Howdy!

We’re starting a new routine this week where every Wednesday we’ll be publishing a Solana-focused midweek market roundup. And what a day to begin!

We’ve got pain and suffering in the market, pump.fun mints, and Frankendancer Jito support:

Self-fulfilling prophecies

I don't know, folks. Solana looks pretty cooked. The price has fallen below the 50 day and 200 day moving average, and is currently hovering around $130. It's dropped about 35% since Valentine's Day and is certainly not alone, with the whole market bleeding red over the same interim.

As such, we now have a lot of people asking: Is the bull run over? And if so, is the recent Bybit hack (or some other news, like the LIBRA memecoin fustercluck or the upcoming FTX unlocks) to blame? Conventional wisdom suggests that every cycle, a major hack or scandal shutters the market's seemingly unstoppable momentum. But are these events really the cause, or just convenient scapegoats for something inevitable?

Bull runs seem to follow a fairly predictable rhythm, actually. Historically, BTC has peaked a little less than a year after reclaiming the previous cycle's all-time high, often in December or January. It then moves briefly sideways, then downwards, and everything else follows the leader. This pattern held true in 2013, 2017 and 2021. In our current cycle, bitcoin reclaimed $69K in March 2024, and may have peaked 10 months later at $108K in January 2025.

Unsurprisingly though, people seem keen to frame the recent Bybit hack as the cause of a presumptive bearish spiral, rather than accepting that a pullback was simply due. Solana, which rode bitcoin’s momentum to nearly $300, has been caught in the same unwarranted blame game. 

We’ve seen this before. Everyone knows that Mt. Gox and its admission of insolvency killed the 2013 bull run. China banning Bitcoin halted the truly magnificent ICO run of 2017. Scandals from Luna and FTX were, of course, to blame for jettisoning the 2021 moonshot. Except no, actually. None of that is true.

Bitcoin topped above $1,000 in December 2013, roughly 9 months after reclaiming its previous $31 ATH. The Mt. Gox scandal didn't break the dam until months later in February 2014. Likewise, China’s Bitcoin ban didn’t end the 2017 bull run. The ban happened when bitcoin was around $4K. The price dipped briefly before rocketing to $18K. When the market finally crashed in January 2018 (10 months after passing the previous cycle's all-time high), people went on to say that it was due to China cracking down on bitcoin mining in the wake of the ban.

As for Luna and FTX, both devastated investor confidence, but neither caused the bear market. Crypto prices at large had already been in decline since December 2021, or about a year after surpassing the previous cycle's all-time high. The terraUSD collapse happened in May 2022. FTX didn’t implode until November. Solana, which was admittedly affected due to its close association with the latter, was already deep into its downtrend before that event unfolded.

And that's to say nothing of all the major hacks that did not conveniently align with market peaks. In 2016, the DAO hack and Bitfinex hack were both massive. If hacks were real bear catalysts, why did the market shrug them off?

Because hacks and scandals do not end bull runs. Markets crash due to overheating, leverage, and exhausted demand — all of which align with natural cycle peaks and troughs. Bad news certainly does increase the likelihood of local dips, but if the market isn't in the right position relative to the current cycle, it isn't going to crash on a macro scale. The Bybit hack certainly gave traders an excuse to panic. But if it hadn’t been Bybit, it would’ve been something else.

So what now? Well, no one’s yelled out “JENGA!” yet. Maybe another leg up. Whales seem to be accumulating, which remains bullish. But given the timing, it's also possible that the clock was up in January and this was the top. If that's true, it would mark blockchain’s weakest ever market cycle. Either way, history is clear: Hacks don’t end bull runs. Bull runs end, and traders look for something to blame.

— Jeff

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Look out below, pump.fun:

I predicted in this newsletter that Argentine President Javier Milei’s disastrous memecoin launch would have a limited impact on memecoin trading. A week and a half later, I’m starting to wonder if my prediction was wrong.

New token mints on pump.fun have fallen by around 40% in the 12 days since Milei launched LIBRA, according to Blockworks Research. Obviously, crypto is bathed in red across the board right now, but for the first time in months, pump.fun is actually slowing down.

— Jack

On Monday, the GitHub repository for Firedancer — a performant Solana client written from scratch by Jump — put out a testnet release that added “support for bundle providers.” Bundles in this context seems to refer to a service offered by Jito, the Solana infrastructure shop that made maximal extractible value modifications to the original Solana Labs client.

Jito’s support means Jump’s operational-but-incomplete Frankendancer client could soon let validators capture MEV through Jito. The lack of MEV capture — which brought in several hundred million dollars for Solana validators in 2024 — has so far been a major roadblock for validator adoption of the Frankendancer client. Frankendancer and Firedancer adoption are important because they will give Solana meaningful client diversity, which it currently lacks.

— Jack

A message from Kawz, founder of Time.fun: