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Tokenized, Inc: BlackRock's Plan To Own The Fractionalized World
February 06, 2024
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Just one day after the January 11 approval of 11 Bitcoin spot ETFs – including BlackRock’s iShares Bitcoin Trust (IBIT) – by the U.S. Securities and Exchange Commission, BlackRock Chair and CEO Larry Fink sat down with Bloomberg's David Westin to discuss the implications of the world's largest asset manager entering the Bitcoin market. Not one to mince words, Fink articulated a clear framework for his company's approach to Bitcoin, and furthermore for BlackRock's intention to replicate similar ETF products for other assets. “If we can 'ETF' a Bitcoin, imagine what we can do with all financial instruments.” Fink continued, speaking about Bitcoin itself, stating “I don’t believe it’s ever going to be a currency. I believe it’s an asset class.”

Bitcoin: Commodity, Not Currency

While the BlackRock Chair was not shy about expressing other aspects of the potential build of tokenized, digital markets, these two statements in particular illuminate the coveted path forward for how the biggest institutions intend to carefully integrate Bitcoin into the legacy financial system. Fink even went so far as to turn the abbreviated noun “ETF," an exchange-traded fund, into a verb, gloating about transmuting the Bitcoin protocol into just another speculative commodity – all the efforts of miners and nodes across the world to decentralize trust in issuance and settlement reduced to a paper offering by their iShares division.

 

The biggest players in the United States dollar system are all but clamoring over each other to offer such products to their retail customers, understanding that this axiom neuters Bitcoin as a viable currency capable of competing with the day-to day bargaining and settlement utility of the dollar. There are many reasons to believe the US dollar system has much to gain from a dollar-denominated appreciation of bitcoin, but significantly less so if the protocol itself is capable of serving the everyday transactional needs of billions across the globe. One of the most common rebuttals to the claim that bitcoin cannot scale to become a functioning currency is the Lightning Network. While the trustless method of shared unspent transaction outputs (UTXOs) via hashed time locked contracts (HTLCs) payment channels is quite novel, the ultimate endgame for such a model servicing billions necessitates a large amount of liquidity (in bitcoin terms) locked up within the network. A centralized Lightning Network brings about many issues of privacy, transactional censorship, and even user access restrictions, not to mention the mathematical realities of demand for Bitcoin's limited blockspace when opening a billion channels.

Many FinTech companies, such as Lightning Labs and Blockstream, have spent millions in capital developing methods for utilizing Bitcoin as a way to issue tokenized assets, such as stablecoins like Tether's USDT, in order to transact dollar-denominated tokens via Lightning channels or federated sidechains. While the institutional adoption dreamed of by early Bitcoin adopters has certainly come to fruition, the actualization and methods of these institutions is clear: bitcoin must remain an asset, and all effort on scaling it as a currency should be directed towards the dollar. Fink himself in the same Bloomberg interview stated “We believe ETFs are a technology no different than Bitcoin was a technology for asset storage.” Bitcoin Spot ETF products encourage many practices far outside the norm of the typical Bitcoin user within the near decade and a half of its existence; e.g. trusting a custodian with your keys, limiting exchange to US business days and hours, and aggregating individual exposure into a collective paper claim managed and surveilled by highly-regulated brokers.

The anti-State revolution that has dominated most Bitcoin discourse since 2009 has become colored by red, white, and blue ticker tape. Furthering the idea that the US has much to gain from the adoption and co-option of Bitcoin is the tangible stash of coins distributed within its borders; MicroStrategy's 189,150 bitcoin, the 215,000 bitcoin seized by the Department of Justice, Block.one's 164,000, Grayscale's 487,000 in GBTC, and now the new US spot ETF offerings hold a combined 170,174 bitcoin as of 1/31. This is inarguably a meaningful portion of the circulating supply of bitcoin, not to mention the likely possibility of further treasuries held off the books by American investors. Bitcoin is already making US ETF inflow history, as the combined growth within the first two weeks has already outpaced the decades-long entirety of the silver spot ETF market. Any liquidity needed for an institutional Lightning Network that could compete with legacy payment providers such as Visa or MasterCard is already safely nestled within the borders of the United States, and thus well-within reach of the regulatory arms of the DoJ, SEC, Treasury, and Federal Reserve.

Within the S-1 Registration Statement filing for the iShares' Bitcoin Trust (IBIT) application is a clause that states:

While this may appear as simply due diligence for a securities offering, there is recent precedent of an iShares product being liquidated after pressure from the SEC due to geopolitical advancements, specifically the Russian invasion of Ukraine. In a press release from that same day, the iShares MSCI Russia ETF (ERUS) announced the suspension of “right of redemption of fund shares pursuant to an exemptive order issued by the [SEC]”, effective August 3, 2022, in order to “permit the fund to liquidate its portfolio.” Two weeks after the announcement, the press release stated that “BlackRock will begin liquidating ERUS by distributing its current liquid assets to shareholders,” after removing the estimated fees associated with the liquidation and transactions. Russian forces’ incursion into Ukraine triggered capital controls and sanctions from the consortium of related regulatory arms of the US government, which in turn restricted BlackRock – and all non-Russian investors – from participating in the Russian securities market. The final clause of the press release communicates that due to the unknown circumstances, “there can be no assurance that shareholders would receive any liquidating distribution relating to the Russian securities and depositary receipts after the initial distribution.”

