Web3 AI Daily Review (2024/9/4)
The trigger for the sharp decline was the overnight release of two PMI data from the United States. Among the sub-indices, the drop in orders and the rise in inventories are considered one of the most concerning signals since the global financial crisis, while the rebound in the price index suggests a CPI rebound, conveying concerns about stagflation. On September 3, major U.S. stock indices recorded their largest single-day drop since August 5, with the S&P 500 falling 2.4% and the Nasdaq dropping over 3%, marking the third-largest single-day decline in the past year. The Dow Jones, closely related to the economic cycle, fell back below 41,000 points. The leading U.S. stocks, known as Mag7, all declined.1. Attention Value - Market Highlights
1. Market Trends
(1) Macroeconomic Environment:
l "September Curse" Comes True! U.S. Stocks Plummet
The trigger for the crash was the release of two PMI data points from the U.S. overnight. Among the sub-indices, the decline in orders and the rise in inventory are considered one of the most concerning signals since the global financial crisis, while the price index regaining upward momentum suggests a rebound in CPI, conveying worries about stagflation. On September 3, major U.S. stock indices recorded their largest single-day drop since August 5, with the S&P 500 falling 2.4% and the Nasdaq dropping over 3%, marking the third-largest single-day decline in the past year. The Dow Jones, closely related to the economic cycle, retreated from its high, falling back below 41,000 points. The leading U.S. stocks, the Mag7, all fell collectively.
Figure 1, Nasdaq
Source: Coinglass, Dot Labs
l "Crash Culprit": PMI Data Points to Recession and Stagflation
The two PMI data points released overnight ignited market concerns about the U.S. economy. The ISM Manufacturing PMI showed a new orders index of 44.6, the worst since June 2023, down from July's 47.4; the inventory index rose sharply to 50.3, up 5.8 points from the previous month, with July's figure at 44.5; the manufacturers' payment prices index increased from 52.9 in July to 54. Markit Manufacturing PMI and ISM sub-data converged, conveying three significant signals:
First, the employment index showed a notable recovery from July, indicating that this Friday's non-farm payroll report will be stronger than expected;
Second, the manufacturers' payment prices index regained upward momentum, suggesting that the cooling of commodity inflation may have ended, and we may have already seen the CPI low for this cycle;
Third, the new orders/inventory ratio fell to recessionary levels, indicating serious issues in manufacturing.
Figure 1, CPI Data
Source: Coinglass, Dot Labs
(2) Web3 Sector:
l Cryptocurrency Market Declines Again
The cryptocurrency market is quite sluggish. BTC fell again today from around $58,000, dropping to a low of $55,606. ETH also fell from around $2,500 to about $2,300. Altcoins also experienced a widespread decline due to the overall market performance. According to Coinglass data, $196 million was liquidated across the network in the past 24 hours, with $172 million in long positions liquidated. The performance of the BTC spot ETF is also not optimistic, remaining in a state of net outflow since August 27, when the data showed a large net outflow of $127 million.
2. Hot Events
(1) Macroeconomic Sector:
l NVIDIA Plummets 9.5%, Market Value Erased by $278.9 Billion
On September 3, Tuesday, the first trading day of September following the long U.S. stock weekend, "catastrophic" became a fitting description, with "plunge" referring to NVIDIA and a host of chip stocks that led the decline throughout the day. NVIDIA gapped down 2.8% at the open and continued to decline, closing down 9.5%, with the stock price dropping to $108, the lowest in three weeks since August 9, and a market value loss of $279 billion, further distancing its total market value from the $3 trillion mark. NVIDIA's double-leveraged ETF fell about 19%. The Philadelphia Semiconductor Index, as an industry benchmark, plummeted 7.8%, breaking through the 5100 to 4800 integer levels, reaching a three-week low since August 12, with the ETF tracking this benchmark, SMH, dropping 7.5%, marking the largest single-day decline in over four years.
Figure 1, NVIDIA
Source: Coinglass, Dot Labs
(2) Web3 Sector:
On September 4, Web3 cybersecurity company Ancilia announced that Penpie suffered an attack on its reward protocol, resulting in a loss of approximately $27 million. This attack caused the Penpie platform token PNP to drop significantly by about 40%; meanwhile, Pendle (PENDLE) also fell nearly 10% in the past 24 hours, indicating that the incident impacted the entire Pendle ecosystem.
3. Hot Narratives
Recently, discussions and controversies surrounding Ethereum have increased, with not only Vitalik himself needing to clarify his views, but even the Ethereum Foundation releasing announcements to quell community doubts. On August 25, KOL @0xstrobe publicly questioned Vitalik, accusing him of poor communication on DeFi topics. Vitalik responded that the profits you mentioned come from borrowers, transaction fees, etc., which is precisely what I am concerned about. The value of cryptocurrencies lies in the ability to earn returns from them, and these returns are paid by those trading cryptocurrencies.
The answer is clear; for example, the returns for those earning an 8% annual interest rate in dollars are paid by those leveraging 2x to go long on ETH at an 8% rate, but this means that the DeFi market exists downstream of the ETH market. Therefore, while DeFi may be great, it is fundamentally constrained and cannot become a breakthrough innovation that propels cryptocurrency technology to another 10-100x adoption.
