Cryptocurrencies trade 24 hours a day, seven days a week and that can lead to some wild moves at odd times. In particular, weekends have been times of high volatility, especially ahead of a holiday week. Since Friday's stock market close, there are over a dozen cryptocurrencies up double-digits.
Some of the biggest movers are relatively small tokens that are built to provide real-world utility, not just memes. Uniswap (UNI 2.36%) has risen 12.6% since Friday's market close, Chainlink (LINK 1.54%) is up 11.8%, Fantom (FTM -6.18%) jumped 39.9%, and Sei (SEI 2.49%) is up 33.5%.
The regulatory posture is taking shape
Over the weekend, President-elect Trump announced hedge fund manager Scott Bessent as his next Treasury Secretary. He has been known as being pro-crypto and said recently that he's excited about the freedom of crypto and young people's adoption of it.
The Treasury Secretary will play a key role in how the traditional banking system interacts with the crypto industry. Investors have been bidding up crypto after Trump's election on the hope he would implement pro-crypto policies, and this may be the most concrete example of how things are changing.
Utility blockchains gain momentum
The meme trade has been popular over the last few weeks, but this weekend the biggest movers are built for utility. Uniswap is one of the leaders in token exchange, Chainlink is built to provide utility to finance, Fantom is built for low fees and highly scalable decentralized applications, and Sei's main use case is high-frequency trading.
Not coincidentally, these are all blockchains built to make financial transactions faster, more cost-efficient, and more transparent. But it would have been hard for any true innovation to take place with an administration hostile to crypto. The leaders taking over may create an environment that will allow innovation using the blockchain.
Speculation is still running rampant
What's missing in most of the discussion of this crypto trading is how the tokens themselves will generate value from more usage and innovation on their blockchains. It's unlikely the Sei and Fantom tokens will be the medium of exchange for financial transactions. That medium has been stablecoins for a growing number of transactions with the blockchain being rendered almost a commodity.
In that sense, the moves this weekend are purely speculative, even though the blockchains themselves are built for utility.
Where does crypto go from here?
The initial trade after the election was the major tokens, then came meme coins, and now utility tokens are taking the momentum. What's less clear is exactly how these tokens will win beyond further speculation that there will be more buyers in the future.
I am bullish on the blockchain but tend to think the current trading is unsustainable. There's a lot of speculation based on nothing more than traders' momentum and feelings about what might happen. But we're no closer to cryptocurrencies being an everyday transaction medium than we were a few months ago. Until that changes, I'm skeptical these moves will last.
