Magic Eden is about to open, and the market is already expecting 40 U?

Author: Cookie, BlockBeats

At 10 PM Beijing time tonight, Magic Eden's Token $ME will open for airdrop claims. Currently, influenced by the news of its listing on Binance, the pre-market trading price of $ME on OKX has surpassed $6, corresponding to a circulating market cap of over $750 million.

The pre-market price can basically reflect the opening price of $ME on CEX tonight, but for a period after the opening, how $ME's price will develop is viewed from three different angles, resulting in three distinctly different scenarios.

Angle 1 - The Second NFT Market on Solana (Benchmarking against $TNSR)

This angle is now largely abandoned, as the circulating market cap of $ME corresponding to the pre-market price has already surpassed the FDV of $TNSR, being about 7 times the circulating market cap of $TNSR.

So why was $TNSR used as a benchmark before? Players who benchmark $ME against $TNSR are likely more focused on Solana NFTs. In the Solana NFT space, Magic Eden has indeed lost its position as the number one NFT market to Tensor.

However, from the statistics of user numbers and trading revenue, Tensor has not formed an overwhelming lead over Magic Eden. In terms of trading revenue over the past 30 days, the two are only $15,000 apart, making it a tie. Moreover, in terms of trading revenue over the past year, Magic Eden even leads Tensor by $3.6 million.

Angle 2 - The First DEX on Bitcoin

Those standing from this angle are primarily players in the Bitcoin ecosystem. Although the general impression is that the Bitcoin ecosystem is mediocre, with only Bitcoin Puppets among the top 10 NFT projects by total market cap, and it happens to be in 10th place, while all the others are ETH NFT projects.

However, for a long time before the recent recovery of ETH NFTs, Bitcoin NFTs might have been the most active NFT ecosystem. Magic Eden holds a monopoly position in this ecosystem; over the past year, only 26% of Magic Eden's 1.5 million users came from the Bitcoin network, but these users contributed over $40 million in revenue to Magic Eden, accounting for 69% of total revenue over the past year.

In the past year, Magic Eden's revenue was $60 million, and this does not even include another monopolistic business of Magic Eden on Bitcoin—Runes tokens.

The Runes protocol is a new Bitcoin FT protocol that launched after the Bitcoin halving in April this year. Magic Eden charges a 1% buyer's fee on Runes transactions, and the total trading volume of the top 10 Runes tokens on Magic Eden is approximately $600 million. Just the top 10 Runes tokens have brought Magic Eden $6 million in revenue over about six months.

So from the perspective of Bitcoin players, Magic Eden is a giant on Bitcoin, and the Bitcoin ecosystem has significant growth potential. In their eyes, expectations for $ME are generally not lower than $6.

Angle 3 - The Second Hyperliquid

This is the most optimistic angle, which posits that "in a bull market, FDV is just a meme; only circulating market cap matters."

The initial circulating supply of $ME is even smaller than that of $HYPE ($ME has only 12.5% initial circulation, or 125 million tokens), and the distribution of tokens is also well done, with strong profitability and growth potential. Based on these three points, the most optimistic group of players believes that $ME should become the second $HYPE, reaching $40.

$ME's profitability in the NFT market is significantly leading, and it is positioned as a DEX on Bitcoin. Over the past year, Magic Eden's revenue, excluding Runes, has already been 20 times that of Blur, while Blur's current circulating market cap is about $760 million. In their respective lanes, both $ME and $HYPE aim to become leaders through profitability and expectations.

However, there are also issues with this angle, as $HYPE operates "in its own space," pulling itself up without being listed on any Tier 1 CEX. In contrast, $ME has already confirmed its listing on Binance, with only Coinbase and Upbit remaining among major CEXs. Therefore, the objective environments for these two tokens are quite different, making it difficult to simply compare and conclude that $ME will rise like $HYPE based solely on circulating market cap.

Conclusion

The above viewpoints are merely observations of market opinions and do not constitute any investment advice. In fact, everyone is looking for a supporting reason for their sell or hold decisions, but whether they can reach the other shore often relies on hindsight's blurry correctness.

I hope the above information can provide some help in finding a suitable $ME strategy for your situation.