One does not have to look too far back into recent history to see the last time the United States found itself face to face with its own geopolitical crisis during the COVID-19-induced lockdown and stimulus spearheaded by the Trump administration. BlackRock was chosen by the Federal Reserve during the third week of March 2020 to manage three debt buying programs, not to mention Canada’s central bank hiring Fink's firm to advise commercial paper purchases, nor the contract they were given by the European Union banking system to aid in sustainability. “People like Larry Fink we’re talking to, that’s BlackRock – we have the smartest people, and they all want to do it,” Trump told reporters during a White House press appearance in which he announced the largest stimulus package in the country's history – a $2 trillion bill.

Before entering the White House, Fink had helped manage Trump's finances, and after a 2017 meeting with his administration, made note of his previous relationship by stating “In every meeting we had, he talked about doing more...I didn’t think 'doing more' meant [being] the president.” It was no surprise then that just three years later, Trump would be employing Fink once again to manage the stimulus distribution programs alongside former majority BlackRock shareholder, Bank of America. “I do believe it's going to continue to bring opportunities for us,” Fink stated during a 2020 earnings call, referring to government assignments. As if predicting the coming profiteering off the unprecedented government lockdowns, in a 2011 interview with Bloomberg, Fink went so far as to say “Markets don't like uncertainty. Markets like, actually, totalitarian governments... Democracies are very messy.”

BlackRock and Fink's habit of aiding the government during moments of crisis started long before 2020, however, with the asset manager also playing a large role in the aftermath of the 2008 Great Financial Crisis. The 2008 crash significantly influenced a shift in financial markets, with investors increasingly embracing ETFs. Having held only $531 billion in 2008, according to data from Bloomberg, these funds now hold approximately $4 trillion in the US – a substantial and consequential increase.

BlackRock's ascent to prominence owes much to its strategic embrace of ETFs. Originally focused on bonds, the firm managed assets worth about $1.3 trillion at the end of 2008. BlackRock's pivotal move into ETFs came with its acquisition of Barclays Global Investors in 2009, which followed Barclays' decision to sell only after opting out of UK government bailout assistance. It was in this merger that BlackRock purchased the iShares brand from Barclays. The New York-based BlackRock paid $13.5 billion to the London-based Barclays, and by the time the deal closed at the start of December 2009, BlackRock had doubled its assets under management from $1.44 trillion to $3.29 trillion. This made BlackRock the world's biggest money manager – a crown it still wears. Presently, BlackRock also holds the distinction of being the world's largest global issuer of ETFs.

BlackRock's involvement in government advisory services solidified critical partnerships in the aftermath of the 2008 crisis. The company secured mandates to manage portfolios laden with toxic assets from entities like Bear Stearns, American International Group Inc., Freddie Mac, Morgan Stanley, and others, leveraging CEO Fink's expertise in structuring mortgage-backed securities, a field which he had helped pioneer.

As Fink stated in 2020:

Fink had started his career at a trading desk at First Boston in 1976, and was quickly made head of a division in the then-unknown mortgage-backed securities market, which is estimated to have eventually added $1 billion to the firm's books. He was also instrumental in the $4.6 billion securitization of GMAC auto loans at the start of 1986 and became the youngest member of its management committee at 31 when he was made managing director. After getting caught on the wrong end of then-Fed Chair Paul Volcker's unprecedented interest rate manipulation in the late 1980s, his desk lost $100 million in the second quarter of 1986. First Boston made it clear that when Fink finally left the firm in 1988, he had been fired.

Despite his difficult exit from First Boston, over the next two decades Fink's new firm BlackRock would become an integral figure within the public-private merger of the US dollar system. For example, in the summer of 2011, then-US Treasury secretary Tim Geithner was negotiating the raise of the debt-ceiling. After an agreement was made on the last day of July, Fink was the second number dialed from Geithner's office, only behind then-Fed Chair Ben Bernanke. The Treasury secretary also made calls that day to Lloyd Blankfein, then-CEO of Goldman Sachs, and J.P. Morgan's Jamie Dimon. According to reports, Geithner had called Fink “at least 49” times during the previous 18 months – a testament to BlackRock's political influence.

Much like it positioned itself close to regulators and governments during 2008 and 2020 to maximize profiteering within the private sector during a global economic crisis, BlackRock todayfinds itself cozied up to the public sector as the country deals with the downstream effects of the largest stimulus packages in history, and the US dollar system readies itself to embrace bitcoin in a meaningful way.

Many of the popular arguments for why bitcoin is a better store of value than gold or other precious metals are predicated on the idea that the underlying price discovery within their markets reject fractionalized gamification and tokenized re-hypothecation due to the ever-auditable nature of Bitcoin's blockchain. The practice of “papering” gold is but the antiquated mechanic of the coming tokenized world. "We have the technology to tokenize today," Fink told CNBC. "If you had a tokenized security... the moment you buy or sell an instrument, it's known it’s on a general ledger that is all created together.” Market makers such as BlackRock entering the Bitcoin space are relying on Number Go Up-induced amnesia of their lengthy forays into asset manipulation, alongside a false understanding of blockchain's technology ability to limit fraud. Fink finishes his handwaving by outright stating: “This eliminates all corruption, having a tokenized system."

