That is a segment from the 0xResearch newsletter. To read stout editions, subscribe.

We saw a sea of purple in crypto as markets went chance-off on weakening macro, with the Balancer exploit likely exacerbating the switch. On a brighter existing, BTC miners IREN and CIFR rallied after unveiling huge HPC deals, posting exact gains on the day.

We dig deeper into why SOL is trading weakly, with diversified ecosystem tokens device all-time lows, and whether or no longer there are reasons to be optimistic.

Indices

Markets changed into chance-off as crypto underperformed broader resources. Gold (+0.5%) changed into as soon as the day’s most full of life gainer, whereas BTC (-0.9%) slipped alongside extinct benchmarks, with the S&P 500 (-0.3%) and Nasdaq 100 (-0.1%) each decrease as investors turned around defensively.

The day’s weakness across crypto markets likely shows tightening monetary situations, with merchants waking as a lot as a more hawkish Fed tone, a strengthening dollar (DXY drawing shut 100), and a rising US 10-twelve months yield nearing 4.1%. The October ISM Manufacturing print came in at forty eight.7, highlighting extinct underlying financial process (<50 contraction) and likely contributing to the broader chance-off tone.

While the Balancer exploit additional undermined sentiment in direction of crypto, losses own been big-based and steepest in excessive-beta sectors. L2s fell 14.0%, adopted by Ethereum (-13.6%) and Solana ecosystems (-13.2%). DeFi (-11.1%) and L1s (-7.9%) also lagged, with REV down 4.2%.

All eyes now flip to drawing near near ISM Products and services PMI, US unemployment and payrolls and CPI over the arriving days and weeks, with these releases likely to living crypto’s subsequent leg — whether or no longer a deeper pullback or a push bigger.

Market Substitute

IREN shares jumped 11.5% the day earlier than at the moment on the Microsoft deal, underscoring how markets like contracted AI earnings in space of hash imprint beta. Microsoft’s 5-twelve months, $9.7 billion agreement with IREN marks no doubt doubtless the most clearest examples of hyperscalers tapping BTC miners’ energy dense campuses for AI. The deal presents Microsoft score admission to to Nvidia GB300 potential, involves ~20% pay as you stride capital to IREN, and is tied to original liquid-cooled carry out-outs at IREN’s 750MW Childress campus that heart of attention on ~200MW of severe IT load. Cash from Microsoft’s department will support finance GPU purchases. Rate that IREN devices itself aside from other transitioning miners by specializing in working its own GPUs, positioning as a cloud compute provider in space of colocation model.

Cipher’s AWS deal and original 1GW Texas campus drove a 22% jump within the stock, as investors welcomed the sure strategic direction and rising momentum on the attend of its AI pivot. The corporate signed a 15-twelve months agreement valued around $5.5 billion to present roughly 300MW imperfect potential for AWS’s AI workloads. Rent is made up our minds to launch in August 2026 as original amenities come online. Cipher also offered a joint project to carry out a 1GW campus in West Texas, a smartly suited situation for HPC as a result of its scale, fiber diversity and dual grid connections.

Collectively, these deals illustrate how BTC miners are being drawn into the broader AI infrastructure buildout. Markets now acknowledge that miners are ready to exact long-timeframe web web location hosting agreements with hyperscalers and can generate steadier, more predictable earnings than being arena to BTC hash prices. Core Scientific’s 12-twelve months partnership with CoreWeave and TeraWulf’s most modern 25-twelve months contend with Google-backed Fluidstack spotlight the an identical dynamic, each prompting exact market reactions when offered. Miners will likely proceed evolving into key avid gamers within the HPC ecosystem, as the economics of AI web web location hosting remain some distance more truthful than these of extinct bitcoin mining.

Solana’s tension: Community performance vs. price take hold of

Of the precious crypto resources, SOL is the appropriate one that’s trading below its Oct. 10 liquidation wick low, with diversified Solana ecosystem tokens sitting at or device all-time lows. What can showcase this relative weakness, and are there reasons to be optimistic?

