bill is expected to bring higher transparency and consumer protection to the EU cryptocurrency market. However, it may also increase compliance costs and pose challenges to some crypto companies. In addition, a unified regulatory framework may attract more institutional investors to enter the EU crypto market.

6. Investment Analysis

6.1. Investment Recommendation

Based on the latest market trends and market information, the bullish sentiment in the market has been driven by favorable news such as the approval of Ethereum spot ETF and Trump's support for cryptocurrencies. Here are 5 recommended cryptocurrencies with growth potential:

Disclaimer: These suggestions are based on current market analysis and are not financial advice. Investment carries risks, please invest with caution.

6.2. Long-term Investment Strategy

For long-term investors, we recommend the Solana ecosystem token SOL listed on the Gate exchange as a long-term investment target. SOL is currently undervalued but has a good fundamental. It is recommended to use the strategy of building a position 48 times, invest in SOL every week until 48 positions are completed. The initial investment amount is 10% of the total investment amount, and the subsequent investment amount is 2.5% of the remaining investment amount.

Risk Warning: The cryptocurrency market is highly volatile, and investment should be cautious. We recommend setting a stop-loss level and closing positions immediately when the price falls by more than 20% to control risks. At the same time, closely follow the project's development updates and adjust strategies promptly.

6.3. Financial wealth management products

Yubibao is a residual currency product launched by Gate.io. Its main features are on-demand deposit and withdrawal and compound interest. Users can customize the minimum lending interest rate, and the system will determine whether the lending is successful and calculate the interest based on the actual borrowing needs. The total amount of USDT financial management in Yubibao is 1.2 billion USDT, with an estimated annual percentage rate of return of 7.33% + 8.87%.

Main financial products of Yu'ebao:

Note:

1. TradFi Financing Rates data is sourced from Bloomberg Terminal.
2. CeFi and DeFi Financing Rates data are sourced from mainstream cryptocurrency exchanges and lending platforms.
3. The above data is for reference only and does not constitute investment advice. The cryptocurrency market is highly volatile, so investment should be approached with caution.

Disclaimer: The information contained in this report is believed to be reliable, but the company does not guarantee its accuracy or completeness, nor is it responsible for any direct or indirect losses that may arise from the use of this information. The views, estimates, and other information contained in this report are the company's judgment at the time of its initial public release and are subject to change without notice. Past performance is not indicative of future results.

6.4. Risk Management Strategy

1. Set Stop Loss: It is recommended for clients to set reasonable stop loss points for each asset to limit potential losses. Stop loss points can be adjusted based on individual risk preferences and asset volatility.
2. Diversification Strategy: Do not concentrate all funds in a single asset, but instead diversify investments in different types of assets such as cryptocurrencies, stocks, bonds, etc., to reduce overall risk.
3. Regular Evaluation and Adjustment: It is recommended that clients regularly (such as quarterly or semi-annually) evaluate the performance of asset allocation and make necessary adjustments based on market changes and emerging investment opportunities to maintain the balance and potential returns of the investment portfolio.