Corrupting The Ledger: Market Manipulators

At the end of 2023 on December 23, just two weeks before the Bitcoin Spot ETFs were approved, BlackRock named American banking titan J.P. Morgan, alongside Jane Street Capital, as “their authorized participants” in filing with the SEC. At the time, this made BlackRock the first Bitcoin Spot ETF applicant to select who would be responsible for acquiring the necessary bitcoin, in this case on behalf of the iShares issuance. This was seen as a surprising move due to J.P. Morgan Chase CEO Jamie Dimon's recent negative comments on Bitcoin. “I’ve always been deeply opposed to crypto, bitcoin, etc.,” the Board of Directors member for the Federal Reserve Bank of New York said during a Senate Banking Committee hearing last December. “The only true use case for it is criminals, drug traffickers...money laundering, [and] tax avoidance.” He later added, “If I was the government, I’d close it down.”

Despite the public rhetoric from Dimon, J.P. Morgan debuted the Tokenized Collateral Network, or TCN, in October 2023, as the largest US bank by assets facilitated a transfer of tokenized money market funds from BlackRock to Barclays for collateral within an over-the-counter (OTC) derivatives trade. A few years prior to their ventures in blockchain settlement and Bitcoin ETF participation, J.P. Morgan won the rights to manage over a $1 trillion in assets for BlackRock, taking the business from State Street Corp in a deal struck in January 2017, firmly placing J.P. Morgan behind only BNY Mellon for total assets under custody. Later on, in 2021, BlackRock announced further diversification from custodian State Street with partnerships with BNY Mellon and Citigroup to custody assets from their iShares division. BlackRock said Citigroup will handle around “40% of the funds” while J.P. Morgan takes 30% and “BNY Mellon and State Street each take 15%.”

While Fink may believe that somehow blockchain technology will supplant corruption in financial markets, he routinely finds himself paired with the notorious criminal banking enterprise led by Dimon. After a three-week trial at the end of Summer 2022, Michael Nowak and Gregg Smith – the former head of the J.P. Morgan's precious-metals business and lead gold trader – were convicted on fraud, manipulation, and spoofing charges by a federal jury in Chicago. The US Justice Department alleged “the precious-metals business at J.P. Morgan was run as a criminal enterprise” in their biggest ever case of financial fraud. During closing arguments, head prosecutor Avi Perry stated that “they had the power to move the market, the power to manipulate the worldwide price of gold.”

In a September 2020 release from the Commodity Futures Trading Commission, the CFTC stated that:

The order also found that J.P. Morgan Securities, a “registered futures commission merchant” had “failed to identify, investigate, and stop the misconduct.” Despite “numerous red flags, including internal surveillance alerts, inquiries from CME and the CFTC,” and even with an employee alleging misconduct, JPMS “failed to provide supervision to its employees sufficient to enable JPMS to identify, adequately investigate, and put a stop to the misconduct.” The CFTC order also notes that at the start of investigation, J.P. Morgan “responded to certain information requests in a manner that resulted in the Division being misled.”

J.P Morgan was forced to pay nearly $1 billion to settle allegations of fraud within the precious metals and Treasury markets, with the final $920 million tally being by far the largest fine by a financial institution caught manipulating markets since BlackRock shareholder Bank of America's nearly $17 billion dollar fine for its role in the financial crisis of 2008. "At almost $17 billion, today's agreement with Bank of America stands as the largest the department has ever made with a single entity in American history," stated then-Associate Attorney General Tony West.

Then-Attorney General Eric Holder and West disclosed on August 21, 2014 that the Department of Justice had finalized a $16.65 billion settlement with Bank of America Corporation – the most substantial civil settlement with a single entity in American history — to address federal and state claims against BofA and its past and present subsidiaries, including Countrywide Financial Corporation and Merrill Lynch. As part of this resolution, the bank committed to a $5 billion penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) – the most significant FIRREA penalty ever – and pledged billions of dollars in relief to distressed homeowners. The Justice Department and the bank resolved several ongoing civil investigations related to the “packaging, marketing, sale, arrangement, structuring and issuance” of residential mortgage-backed securities (RMBS), collateralized debt obligations (CDOs), and the bank's practices regarding the underwriting and origination of mortgage loans. The settlement incorporated a statement of facts, in which the bank acknowledged selling billions of dollars of RMBS without disclosing key facts about the quality of the securitized loans to investors. The bank also admitted to originating risky mortgage loans and providing misleading information about the quality of those loans to Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA).

As for BlackRock itself, the SEC fined the firm $2.5 million in October 2023 for "failing to accurately describe investments,” in additional to $12.5 million in April 2015 for “failing to disclose a conflict of interest of a portfolio manager who ran another business,” as well as $340,000 “to settle charges that it improperly used separation agreements in which exiting employees were forced to waive their ability to obtain whistleblower awards.” Outside of the US, The Financial Services Authority of the UK fined BlackRock nearly £10 million in September 2012, the second-largest fine levied by the FSA – £33 million paid by J.P. Morgan for the same charge – for “failing to protect client money.”

BlackRock and its partners have been a part of some of the largest financial crimes in US history, not to mention the sudden liquidation of iShares' ERUS due to pressure from the SEC after certain geopolitical developments. Fink wants you to believe the tokenization of real world assets via the blockchain will eliminate corruption – the very corruption his company and affiliates have been demonstrating is entirely possible in supposedly highly-regulated markets for decades.

