2024 started with fireworks. All the hype and drama around the BTC ETFs, the soaring prices of most cryptocurrencies, and the hope for the start of a massive bull run. However, there are things you need to know in order to prepare for the next bull market.
Crypto Cycles
As you may know, the crypto market always evolves in cycles, specifically 4-year cycles dictated by the Bitcoin halving :
With 2 years of a bull run and 2 years of a bear market. I believe that right now we are at the beginning of the bull run. So, any good investor needs to have a plan and not FOMO into some low caps because it has pumped.
That’s why my favorite plan for a diversified and performing portfolio is to invest in narratives that have great potential for the bull run.
Crypto Narratives
Before we start, we gotta know what a narrative is :
Narratives in cryptocurrency refer to the trending ideas, stories, or beliefs that shape how people perceive and value cryptocurrencies. These narratives can influence investor sentiment, market trends, and the adoption of new technologies.
Each crypto cycle has its own narratives. We can talk about DeFi in 2021, play-to-earn games like Axie Infinity. Before that, there were ICOs with projects like EOS, Ethereum, Polkadot, or even Tron.
As you can see, ICOs were a thing before the bull run. (If you look closely, you will find some very famous projects like Ethereum, Polkadot, or Tron).
However, the bull market amplified the narrative, just like it did for NFTs, the DeFi industry, or the Metaverse in the last cycle. We can take Axie Infinity or StepN, for example.
To illustrate my claim, we can look at the chart of Mana. Decentraland is a decentralized metaverse built on Ethereum. As you can see above, in the span of 5 weeks, Mana made a X7 performance!
That mostly happened because of one major thing : the rebranding of Facebook to Meta, making the metaverse narrative a huge publicity.
Surfing the narratives
Now that we’ve seen the importance of following the narratives to achieve the best performance possible without adding unnecessary risk, let’s look into how to find those narratives :
- Social Media Hype :
Most of the time, we first hear about a project on social media. Think about it, where did you first hear about Bitcoin, Ethereum, or Bittensor ?
If a project has a lot of hype, it’s great for the token, especially during a bull run where newcomers will buy whatever they see on the internet, no matter if the project is legitimate or not.
- Look Outside of Crypto :
If we look at our everyday lives, what has changed in the last few months ? Artificial intelligence. It’s everywhere, in the news, in our conversations, everyone with an internet connection can use it.
When you look at the stock market, Nvidia has made the news for their outstanding revenues that made their stock skyrocket. All of this is due to the explosion in demand for Graphics Processing Units (GPUs) that have a link with AI because they are needed for deep learning.
NVIDIA Performance (Arithmetic)
Identifying real crypto projects that are into AI and GPU, such as Bittensor, Render Network, and Akash, is key to investing in those narratives.
- Inform yourself :
If you’ve been following the crypto news in the last few months, you may have heard about Real World Assets (RWA) and their possible tokenization into the blockchain.
In reality, tokenization is a subject that is very ancient. Chainlink has been working on it for a long time.
You can only know that if you inform yourself, by asking yourself the right questions :
What does this project do ?
Can this tech have a huge impact for individuals around the world ?
Some Interresing narratives
With what I’ve seen so far, there are a few very promising narratives to keep an eye on :
- Decentralized Physical Infrastructure Networks (DePin)
- Artificial Intelligence (AI)
- Tokenisation of Real World Assets (RWA)
- Ethereum and Bitcoin layers 2
I’ll go into details of each narrative in other articles that will be dedicated to that.
As always thank you for reading !
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Disclaimer : This is not a financial advice, you need to do your own research !
