DEEP DIVE

The best crypto narratives for 2024

The world is undergoing a rapid shift to a new financial system. According to Coin Gecko, there are 343 crypto narratives currently in the market.

Today, I want to share with you the top 5 to look out for 2024.

1 - Decentralized AI

At the top of the list is a field that shouldn’t be surprising. With the advent of ChatGPT, the world has been invigorated with a new technology and capabilities. However, a looming danger remains.

The threat of centralized control.

“Who owns the models?”

“Who decides what data to train them on?”

“Who determines if certain data is valid or ‘misinformation’?”

These are some of the many important questions to answer in this field.

One thing remains clear - as a civilization-changing technology, we need to democratize access to it. If not, we are at risk of being enslaved by the megalithic companies that are trying to monopolize and control this force.

Decentralized AI is what happens when you combine the decentralization principles of Crypto and Web3 with the data and infrastructure needs of AI.

Projects such as BitTensor and BasedAI are working on this problem, building cutting edge protocols for the future by creating an open platform for building and accessing AI models.

2 - Decentralized Physical Infrastructure (DePIN)

DePIN is a similar category to the one above. It focuses more on connecting GPUs and other computing resources (such as storage) to provide a computational base for AI and all the other software applications.

These projects are competing with large hyperscalers such as Amazon Web Services and Google Cloud.

Notable examples here are Render Protocol (RNDR), Arweave (AR), Filecoin (FILE) and Peaq Network (PEAQ).

3 - Real-World Assets (RWAs)

Also referred to as “Tokenization”, this narrative refers to the large swathe of financial instruments and assets that are currently not on a blockchain.

Reminder: A blockchain is a new way of storing data that’s decentralized, publicly accessible and open 24/7(usually).

Black Rock have recently come out with their BUIDL fund, an on-chain fund to invest in RWAs.

RWAs refer to things such as traditional stocks & equities, real estate, digital products, etc.

Projects to watch here are Ondo Finance (ONDO), Parcl (PARCL) and Landshare (LAND).

4 - Web3 Gaming

Web3 gaming has had an incredible journey these past few years. It got kicked off with the massive run of Axie Infinity in 2021 where it went from a price of around $0.50 at the end of 2020 to $137 just 12 months later! In addition, in-game mechanics allowed early players to benefit from this growth by creating assets to be sold to new incoming players.

Since then, we’ve had multiple iterations and variations of games leveraging web3 tokens and blockchains. The results are shocking, as those designed with poor tokenomics undoubtedly failed.

That being said, the opportunity has arrived. Gaming studios with top tier talent from the web2 industry have been working for years on some amazing AAA titles. Their usage of blockchain and tokens are well-thought out and with the invention of smart-contract wallets, a lot of the clunky user experience that has been a trademark of crypto is now being phased out for a familiar web2 login/ signup experience.

If gamers can play a web3 game but it feels like web2 to them, then mass adoption is around the corner. After all, Web2 gaming sits at ~$273 Bn, whereas Web3 gaming is sitting at just under $20 Bn.

Many crypto thought leaders also believe that gaming is the secret “killer-app” of blockchain.

It will lead to mass adoption as gamers are tech savvy and used to operating with software based wallets holding a variety of tokens.

There are some really good games coming out this cycle - I’m watching Gunzilla, BloodLoop, Nyan Heroes, Off The Grid, Engines of Fury and Heroes of Mavia.

Have you had any experience playing web3 games?

5 - Memecoins

Memes are the ultimate gamble play.

They started when a developer forked the Bitcoin blockchain, removed the hard cap on supply, and used a picture of a dog. Thus the first memecoin DOGE was born.

Since then, there has been many innovations in the memecoin space. Most have resulted in failing projects but there are a select few that have succeeded and had incredible returns.

If memecoins have no inherent value, why do people trade them?

Well obviously because there is some value to having fun. We all pay for entertainment and recreation at some point in our lives, and memecoins often fall under the entertainment category than the serious investment one.

In addition, the simplistic nature of the coin coupled with no venture capitalists ready to dump their bags on you makes this appealing to the everyday investor, the “normies” as we are called.

Memecoins have proved their worth this year, coming out at #1 as the most profitable narrative of Q1 2024. According to Coin Gecko, the category had average returns of 1,312% whereas the second place (RWAs) came in at 285%. AI placed 3rd at 222%.

One can see that memecoins are in a league of their own.

However due to the ease of creation and the simplicity of the coins themselves, it has become too easy to create memcoins - and we are thus flooded everyday with new kinds. Because of this, we can expect this category to have the highest failure rate.

However, if you pick a winner, its the blockchain equivalent of winning the lotto. Coincidentally, “Memecoins as the new Lotto” was a thesis presented recently by a well known hedge fund.

Either way, memecoins are the most risky field and you can expect 99 out of 100 to go to zero in a few months.

However, there is also the trend for each blockchain to have its own memecoin as the mascot of the blockchain. So there’s a few memecoins I’m keeping on my watch list - PEPE, BRETT, FOXY and of course HarryPotterObamaSonic10Inu (BITCOIN)

I know this might seem confusing at first. But the more research you do, the more comfortable you will be understanding the large moves of capital in the market and to position yourself accordingly.

Trading and investing is not so much about being absolutely certain that the coins you pick are going to be winners. Instead, it’s about thinking in probabilities and risk and apportioning your wealth so you may take controlled, risk-adjusted bets. And given enough of these bets, your portfolio will grow.

Study well, invest slowly and you will get there.

WORDS OF WISDOM