Within the announcement for J.P. Morgan's Tokenized Collateral Network, Tom McGrath, the Deputy Global Chief Operating Officer of Cash Management at BlackRock stated “Money market funds play an important role in providing liquidity to investors in times of high market volatility. The tokenization of money market fund shares as collateral in clearing and margining transactions would dramatically reduce the operational friction in meeting margin calls when segments of the market face acute margin pressures.” Fink's firm was exceptionally well-positioned to take advantage of the “high market volatility” and “acute margin pressures” of both 2008 and 2020. It appears that is no different today.

As BlackRock dramatically shifts from shying away from Bitcoin due to projected ESG-related concerns downstream of its energy usage, and pivots into a full-on embrace of blockchain as a foundation of the future financial market it intends to dominate, a walk through Fink's recent dealings in “green finance” remind us not to follow the rhetoric spewed, but rather the flow of the greenbacks themselves.

 

Continued ...

 

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Pyth Network (PYTH) To Rally Higher? This Emerging Fractal Setup Saying Yes!

The cryptocurrency market is undergoing a healthy cooldown as Ethereum (ETH) eases to $4,440 from its recent peak of $4,780. The pullback has weighed on most major altcoins — including Pyth Network (PYTH) — which is down about 5% over the past week.

But while the short-term dip might look discouraging, PYTH’s chart is showing something far more interesting: a price structure that mirrors the exact same bullish breakout pattern that sent Skale (SKL) soaring by triple digits earlier this month.

PYTH Mirrors SKL’s Breakout Structure

A glance at SKL’s daily chart reveals a textbook falling wedge formation — a well-known bullish reversal pattern. Once SKL broke above the wedge and printed a higher high followed by a higher low, it flipped both the 200-day and 100-day moving averages into firm support. That technical shift triggered a 148% rally in just days.

PYTH appears to be tracing the same path.

Like SKL, PYTH has already broken out from its falling wedge and formed a higher high and higher low. It is now consolidating just beneath a critical confluence of resistance, with the 100-day MA at $0.1235 and the 200-day MA at $0.1481 — a setup eerily similar to SKL’s pre-breakout structure.

What’s Next for PYTH?

For the bullish fractal to fully play out, PYTH will need to close decisively above the $0.1235–$0.1481 zone, ideally on rising volume. A confirmed breakout could open the door to the first upside target of $0.21, representing roughly 78% potential gains from current levels.

However, confirmation is key. Until PYTH clears these moving average hurdles, it remains vulnerable to extended consolidation or even a false breakout. Still, the fractal similarity to SKL is hard to overlook — and if history repeats, PYTH bulls could be on the verge of a major move.

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Deep Dive into Pyth Network 💎💎💎💎💎
👉From November 2024😉

What are Oracles?

Blockchains in and of themselves are useful already, for trustless and permissionless transactions without censorship. No trust or verification from the user is required because it is stored on a decentralised ledger with global consensus. What if certain transactions require reliable and real-time data from external sources that do not necessarily have a global consensus or can be stored on the same ledger? For example:

  • Products that rely on price feeds of assets from other blockchains or real-world markets: Many decentralized finance (DeFi) applications, like decentralized exchanges or lending platforms, need accurate and timely information about asset prices (e.g., stocks, cryptocurrencies, commodities). Since these prices are continuously changing in real-world markets, blockchains need a way to securely access this off-chain data.
  • Products that require verifiable and secure random numbers: Randomness is crucial for a variety of blockchain use cases, such as lotteries, gaming, and even secure cryptographic protocols. However, generating truly random numbers on-chain is challenging without introducing bias or predictability. Off-chain randomness, when provided by a reliable source, is often needed.
  • Products dependent on historical price data: Some DeFi platforms and financial products might need access to archived price data for risk assessment, backtesting trading strategies, or offering historical analysis. Since blockchains primarily focus on storing current state information, they need external sources to provide this historical data efficiently.

To address these challenges, Oracles were introduced. Oracles serve as bridges between blockchains and the external world, providing smart contracts with access to off-chain data. They connect external data providers—such as market data owners, web APIs, or IoT devices—to decentralized applications across multiple blockchains. Oracles enable these applications to securely and reliably obtain real-time data, execute transactions based on external events, and interact with data that cannot be directly stored on-chain.

Why can this data be trusted? Oracles provide a robust mechanism for ensuring the integrity and reliability of off-chain data before it is used on the blockchain. An oracle network verifies the:

  • Authenticity: To ensure that the data is genuine and comes from a legitimate source, oracle networks source data from multiple trusted providers or verifiable APIs. This process reduces the risk of malicious or false information being introduced into smart contracts.
  • Accuracy: Accurate data is crucial for smart contracts to function correctly. Oracles achieve this by aggregating data from several independent sources. Instead of relying on a single provider, an oracle network will query multiple data sources and compare their responses.
  • Reliability: Oracle networks enhance reliability by using decentralized nodes, which increases resilience against failures or malicious activity. If one data source or node fails or provides incorrect information, the other nodes in the network can continue to operate and provide valid data.

The demand for accurate and reliable off-chain data is growing as the number of real-world use-cases and adoption of blockchain increases. Users of applications are more than willing to pay for an oracle service that is accurate and reliable and covers a large variety of use-cases.