However, Vitalik's response has drawn more questions and rebuttals. For instance, a partner at Electric Capital stated that Vitalik's comments apply to all finance. KOL @PaperImperium indicated that Vitalik's statements reflect a misunderstanding of human economic history. The CEO of Alphaverse Capital stated that Vitalik's viewpoint is untenable.
J.P. Morgan provided reasons for Ethereum's poor performance in a research report: since the launch of the Ethereum spot ETF last month, there has been a net outflow overall, while the spot Bitcoin ETF launched earlier this year has been more successful. The net outflow for the Ethereum fund is about $500 million, while the Bitcoin ETF has seen inflows exceeding $5 billion. The bank also noted that the weak data for the Ethereum ETF was somewhat expected and pointed out that Bitcoin's "first-mover advantage," lack of staking, and lower liquidity mean less appeal to institutional investors. Zhu Su believes that the Ethereum Foundation's issue is not the premature sale of valuable tokens but the inability to provide a coherent roadmap and effective leadership.
4. Potential Catalysts
On September 6, the final non-farm payroll report before this month's Federal Reserve decision will be released. Against the backdrop of a downward trend in inflation, this employment report will undoubtedly be one of the most important data points of the week. The U.S. adjusted non-farm payrolls for July, released on August 2, showed an increase of 114,000, below the expected 175,000. This data release triggered widespread market concerns, with some opinions suggesting that there is a risk of recession in the U.S. economy, leading to a week-long decline in global markets, with cryptocurrencies, as risk assets, being particularly negatively impacted.
2. Attention Value - Hot Projects
1. Social Media Highlights
The Ethereum ecosystem is a decentralized platform that supports the development of smart contracts and DApps. There are over 1,400 projects within the Ethereum ecosystem, primarily categorized into DeFi, NFT, GameFi, infrastructure, and development tools. DeFi is the largest project category on Ethereum, with DeFiLlama data showing that Ethereum's DeFi projects have a TVL exceeding $25 billion, daily trading volume over $1 billion, and approximately 300,000 active users; as of July 2024, Ethereum's staking volume has increased from 25 million ETH in 2023 to 33.7 million ETH, indicating growing community confidence in the Ethereum network, especially following the transition to a Proof of Stake mechanism, where staked ETH accounts for 28.28% of the total supply. Overall, the Ethereum ecosystem will continue to attract the attention of investors and developers in 2024.
Key Projects:
· $WELL
WELL3 is a Web3 health platform that transforms health data into valuable rewards by leveraging decentralized physical infrastructure networks (DePIN) and decentralized identities (DID), along with complex AI analytics, fundamentally changing health data management.
Recently, WELL3 has garnered attention for the resubmission and approval of proposals MIP-B23 and MIP-O02, which may positively impact the price. The recent sentiment towards WELL3 is optimistic, with views that its community incentives, reduction of selling pressure, and enhanced stickiness through airdrop programs are excellent, leading to a generally optimistic market sentiment. WELL3 is building a dynamic ecosystem that provides real value to users, which will be key to its long-term development.
2. Smart Money Accumulation
· Smart Money Holdings
Source: ChainEDGE, Dot Labs
Project Overview:
- F16 (@CoinF16 /X)
F16 is a meme coin symbolizing freedom and resilience, with each token representing the fight for liberation, justice, and unity, empowering holders to defend their beliefs. F16 is not just a coin; it is a lifestyle, a statement, and a great journey into cryptocurrency.
- r/snoofi (CA: 7M9KJcPNC65ShLDmJmTNhVFcuY95Y1VMeYngKgt67D1t)
Snoofi is a meme coin with no intrinsic value, no expected financial returns, no profit plans, and no central issuer. Snoofi is intended solely for entertainment purposes. Although the r/snoofi subreddit exists on reddit.com, this subreddit and the snoofi meme coin have no affiliation with Reddit Inc. or any authorized partners of its mascot Snoo.
· Smart Money Inflows
Source: ChainEDGE, Dot Labs
Project Overview:
- UNREAL (@TheUnrealAI /X)
UNREAL AI is a decentralized GPU computing network aimed at creating a globally accessible advanced GPU computing network. UNREAL AI optimizes AI training, mining, and rendering through a centralized GPU network: providing scalable and powerful GPU resources, allowing researchers and developers to efficiently train complex AI models using top-tier GPUs without expensive infrastructure; offering access to a global network of high-performance GPUs to enhance cryptocurrency mining, this decentralized approach reduces costs and complexities associated with traditional mining setups; utilizing decentralized GPU capabilities to deliver high-quality visual effects and animations faster, significantly shortening rendering times, enabling users to efficiently and economically render high-quality films and visual effects.
- COLON (@colon_ethereum /X)
COLON is the father of Doge. Because Doge first appeared on the blockchain and inspired other dog-themed meme coins, Colon is the first precedent for all dog meme coins. According to mentions on the official X platform, this dates back to 2009, and without Colon, Doge would hardly have become the beloved and cute meme it is in this space.
3. Attention Value - Sector Rotation
1. Hot Sectors
Source: Dune, Dot Labs
Source: Dune, Dot Labs
2. Internal Sector
Source: Dune, Dot Labs
