What happened
Cryptocurrencies are finding their way onto the radar of growth investors, with some impressive moves seen thus far this year. Of course, some tokens are performing better than others, with outsize gains seen among some of the smaller-cap, higher-growth projects in this space in recent weeks.
The seven-day returns for eCash (XEC 1.43%), Fantom (FTM 1.02%), and Osmosis (OSMO 0.15%) stood at 35.7%, 53.5%, and 20.3%, respectively, as of 11:45 a.m. ET Friday. Thus, these tokens are among the best-performing cryptos over the past week, supported by a much more bullish macro backdrop and clear risk-on sentiment that's been building in 2023.
CRYPTO: XEC
Key Data Points
CRYPTO: FTM
Key Data Points
CRYPTO: OSMO
Key Data Points
Additionally, there are some unique catalysts investors are focusing on with these projects. An integration with Avalanche this week has led to a surge in interest in the eCash network. Fantom skyrocketed on news that a decentralized vault was launched and a successful proposal was accepted by the community, which is expected to result in higher revenue for developers, lower gas fees, and more investment in this network. And decentralized exchange Osmosis has seen increasing interest due to an upcoming Neon upgrade, which would improve pricing efficiency and purportedly improve network security with respect to potential liquidity attacks and price manipulation.
So what
Crypto investors have had a lot to digest over the past two years. From the boom of 2021 to last year's bust, it's been a roller coaster of a ride for those invested in digital assets. This year, investors have been treated to price action resembling 2021's far more than 2022's.
One of the key differences I've noticed this year is the extent to which positive catalysts for various crypto projects are actually being priced in. Last year, some massive developments took place (the Ethereum Merge is a great example), which resulted in an initial surge, followed by a near-immediate sell-off. Investors were intent on selling into any sort of near-term strength, with profit-taking on any rally being seen as the way to go.
This year, it looks like investors are taking the view that letting positions ride is the way to go. Momentum is back, and working its magic on valuations (to the upside this time). Thus, for projects such as eCash, Fantom, and Osmosis, these catalysts appear to be providing the fuel for a rally that looks more sustainable than at any point in the past year.
Now what
It remains to be seen whether the macro environment ultimately invites investors to revisit this overly bullish thesis at some point in the coming weeks and months. Indeed, I think it's unlikely that 2023 will replicate the kinds of moves seen in 2021. Of course, it's impossible to rule that out -- this is an asset class that tends to snowball with momentum.
That said, these three tokens are each unique projects with their own set of catalysts worth putting on the watch list right now. I will be particularly interested in how these tokens perform over the coming weeks.