Pyth Network versus Other Oracles

Read the blog post of Battle of the Oracles to learn more about the different oracles solutions. To recap, Pyth Network is a high-frequency oracle leveraging Solana's technology, offering a robust solution for off-chain data sharing for primarily decentralized finance applications (DeFi). It provides services like real-time price feeds and benchmarks, accessible to a wide range of financial service providers. PYTH is the governance token and utility token of the Pyth Network. Supply and demand for the PYTH token is directly related to level of usage and total demand of Pyth’s services and Pyth Network’s Tokenomics.

Total Value Secured by Oracles

While Chainlink holds the lion’s share of the total value secured by oracles, Pyth has shown by far the largest growth in terms of TVS, number of protocols supported and number of DApps. Pyth is expanding rapidly, across different networks and protocols, supporting more DApps, data providers and integration partners every day. In the same time frame, Chainlink’s marketshare has decreased. Comparing the main metrics of MCAP/TVS ratio and MCAP/TTV ratio, we notice that based on market capitalization (circulating supply), Pyth is undervalued whereas the TVS ratio based on fully diluted value paints a different picture. This is because only 37% of PYTH tokens are unlocked, the next significant PYTH token unlock takes place in May of 2025 and happens yearly thereafter on the same date until the full amount of tokens has been unlocked by 2027.

Use-cases Enabled by Pyth

Products and Services:

  • Price Feeds: real-time market data for smart contracts, blockchains, and applications
  • Benchmarks: historical market data for smart contracts, blockchains, and applications
  • Express Relay: smart contracts or protocols that need protection against MEV (Express Relay) Express Relay is one of a kind product that offers developers to auction off valuable transactions directly to MEV searchers without validator interference
  • Entropy: smart contracts that require secure on-chain random numbers. Secure and verifiable random numbers are incredibly important for creating a fair and unpredictable on-chain actions (e.g., for games)
  • Pyth DAO Governance model

Examples:

  • Decentralised Exchanges (DEXs) require reliable real-time price feeds to provide users accurate trades.
  • Pyth’s data pull model provides data directly from the source, such as exchanges, market makers or DeFi protocols. Because data is pulled only on demand and not pushed at a given interval, it scales efficiently, and costs are offloaded to users where updates are demand-based.

Case Study: Drift (DEX)

Refresher: What is a DEX?

Decentralized Exchange (DEX) allows users to trade cryptocurrencies directly, without intermediaries, using smart contracts on a blockchain. DEXes operate peer-to-peer, providing greater privacy and control over assets compared to centralized exchanges.

There are two main types of DEXes:

  1. Order Book DEXes: These platforms match buy and sell orders using a live order book, similar to traditional exchanges. Examples include dYdX.
  2. Automated Market Makers (AMMs): AMMs use liquidity pools and algorithms to determine asset prices, allowing users to trade instantly without needing a counterparty. Examples include Uniswap and SushiSwap.

Context

Drift is a perpetual trading DEX built on Solana. Speed, reliability, and performance make or break a perpetual trading ecosystem. Drift is a perpetual trading platform that allows traders to create leveraged positions against the performance of synthetic assets.

Why Pyth?

Drift seeks to offer the most feature-rich, powerful perpetual DEX with lightning-fast execution. This ambition necessitates a robust Oracle solution. Legacy oracles are slow and susceptible to front and back running.

Pyth and Drift partnered to rapidly deploy a proof-of-concept. This successful relationship satisfies the ultra-fast network requirements of Drift’s execution tools and is capable of supporting thousands of users and hundreds of assets.

This is only one of many examples of an effective partnership and integration that gives Web3 users an enhanced user experience than DApps that use other Oracle solutions. There are presently over 410 integration partners supporting the transition from push to pull Oracles with Pyth Networks.

Pyth versus Chainlink

We compare Chainlink and Pyth Network with two main metrics: Total Value Secured (TVS) and Total Transaction Volume (TTV)

Total Value Secured

Pyth’s Total Value Secured (TVS) is more distributed across different blockchains and applications compared to Chainlink, offering greater resilience and diversification. Here's how the comparison breaks down:

  • Blockchain Distribution: Pyth’s TVS shows a broader spread across multiple blockchains. For instance, only 61.1% of Pyth’s TVS is concentrated on the Solana blockchain, which means the remaining value is distributed across other blockchains, contributing to its decentralized footprint. In contrast, 97.1% of Chainlink’s TVS is concentrated on Ethereum, creating a higher dependence on a single blockchain. This heavy reliance on Ethereum makes Chainlink more vulnerable to network-specific issues, such as scalability concerns or market downturns affecting Ethereum.
  • Application Distribution: Pyth also demonstrates a healthier diversification across different applications. Only 23.8% of Pyth’s TVS is tied to its top application, meaning the remaining value is distributed among various other applications. This broader application spread lowers the risk of one dominant app affecting the network’s overall performance. Chainlink, however, has 48.8% of its TVS tied to its top application, meaning nearly half of its secured value relies on a single application. This concentration creates a potential single point of failure, making Chainlink more sensitive to shifts in the usage or success of that key application.

Pyth's more balanced distribution of TVS across different blockchains and applications enhances its resilience. With a healthier spread of its value, Pyth is better positioned to withstand market fluctuations or downturns that may affect individual blockchains or applications, making it less exposed to risks associated with dependency on any single network or product. This diversified approach gives Pyth a structural advantage in terms of long-term stability and adaptability.