Let’s launch with institutional flows. The sail of purchases from Solana DATCOs has slowed critically, with 1.92 million SOL purchased in October vs. 9.84 million SOL in September. The chart below reveals that the 5 ideal SOL DATCOs are all trading at a carve fee to excellent mNAV as of Nov. 3, drastically tightening their financing situations. FORD, the ideal SOL DATCO with 6.28 million in token holdings (~$1 billion), is trading at a puny carve fee to mNAV (0.91x). However, peers are trading at mNAV ratios between 0.3x and 0.7x, introducing the chance that plenty of these DATCOs pursue a same technique to the one employed by ETHZilla, which sold approximately $40 million of its ETH treasury holdings to repurchase shares till its carve fee to mNAV is normalized.

No topic DATCO headwinds, ETF flows own surprised to the upside. The Bitwise SOL staking ETF (BSOL) started trading final Tuesday, seeing immediate success. BSOL led all crypto ETPs in weekly flows final week, with $417 million. As of Nov. 3, BSOL had $420 million in AUM, surpassing SSK’s $388 million decrease than a week after launching. Besides to, the Grayscale Solana Belief ETF (GSOL) launched on Oct. 29, with $88 million in AUM as of Nov. 3.

Below, we spy SOL ETF flows by issuer. Rate that the chart excludes BSOL’s seed quantity of $220 million and GSOL’s seed of ~$100 million.

While institutional speed for meals is excessive, Solana’s underlying fundamentals are displaying blended signals. Starting up with the negative, Solana’s True Economic Rate (REV) amounted to $41 million in October, the lowest figure since February 2024. Solana changed into as soon as the fourth-easiest chain by earnings market portion in October, ending a droop of twelve consecutive months as both first or 2nd. The chart below reveals that Hyperliquid changed into as soon as the leading chain by earnings ($105 million) final month, adopted by BNB ($77 million) and Ethereum ($65 million).

Solana’s reduced price take hold of is particularly evident when contrasted with application earnings on the chain, which has remained more resilient at $92 million, although quiet down drastically from the January highs. Notably, Pump accounted for 50% of total app earnings on the chain, with October marking the 2nd consecutive month that Pump has surpassed Solana in monthly earnings, despite Pump being valued at below 2% of Solana’s market cap (5% if fully diluted). For sure, that is an apples-to-oranges comparison, nonetheless it completely does set aside into context the size of Pump’s numbers to boot to Solana’s nice looking decline in price take hold of sometime of the final twelve months.

REV and token holder earnings falling to phases no longer seen since 2024 raises questions concerning the network’s ability to take hold of price. That acknowledged, reduced price take hold of is also a characteristic of improved network performance, and users no longer overpaying for transaction inclusion. Shall we order, take into story Solana’s performance sometime of the Oct. 10 liquidation cascade.

While CEX performance changed into as soon as throttled on Oct. 10, particularly for perpetual futures, several onchain techniques kept working as supposed. Solana performed drastically better than Ethereum and the precious L2s sometime of this volatility occasion. The chart below compares Solana’s median fee to that of Ethereum, Arbitrum, and Fallacious sometime of Oct. 10 (UTC time). We stare that Solana’s median costs hovered around $0.0012, spiking to $0.0056 at top volatility (5x), normalizing to pre-liquidation phases rapid.

On the different hand, Ethereum, Arbitrum, and Fallacious saw exponentially better spikes, with median costs remaining abnormally excessive for hours following the liquidation cascade:

• Fallacious median costs spiked from $0.004 sooner than the volatility occasion to $4.6 at top (1,200x).
• Arbitrum median costs spiked from $0.01 sooner than the volatility occasion to $117 at top (12,000x).
• Ethereum median costs spiked from $0.34 sooner than the volatility occasion to $220 at top (650x).

TPS paints a same image. We spy that Solana’s TPS changed into as soon as hovering around 1,000 sooner than the volatility occasion, rising to a top of 3,400 after and remaining elevated for the ensuing hours. On the different hand, we stare that each Arbitrum and Fallacious had a serious spike (Arbitrum peaking at ~400 and Fallacious at ~640), nonetheless TPS dropped to pre-liquidation phases within the span of one hour. Ethereum’s case is full of life, in that TPS no doubt reduced sometime of the volatility occasion, suggesting that the network changed into as soon as facing drastically degraded performance.

So, whereas Solana’s price take hold of has indubitably reduced, its network performance has improved dramatically, which on the cease of the day advantages users and capabilities. The work accomplished by Anza, Firedancer, Helius and other infrastructure suppliers has changed into Solana into the most resilient decentralized network in production, which is particularly evident and stressful sometime of this diagram of stress take a look at.