If you want to maximize your profits in this bull market, you must choose the right narrative.
In the last cycle, we saw an explosion of L1, DeFi, and Metaverse category tokens, and in this cycle, institutions are pouring money into these narratives.
We have the opportunity to enter the market early, and in this article I will introduce the sub-narratives of each industry in the bull market and why these verticals are worth paying attention to. Of course, I am also interested in other areas, but this article will focus on the major trends that are particularly prominent.
The reason I chose these narratives is that I believe they are still in the early stages of the hype cycle. After all, identifying when a narrative is in its early stages is an important skill to have in the cryptocurrency space.
1.FromPIN
DePIN stands for "decentralized physical infrastructure", a blockchain protocol that incentivizes decentralized communities to build and maintain physical hardware. Users who invest resources to contribute to the network will receive corresponding token rewards.
The DePIN space is broad and covers multiple multi-billion dollar hardware sectors:
Cloud Storage
Calculate ability
Wireless sensor networks, etc.
Messari predicts that the total market value of these DePIN industries will reach $3.2 trillion by 2028.
Existing products such as RNDR, FIL, AKT, etc. are representative projects of current solutions, and there are many interesting upcoming solutions such as AethirCloud.
2. Artificial Intelligence
2023 is a breakout year for the artificial intelligence (AI) industry, with more than $50 billion in new investments flowing into the sector.
Venture capital investments related to AI in 2023 are expected to reach $50 billion, and even that only scratches the surface of AI’s potential.
As AI continues to advance exponentially, it’s both scary and exciting to imagine what the next 2-3 years will hold (let alone 10).
Cryptocurrency and AI have yet to fully find their feet, and many current solutions are simply using AI as a buzzword and treating it as an AI proxy (trading around big events/hype) rather than a long-term fundamental investment.
However, AI and cryptocurrency may intersect in many interesting ways in the future:
• A cryptocurrency-driven reputation system for GPU leasing;
• AI bots for trading and forecasting;
• Blockchain-based incentives for AI training;
• Digital Media Certification;
Kyle Samani also wrote a great article detailing the potential intersection of AI and crypto, expanding on more potential use cases. (Fun fact: he wrote most of the article using AI).
I strongly believe that some of the best performers in this cycle will be AI tokens. My current strategy is to trade AI tokens as a proxy around major events like conferences/press releases/announcements, but I have a fair portion of my stablecoin allocations set aside for new AI projects.
3.RWAs
Real World Assets (RWAs) have been gaining a lot of momentum lately, especially after the endorsement from BlackRock CEO Larry Fink. After all, when the CEO of the world’s largest asset management company has repeatedly advocated for asset tokenization, it’s hard not to be optimistic about RWAs.
RWAs refer to the tokenization of real-world assets (such as real estate, treasuries, bonds, gold, etc.) on the blockchain.
This will increase:
efficiency (lower costs by eliminating the need for brokers);
accessibility (fragmentation and more mobility);
RWAs have access to huge markets such as real estate ($326 trillion), global bonds ($124 trillion), and gold ($12 trillion).
I’ll be releasing a full in-depth topic on RWAs (and my favorite altcoins) in the coming weeks.
4. Games
When I think about industries that could truly attract millions of new retail users, the first thing that comes to mind is gaming.
It’s also one of the most well-funded crypto sectors, with over $14.4 billion raised since 2019, with the majority of investment inflows into crypto games coming in 2021/2022.
Games take years to make, so we're only now starting to hit the development inflection point.
We will likely realize the true size of this funding through a flood of new quality games between 2024 and 2026, and crypto gaming adds two very important verticals to traditional gaming:
Ability to have real, verifiable ownership of game assets;
Ability to financially reward/benefit game users rather than purely siphoning away liquidity in a closed in-game economy;
When investing in the gaming sector, I like to take a layered approach, in order of weighting:
Game infrastructure: L1 and L2, SDK, etc.
Game Studio: Provide multiple game experiences simultaneously;
Individual games: highest returns, highest risks;
5.BRC-20
Since its launch, BRC-20 tokens have continued to rapidly gain traction, creating demand for block space and bringing new use cases to the Bitcoin blockchain.
First, what are BRC-20 tokens?
Inscriptions are data attached to satoshis (the smallest unit of Bitcoin), and "BRC-20" refers to an experimental standard for attaching JSON codes to sats based on inscriptions.
Despite being in the experimental stage, BRC-20 tokens have a market cap of over $2.5 billion. As the Bitcoin story heats up with ETFs and the upcoming halving, BRC-20 tokens are poised to benefit.
The BRC-20 ecosystem is still relatively nascent and lacks quality infrastructure, I have made a small bet in this space and have been keeping an eye on new projects. With many upcoming products, there are also a lot of airdrop opportunities.
6.Restaking
I see Restaking as a new version of the DeFi Ponzi scheme from the previous cycle.
During the 2021 bull run, we witnessed an insatiable search for yield due to bullish market sentiment, and if we enter a broader bull run (as I expect), expect the demand for yield to return.
We’ve already seen early signs of this happening, with the EigenLayer airdrop being a major catalyst for the sector.
So, what is Restaking?
In short, it allows you to reuse your already staked ETH in multiple other protocols. This allows you to stack your earnings on top of your primary ETH earnings and gain access to protocol airdrops.
EigenLayer is the middleware that pioneered the concept of re-staking, but interestingly, most of the re-staking is actually the corresponding points system.
EigenLayer will be one of the largest airdrops in 2024, which is why more than $1.4 billion in funds are locked on the platform (Foresight News note, more than $3 billion as of the time of writing).
7.ZK
ZK technology is one of the biggest cryptographic innovations of the decade.
It is a type of cryptography that can prove the validity of a message without revealing any identifying details.
ZK helps:
Reduce network congestion (helps scalability);
Add privacy protection elements to support new types of applications;
Enhanced cybersecurity;
Many projects are now leveraging ZK technology, including Linea, zkSync, Manta, Polygon, etc.
While scalability has been one of the more prominent use cases, ZK proofs have applications in many verticals.
An interesting example is Chainlink’s “DECO” project, which uses ZK proofs to ensure tamper-proof content transmission across Internet protocols.
Decentralized identity oracles like zkMe are another important use case, especially for KYC and AML compliance.
Many new use cases are unlocked due to the introduction of ZK technology.
The above are the 7 sectors that I think are most suitable for the bull market.