Total Transaction Volume

Another, perhaps better, metric to measure the true market share and usage of an Oracle network is TTV (Total Transaction Volume). TTV is strongly correlated with the frequency of oracle price updates and therefore oracle revenue and true demand for its products and services. TVS can overstate or understate an application’s demand for price updates, because an application could have a disproportionate amount of locked value relative to the amount of Oracle interactions one would expect to observe.

Chainlink, the traditional market leader of oracle networks, is losing ground after being slow to serve customers needing faster data updates, though they've recently launched a new high-speed service. Pyth has become a successful competitor by focusing on rapid data delivery across multiple platforms, making it easier for financial applications to access real-time price information. Large trading platforms are increasingly building their own internal price tracking systems rather than paying external providers, suggesting cost is a major factor in their decisions.

The key to future success in digital trading will be speed - traditional exchanges currently have an advantage with their centralized systems, but new platforms are starting to close this gap by developing faster price update capabilities.

Pyth Network Governance

The Pyth Network operates a decentralized governance system that empowers the community by allowing all PYTH token holders to have a direct say in the network's development and decision-making processes. This decentralized governance model ensures that control of the network is distributed among its users, promoting transparency and inclusion.

To participate in governance, token holders must stake their PYTH tokens through the Pyth staking program. By staking their tokens, users gain the ability to vote on community governance proposals, ensuring that they have a voice in the key decisions shaping the future of the Pyth Network.

In addition to voting, any PYTH token holder has the right to submit proposals to the Pyth DAO, provided they meet the requirement of holding and staking at least 0.25% of the total PYTH tokens staked. The proposals that can be brought to the DAO are diverse and impact many critical aspects of the network's functionality, including:

  • Determining the size of update fees: Proposals can influence the fees charged for updates to the network, ensuring that they remain fair and competitive.
  • Reward distribution mechanisms for publishers: The community can vote on how rewards are allocated to data publishers, ensuring that those contributing accurate and reliable data are fairly compensated.
  • Approving software updates across blockchains: The Pyth Network operates across multiple blockchains, and governance participants have the power to approve essential updates to on-chain programs, ensuring the network remains up to date and secure.
  • Listing price feeds and determining their reference data: Token holders can vote on which price feeds are listed on Pyth, as well as set the technical parameters for these feeds, such as the number of decimal places in the prices and the reference exchanges used to determine the data.
  • Selecting data publishers: The governance system allows the community to permission publishers, or select which entities are allowed to provide data for each price feed. This ensures that only trusted and verified data sources are contributing to the network.

Conclusion

The Pyth Network stands out as a disruptive force in the decentralized oracle space, rapidly growing across protocols and blockchains and setting new standards for both data speed and diversification. Leveraging Solana technology, Pyth brings high-frequency, real-time market data directly from first-party sources—including exchanges and trading firms—to an expanding universe of DeFi and TradFi applications. Compared to its primary competitors, Pyth demonstrates healthier resilience by distributing its Total Value Secured across multiple blockchains and applications, reducing dependencies and systemic risk.

Recent market trends show Pyth gaining ground in metrics like Total Transaction Volume, challenging traditional leaders like Chainlink and reflecting a broader shift toward fast, reliable, and diversified data solutions in decentralized finance. Its innovative approach—such as direct publisher sourcing, sub-second updates, and auditable aggregation—addresses the needs of financial markets with unique precision and transparency.

Ultimately, for developers, institutions, and investors seeking reliable off-chain data with speed and global reach, Pyth Network is quickly becoming a cornerstone oracle solution—and its trajectory signals a new era of dynamic, decentralized connectivity for global finance.

 

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Understanding the Crypto Alt Season

The next altcoin season is poised to ignite the crypto market, promising to turn savvy investors' portfolios into goldmines. As Bitcoin's dominance wanes, a new era of blockchain innovation is dawning—are you ready to ride the wave?

Market behavior often exhibits distinct patterns and cycles. One such phenomenon that has captured the attention of traders and investors alike is the "Alt Season"—a period when alternative cryptocurrencies, or "altcoins," outperform Bitcoin and experience significant price surges.

The concept of market cycles and seasonality is not unique to crypto; it's a well-established principle in traditional financial markets. However, in volatile crypto space, these cycles can be more pronounced and occur with greater frequency.  

In this article, we’ll try to cover these and other topics: 

  1. The nature and characteristics of Alt Seasons
  2. The importance of recognizing market cycles in cryptocurrency trading
  3. Alt Season indicators and how to interpret them
  4. Predictions and speculatins about the next potential Alt Season

What Is Crypto Alt Season?

Crypto Alt Season, short for "Alternative Cryptocurrency Season," refers to a period in the cryptocurrency market when alternative cryptocurrencies (altcoins) significantly outperform Bitcoin in terms of price appreciation. During an Alt Season:

  1. Many altcoins experience rapid price increases.
  2. The market share of altcoins grows relative to Bitcoin.
  3. Trading volume for altcoins typically increases.
  4. Investor attention shifts from Bitcoin to various altcoin projects.

An Alt Season can last anywhere from a few weeks to several months. It's often characterized by increased risk appetite among investors, who are willing to allocate more capital to smaller, potentially higher-risk crypto projects in search of higher returns.

Is Crypto Season the Same As Crypto Alt Season?

