Hi Kim,

Thanks for reading The BlockByte Weekly, where we summarise the key updates in crypto over the last week and provide our perspective on what you need to know as an investor.
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Executive Summary

The overall cryptocurrency market remained flat for the week (-0.7%), with Solana the only top-5 token that showed upside (+5.6%). The major story in the crypto markets this week was the 90% price fall of the Mantra token following the alleged liquidations of leveraged positions by a major exchange. The collapse saw Mantra's market cap fall from over $6B to under $600M. In other news this week, the US economy and President Trump continue to be a major source of economic uncertainty. Major market indicators such as the VIX (volatility index - also known as the fear index) and low levels of unemployment look economically bullish. On the other hand, global confidence in the US financial system looks to be in question as the superpower struggles to manage it's evolving debt crisis. Gold has continued to be the safe haven asset for the last several months, however, there are some wondering if the gold trade is now overcrowded.

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Market Update

Over the last 7 days, the cryptocurrency market remained relatively flat (-0.7%). Since its peak in December, the crypto market fell by as much as 38%, and is currently 29% below the all-time high market cap of $3.7T. In spite of some of the extreme volatility we've seen, the overall crypto market is still up ~17.5% over 12 months, emphasising the importance of investing with long-term time horizons in secular growth trends.

GrokAI's definition of secular is a good reminder for investors: "Secular comes from the Latin saeculum, meaning "of an age" or "generation." It denotes something that is long-lasting, non-cyclical, and independent of seasonal or temporary factors. In economics and finance, "secular" describes trends driven by fundamental, structural changes in society, technology, or markets, rather than short-term or cyclical events like recessions or booms.

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1-Year View of the Cryptocurrency Market Cap (% change)

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Mantra's Fall - A Case of Overleverage & High Concentration

Mantra (OM), a blockchain which was in the top 20 cryptocurrencies by market cap, lost more than 90% of its value last Sunday, collapsing from $6.30 to $0.37. The token is currently trading at $0.60. In an interview with CoinTelegraph, Mantra founder, John Patrick Mullin said that the reason for the collapse was not due to insider selling, but an exchange which sold the token down and force closed leveraged positions.

Mullin has since done a series of public appearances and podcasts to calm investors, reassuring them that this was not a 'rug-pull' or crypto scam, but simply a very overleveraged investor that was wiped out. Nonetheless, the dramatic fall in price from this liquidation highlighted one of Mantra's key vulnerabilities which was a high concentration of ownership, Glassnode reported that the top 1% of wallets held 96.4% of the OM supply before the crash. Mantra made headlines over 3 years for it's dramatic price gains and its recent $1B tokenisation deal with Dubai-based real estate developer, DAMAC.

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US Economy Sends Mixed Messages

This week the numbers of US jobless claims came in below forecast (215,000 vs 225,000), indicating the US economy is still strong with low levels of unemployment (4.2% vs. 5.5% on average over the last ~80 years).

In addition, this week analysts also noted that the VIX has peaked above 50, three times in April. The VIX stands for volatility indicator, and is often referred to as the 'fear index'. Historically speaking, whenever this has happened in the past, it has been followed by significant gains over 1 to 5 year time periods.

Qasem Al-Ali

@AlaliQasem

Every time the $VIX closed above 50 since 1990, the S&P 500 was sharply higher 1–5 years later.Average returns:1-Year: +35%2-Year: +53%3-Year: +55%5-Year: +129%$VIX closed at 52.33 on 4/8/2025. History says: big gains ahead.(Source: @CharlieBilello)

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On the more conservative side, Ray Dalio, founder of the world's largest hedge Ffund and author of new book 'How Countries Go Broke', said that he is worried about something far worse than a recession for the US economy. He notes in the video below that US debt has become unsustainable and that is resulting in a shift of the current monetary system, a period of great economic instability. I'd recommend watching the 9-minute video below if you're interested in understanding this perspective in more detail.​

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Will the Gold Rush Continue?

Over the last year, gold has risen by ~40% and made new all-time highs last week, at over $3,300 per ounce. The question on many investors minds now is whether it's too late to invest in gold and whether or not this trade is overcrowded. Whilst gold could head higher, we believe that at this moment in time, digital gold (bitcoin), represents a better opportunity for long-term growth, currently trading 22% below it's highs of $109,000 seen in December.

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Until next week,
James

James Brannan
Managing Director
BlockByte
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​james@blockbyte.com.au​
​https://blockbyte.com.au/​

BlockByte does not provide financial advice. We provide a personalised brokerage service with tailored support, research and secure custody for investing in digital assets. Reach out to our team to discuss how we can help.