A Thesis About The Future
People are not bullish enough about the long term.
When nothing ever happen peaked in sentiment, something did in fact start to happen. A tale as old as time.
Every summer we hope that it is different and it turns out it isn’t. So to begin with to not waste anyone’s time I am going to start by saying this: You’re better off enjoying the summer instead of actively trading this market and chopping yourself up. Don’t lose your mind over a low volatility enviroment that continues to bleed out alts.
However, I know that many people that are still here wants to capture a “bottom” which causes you unecessary stress. Bottoms tends to be formed by large liquidity events that causes liquidations, that doesn’t mean that it reverses immediately. But unless you’re comfortable taking a 20% hit on any token you buy then you shouldn’t buy anything.
In order to buy bottoms you have to be comfortable with prices going lower.
Other things still remain true as well, asset selection will continue to remain as important as ever. We have remained in an environment with few category defining winners in few market sectors with onchain struggling for general liquidity. That likely remains the case unless the money printer goes brrr.
Legitimacy
However, legitimacy is slowly increasing for the industry and as mentioned in the previous weekly article, crypto is not a counter-culture trend anymore. That does bode well for sound protocols with good fundamentals though that have a chance to get re-rated significantly due to CRCL. Might take a while but it bodes well for the future.
Speaking of CRCL, the success of its IPO will likely lead to more interest in crypto businesses from institutions as it is a new emerging vertical for most people that did very well. You will likely see institutional interest skyrocket from here as they attempt to assert their dominance on crypto and capture their share of it, JP Morgan is just the start of it. It’s bolstered by the Genius act that basically was a bill to give banks a foothold of the crypto industry. At least Coinbase and Circle should be very happy, decentralized stablecoins not so much.
Asset selection
Assets worth putting on a watchlist that offers good fundamentals combined with a speculative premium:
AERO - With the ongoing catalysts that has been prevalent for the Base ecosystem and likely continues, Aerodrome will catch the largest net benefit of this and it is something I plan on accumulating over the summer.
ZEX - CLOB (Central Limit Order Book) DEX are increasing in mindshare and has been a long time coming conisdering it is a market sector we haven’t had the infrastructure to build for previously. But as the industry is growing and maturing it is natural for people on DEXs to want to trade with order books instead of the DEX UX we have grown accustomed to for so long.
BID - The speculative premium of AI tokens remain ever so high and the Creator Bid ecosystem is something that has been growing in stature over the past months. Considering the growth in attention of AION and DKING outside of crypto, these agents likely will bring more attention to the whole ecosystem that is good for the BID token as finally act as viable competition for VIRTUAL which should bring the general quality of agents higher in both ecosystems considering VIRTUAL is preparing for the launch of ACP (Agent Commerce Protocol) as well.
SYRUP - Institutions love yield and it is the best way to get exposure to BTC yield right now as they continue to increase their market share. Especially in a market that been BTC focused since it started. syrupUSDC is also the highest yielding stablecoin in the market. As always these things always come with risk so act accordingly.
I’ll start with these for now so I don’t overwhelm anyone with tokens, but each of these tokens gives you a rough exposure to different market sectors depending on what is capturing significant mindshare at the time. ZEX is the most speculative token out of these (not necessarily a bad thing) while the other ones have good tokenomics built into the ecosystem.
Just as the fundamentals are important so are the token holders and the cult aspects of it, this can normally be monitored by how easily people are shaken out during red days. All of these token have held up better than most during the latest market sell off indicating that most people holding these believe in what they are holding and view their sell targets much higher.
There are some memes that standout to me but don’t planning on covering it in this post because it would take away from the message and most of it is more about luck.
Unless you are willing to hold something for the long term that has a good team and strong fundamentals (or the potential for it), it is all momentum and you’re better off sizing into the fastest horses. In an ideal world you will find both of these worlds intertwined.
Pendulum Swings
Lastly, the pendulum normally swings hard in each direction. So in 2020-2021 people genuinely believed in the technology and where it was going whereas this “cycle” people stopped belieivng in anything and just traded pure vapor to make money. The truth lies somewhere in the middle and the fact is that vapor and memes did so well because this bull market came to early for DeFi that was still struggling at the back of hacks and SBF in 2023. Due to this there were only memes and AI that caught fire as most of DeFi wasn’t investible at that stage barring a few outliers.
However, there has many teams that have been building diligently over the past few years as the tech stack has been catching up to the primitives people have been wanting to build. Still, it is still just as important to be able to tell a story. You might build something fascinating but if you can’t get it out there in front of people then no one will try it or buy the token associated with it. If you can do both, then you’re in the money.
Thus, my thesis is that the next bull market actually will be dominated by new primitives and good DeFi technology again as liquid funds and instituions will want exposure to these new verticals. Especially as the goal is to bring increasingly more financial assets on-chain that are tradeable for everyone (the RWA sector is a prime example of this even if it has been too early for most of it to materialize yet. The interface people do that on will become increasingly important. In a similar mold how Aerodrome is capturing volume from Coinbase and the value every institutional relationship that is built by Coinbase that brings a new partner on-chain.
Also I want to end this by being clear with saying that I am naturally an optimist and I never see the benefit of being overly negative about things. Tailwinds might be rough and there are more important things going on right now such as a war but being negative and praying on the downfall of something has never sat right with me and is not good for your spirit.
If the market is getting you down, you are better off taking some time in the sun and enjoy valuable time that you have with your loved ones. You don’t get time back. But the future for the crypto industry is bright even if some weeds have to be removed along the way.
Stay patient optimistic and I truly believe it will pay off.
I hope you enjoyed the post. Don’t forget that you are more than welcome to leave feedback or drop any questions in the comment section.
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Disclaimer: All Content on this site is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing on the site constitutes professional and/or financial advice, nor does any information on the site constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. I am just sharing my opinion. This post may contain affiliate links.