While related, Crypto Season and Crypto Alt Season are not exactly the same:

  1. Crypto Season:
    • Refers to a broader bullish period in the entire cryptocurrency market.
    • Typically includes price appreciation for both Bitcoin and altcoins.
    • Can be longer in duration, sometimes lasting for many months or even a year or more.
    • Often starts with a Bitcoin rally, followed by increased interest in the broader crypto market.
  2. Crypto Alt Season:
    • Specifically focuses on the outperformance of altcoins compared to Bitcoin.
    • Can occur within a broader Crypto Season but is more narrowly defined.
    • Generally shorter in duration than a full Crypto Season.
    • May happen towards the latter part of a broader Crypto Season, as investors seek higher returns in smaller cap coins.

Key Differences:

  • Scope: Crypto Season encompasses the entire market, while Alt Season focuses on altcoins.
  • Duration: Crypto Seasons are generally longer than Alt Seasons.
  • Market Dynamics: In a Crypto Season, Bitcoin often leads the rally, while in an Alt Season, altcoins outperform Bitcoin.

It's important to note that these terms are not officially defined and can be subject to different interpretations within the cryptocurrency community. However, understanding the distinction can help investors and traders better analyze market trends and potential opportunities in different segments of the crypto market.

What Is Alt Season Indicator?

The Alt Season Indicator is a tool used by cryptocurrency traders and investors to gauge whether the market is entering or currently in an "Alt Season" — a period when altcoins are outperforming Bitcoin. While there isn't a single, universally accepted Alt Season Indicator, several metrics and tools are commonly used to assess the likelihood of an Alt Season. Here are some key aspects of Alt Season Indicators:

Bitcoin Dominance

One of the most widely used indicators is Bitcoin Dominance, which measures Bitcoin's market capitalization as a percentage of the total cryptocurrency market cap.

  • Calculation: (Bitcoin Market Cap / Total Crypto Market Cap) * 100
  • Interpretation: A declining Bitcoin Dominance often signals a potential Alt Season, as it indicates that capital is flowing from Bitcoin into altcoins.
  • Threshold: Some traders consider Bitcoin Dominance below 50% as a potential indicator of an Alt Season.

Altcoin Market Cap Ratio

This indicator compares the total market capitalization of altcoins to Bitcoin's market cap.

  • Calculation: Total Altcoin Market Cap / Bitcoin Market Cap
  • Interpretation: An increasing ratio suggests growing strength in the altcoin market relative to Bitcoin.

Top 10 Altcoins Performance

This indicator tracks the performance of the top 10 altcoins by market cap (excluding Bitcoin) compared to Bitcoin over a specific period.

  • Calculation: Average percentage gain of top 10 altcoins vs. Bitcoin's percentage gain
  • Interpretation: When a majority of top altcoins consistently outperform Bitcoin, it may indicate an Alt Season.

Alt Season Index

Some crypto data platforms offer a proprietary Alt Season Index, which combines various metrics to provide a single score indicating the likelihood of an Alt Season.

  • Scale: Often presented as a percentage or a 0-100 score
  • Interpretation: Higher scores (e.g., above 75%) suggest a higher probability of an ongoing Alt Season

Trading Volume Ratios

This indicator compares the trading volumes of altcoins to Bitcoin's trading volume.

  • Calculation: Total Altcoin Trading Volume / Bitcoin Trading Volume
  • Interpretation: An increase in this ratio may indicate growing interest in altcoins, potentially signaling an Alt Season.

Important Considerations:

  1. No single indicator is foolproof. Traders often use a combination of indicators for a more comprehensive analysis.
  2. Market conditions can change rapidly, and past patterns don't guarantee future results.
  3. Different traders may use different thresholds or interpretations of these indicators.
  4. The crypto market's evolving nature means that indicators may need to be adjusted over time to remain relevant.

Understanding and effectively using Alt Season Indicators can help traders and investors make more informed decisions about allocating their resources between Bitcoin and altcoins. However, it's crucial to combine these indicators with broader market analysis and risk management strategies.

Alt Seasons: Historical Perspective, Current Situation, and Future Predictions

Previous Altcoin Seasons

In crypto, two periods stand out as particularly significant for altcoins. These "alt seasons" saw unprecedented growth and interest in cryptocurrencies beyond Bitcoin, reshaping the landscape of digital assets.

The 2017-2018 Alt Season

Duration: December 2017 to January 2018

Context:

  • Bitcoin (BTC) experienced its most remarkable bull run to date, reaching nearly $20,000 in December 2017.
  • This surge in Bitcoin's price and public interest created a ripple effect throughout the crypto market.

Key Developments:

  1. Proliferation of New Coins: The success of Bitcoin catalyzed the launch of numerous new cryptocurrencies.
  2. Investor Frenzy: Buoyed by Bitcoin's success, investors eagerly sought the "next Bitcoin," pouring capital into various altcoins.
  3. ICO Boom: This period saw a surge in Initial Coin Offerings (ICOs), with many projects raising millions in a matter of hours or days.
  4. Market Expansion: The total cryptocurrency market cap reached unprecedented levels, briefly surpassing $800 billion in January 2018.

Notable Altcoins: Ethereum (ETH), Ripple (XRP), and Litecoin (LTC) saw significant price increases during this period.

The 2020-2021 Alt Season

Duration: December 2020 to April 2021

Context:

  • Bitcoin broke its previous all-time high, surpassing $60,000 in March 2021.
  • The COVID-19 pandemic had accelerated digital adoption and increased interest in alternative investments.

