The second quarter saw three tokens – Brett (BRETT), Ton Network’s TON, and Kaspa’s KAS – emerge as shining stars as crypto market leader Bitcoin (BTC) weakened, dragging most major digital assets, including Ether (ETH), down.
BRETT, a memecoin native to Base Chain and inspired by the character Brett from the Boys’ Club comic series, has doubled in price to over 16 cents, becoming the best-performing digital asset among the top 100 coins by market value.
BRETT 1-day price chart. Source: TradingView
Toncoin (TON), the native cryptocurrency of The Open Network (TON), a decentralized, layer 1 network commonly known as the TON blockchain, rose 42% to $8, and KAS of the Kaspa blockchain rose more than 35%. Meanwhile, the total cryptocurrency market capitalization fell 13.8% to $2.2 trillion.
TON 1-day price chart. Source: TradingView
Here are some reasons why these coins stand out from the rest of the market.
Meme fever
BRETT’s rise is not an isolated event but part of a broader trend of memecoins. The Dune-based cryptocurrency relative strength tracker shows that the memecoin subsector has gained more than 45% in three months while others have lost money.
Memecoin is the best performing sub-sector over the past three months. Source: Dune
Mog coin (MOG) emerged as another high-performing asset thanks to positive sentiment and a large following on social platforms like X. MOG’s market capitalization skyrocketed from $220 million in early April to over $700 million, quickly breaking into the top 100 tokens by that metric.
MOG 1-day price chart. Source: TradingView
This performance is typical of a bull cycle where investors rotate profits from larger coins like bitcoin to smaller tokens like memecoin, fueling price increases and retail investor FOMO. In other words, memecoin’s fate is tied to investor risk appetite and access to credit.
BRETT began its meteoric rise in May after Bitcoin began consolidating around $70,000 and at one point saw its market cap approach the $2 billion mark.
“The $2 billion mark is the liquidity wall that many established memecoins hit before profit taking and sideways volatility sets in. Of course, for every $1 billion from there, it will take a lot of retail momentum and risk appetite (aka Apes) to get these memecoins to DOGE and SHIB levels. Let’s see what Degens can do next in this bull market cycle,” said Kenny Hearn, chief investment officer at SwissOne Capital.
Hearn added that SwissOne’s top 50 smart passive index fund holds the six largest memecoins in its portfolio after a rebalancing this quarter.
TON and Telegram
TON’s rise stems from the project’s involvement with cloud-based messaging app Telegram, which boasts 1.56 billion users worldwide and 800 million active users.
“The Toncoin (TON)-based economy is starting to take root within the Telegram messaging app,” TON chief investment officer Justin Hyun said in April.
Several catalysts have driven TON adoption, including Telegram’s decision to accept TON for advertising payments and its Open League rewards program. TON’s network activity has also been boosted by the integration of Tether (USDT), the world’s largest dollar-pegged stablecoin, and the launch of Telegram-based gaming’s digital token Notcoin.
TON’s daily active addresses rose to nearly 600,000 in June, surpassing Ethereum, the world’s largest smart contract blockchain, home to prominent DeFi projects worth billions of dollars.
“TON’s daily active users (DAU) surged in Q2, even surpassing Ethereum. This growth was driven by the launch of mini-apps, which are decentralized applications embedded in the Telegram messaging app. Notcoin, one of these apps, gained significant attention because users could ‘mine’ Notcoin with the push of a button in Telegram,” said Katie Talati, research director at Arca.
Talati also noted Pantera’s recent “largest investment ever” in TON:
“Other important catalysts include the launch of USDT on TON, with approximately 550 million USDT currently on the network, positioning it for payment purposes.”
KAS Solves Blockchain’s Hard Problems
According to Hearns, KAS’s native Proof of Work (PoW) blockchain, Kaspa’s efforts to solve three blockchain pain points have helped the token gain investor attention.
KAS 1-day price chart. Source: TradingView
These three conundrums refer to the trade-offs between three key aspects of blockchain technology: scalability, decentralization, and security.
Kaspa’s GHOSDAG introduces a novel transaction processing method that moves away from the typical sequential processing model of traditional blockchains. Instead, it leverages an asynchronous and parallel processing method. This groundbreaking design aims to improve both the performance and security of the blockchain network, while still maintaining the strong security of the Proof of Work (PoW) consensus mechanism.
In traditional blockchains, transactions are processed sequentially, with each block building on the previous block, forming a linear chain. This sequential nature sometimes leads to bottlenecks and slower transaction times, especially during periods of high network activity.
In contrast, the GHOSDAG architecture used by Kaspa allows transactions to be processed in a more asynchronous and parallel manner. DAG stands for Directed Acyclic Graph, which means that instead of a linear chain, transactions are structured in a graph form, allowing multiple transactions to be confirmed simultaneously.
The benefits of this method include:
- Improved Performance: By enabling parallel processing, GHOSDAG can handle a higher transaction throughput than traditional blockchains. This can lead to faster confirmation times and better scalability.
- Enhanced Security: Despite its asynchronous processing, GHOSDAG maintains the security of the blockchain network through its underlying PoW consensus mechanism. This ensures that the network is always resistant to attacks and maintains the integrity of transactions.
- Scalability: The DAG structure naturally supports scalability by distributing work across network nodes more efficiently. This can help the network grow and handle increased transaction volumes without sacrificing performance or security.
“It seems like this team is on a mission to solve the pain point (scale, speed, security) through a DAG structure vs. blockchain (which supports speed and scalability) while using the security benefits of POW (which supports security). It seems like the market is very supportive of this innovative technology,” Hearn explained.
The KAS token also received a bullish boost from the announcement by listed Bitcoin mining company Marathon Digital that it has started mining KAS to diversify its revenue streams.
What is next?
The third quarter is traditionally the weakest, with Bitcoin averaging just 5% gains over the past 13 years compared to 60% gains in both the second and fourth quarters.
Following incumbent US President Joe Biden’s recent poor performance in the presidential debate, Democrats are likely to replace him with a candidate strong enough to counter crypto-friendly rival Donald Trump.
That could dampen market sentiment until the November 4 election. In addition, the Fed and other central banks may heed the BIS’s advice not to ease monetary policy too soon.
However, well-established crypto subsectors may continue to stand out.
“The long-term play is key for many projects that are quietly building fundamentals and delivering real use cases,” Hearn added. “We note that ONDO, JASMY, and ENS fall into the category of solid, growing user platforms.”
Arca’s Talati says Bitcoin mining stocks, artificial intelligence, gaming and DeFi sectors could see growth.
Itadori
According to CoinDesk