Key Developments:

  1. DeFi Explosion: Decentralized Finance (DeFi) projects gained massive traction, with many tokens seeing exponential growth.
  2. NFT Boom: Non-Fungible Tokens (NFTs) entered the mainstream, driving interest in blockchain-based digital assets.
  3. Institutional Adoption: Major companies and institutional investors began adding cryptocurrencies to their balance sheets.
  4. Technological Advancements: Many altcoins introduced innovative features, scaling solutions, and use cases.

Notable Altcoins: Ethereum (ETH) reached new highs, while projects like Binance Coin (BNB), Cardano (ADA), and Polkadot (DOT) saw remarkable growth.

Comparative Analysis: Both alt seasons shared some common characteristics:

  • They were preceded by significant Bitcoin price rallies.
  • New projects and tokens gained rapid popularity and valuation.
  • Retail investor participation increased dramatically.
  • The overall cryptocurrency market capitalization reached new heights.

However, the 2020-2021 alt season was marked by greater institutional involvement and a broader range of technological innovations, particularly in DeFi and NFTs.

Is It Alt Season?

Based on the indicators discussed above, it's not currently an altcoin season. The Altcoin Season Index at 41 and Bitcoin's market dominance at 61.3% both suggest that Bitcoin is still the dominant force in the crypto market at this time.

When Is Alt Season?

Based on the information we could gather from various experts, we can analyze the predictions for the next altcoin season as follows:

  • Based on the latest analysis from experts and on-chain data, here’s what we know about the next altcoin season:

     

    Current Status (August 2025):

     

    • The altcoin season index—a metric that signals how many altcoins outperform Bitcoin—currently sits around 37. For a “full-blown” alt season, it typically needs to rise above 75.

    • Bitcoin dominance is approximately 61-62%. Historically, dropping below 60% often coincides with a rapid rotation into altcoins and the start of alt season.

     

    Key Indicators to Watch:

     

    • Altcoin Season Index (ASI): Above 75 signals a true altcoin season.

    • Bitcoin Dominance: A move below 60% usually marks the transition; sub-50% dominance is associated with peak alt season inflows.

    • Market Activity: Increasing volumes in major altcoins and Layer 1s, meme coin rallies, and spikes in DeFi activity are early warning signs.

    • Ethereum Outperformance: When ETH surges relative to BTC, this historically precedes broader altcoin rallies.

     

    Expert Predictions for 2025:

     

    • Analysts point to a pivotal window for alt season starting as early as August 2025 and extending through the fall, with many expecting true acceleration of altcoin gains if Bitcoin’s price consolidates and capital rotates further into alts.

    • There is strong consensus that macroeconomic catalysts, such as potential U.S. interest rate cuts and ongoing Bitcoin ETF momentum, could fuel a major altcoin rally in late 2025 if positive conditions persist.

    Summary Table: Key Factors & Targets

    SignalAlt Season TriggerStatus (Aug 2025)
    Altcoin Season Index (ASI)>75 ~37
    Bitcoin dominance<60% ~61–62% (near trigger)
    Altcoin trading volumeSustained surge across many alts Rising, but not explosive
    Ethereum outperformanceETH/ BTC breakout, >$3,700 Near, ETH ~$3,500
    Market narrativesAI, DeFi, meme coins, new L1 inflows Strengthening
     

    Bottom Line:
    Most analysts agree the groundwork for altcoin season in 2025 is building. We are currently in a transition phase: if Bitcoin dominance continues to fall and the Altcoin Season Index rises above 75, a full-fledged alt season could ignite during the second half of 2025. Monitor these key indicators to stay ahead as market momentum shifts from Bitcoin into a broader range of altltcoins.

Key Factors to Consider

  • Technology: Look for coins with innovative solutions to existing blockchain challenges.
  • Adoption: Consider projects with growing partnerships and real-world use cases.
  • Market Position: Established coins with room for growth may offer a balance of stability and potential returns.
  • Tokenomics: Understanding supply dynamics can help predict potential price movements.

It's crucial to conduct thorough research before investing. The cryptocurrency market is highly volatile, and past performance doesn't guarantee future results. Always invest responsibly and within your risk tolerance.

How to Win in Next Alt Season?

Capitalizing on the next altcoin season requires a strategic approach. Here's how to maximize potential gains:

  • Research and Diversification: Thoroughly research potential investments, analyzing both fundamentals and technical aspects to identify promising altcoins. Diversify your holdings across different projects to mitigate risk and maximize potential returns. Don't put all your eggs in one basket.
  • Strategic Timing: Utilize technical analysis tools like support/resistance levels and RSI to pinpoint optimal entry and exit points. Monitor market sentiment and price trends to make informed decisions. A clear entry and exit strategy is crucial for managing risk and maximizing profits during volatile periods.
  • Newer Projects: Consider participating in newer altcoin projects. This provides early access to potentially high-growth projects at discounted prices. Research upcoming defi projects with use cases, focusing on innovative projects with strong potential. Investing early can yield substantial returns as the project develops.

Conclusion

In summary, an altcoin season, marked by significant price increases in non-Bitcoin cryptocurrencies, may be on the horizon.  This potential surge could be driven by investors seeking higher returns in smaller-cap cryptocurrencies, technological advancements in altcoin projects, increased blockchain adoption, and the transition of projects from speculative ventures to real-world applications

Remember, while the potential for significant gains exists during an altcoin season, the cryptocurrency market remains highly volatile. Always invest responsibly.

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