Translation:
Coinworld News Report:
The first half of the year of 2024 is coming to an end in the correction and consolidation of the cryptocurrency market. In this cycle, BTC has quickly risen due to the impact of ETFs, while the performance of altcoins has been relatively average, leading many retail investors who have shorted BTC to complain about a lack of participation.
As the market continues to correct and consolidate, especially with many altcoins losing almost all their gains from the past six months, new opportunities may be quietly brewing.
This article combines market hotspots and insights into future trends to take stock of the tracks and targets worth paying attention to in the second half of the year. The views expressed in this article only represent the current ideas.
0
1
Macro Perspective: Bull market is likely not over, risks and opportunities coexist
In the initial stage of this cycle, the three core drivers of ETFs, BTC halving, and interest rate cuts have already become well-known.
From the October incident last year when a well-known media outlet reported the “approval of ETFs,” to the official approval of BTC ETFs in early January, the expectation gap for ETFs has dominated the direction and game of the entire market.
The BTC halving in April did not cause significant fluctuations in the market due to the influence of geopolitical conflicts at the time.
With the landing of the first two core drivers, it is difficult for them to become the fuel that ignites the market in the future.
Therefore,
Speculation surrounding interest rate expectations and the improvement of liquidity due to interest rate cuts will be the biggest external driving force for the future outbreak of the cryptocurrency market.
For most cryptocurrency investors, perhaps making short-term profits by waiting for the release of core data is not the main way to profit. Therefore, it is only necessary for us to clarify that
In the longer term, the market still has interest rate benefits to look forward to, which is enough to indicate that the bull market is likely not over. Corrections and consolidations mean the emergence of opportunities.
Comparing the range of consolidation in this cycle with the previous one, we can see that the current BTC seems to show a frightening “M-top” in terms of technical patterns, but the extent of the correction is far less than the over 50% correction after the first high in the previous cycle, and the consolidation time is also far shorter than the last one.
From a risk perspective, the depth of BTC’s correction is relatively smaller compared to the previous cycle and may further test lower support levels in the case of additional external negative factors;
From an opportunity perspective, the short and small formation of the “M-top,” the existence of interest rate expectations, also indicates that the market is very likely still accumulating energy for the next climb, and the market has encountered support around 55,000.
Long-term opportunities are likely to exist, and the cost of chips and the preservation of principal will be the determining factors for the next wave of returns.
Source: https://www.tradingview.com/chart/mBmRDBZW/?symbol=BINANCE%3ABTCUSDT
0
2
Meme: The most promising track of this cycle
2.1 Track background and core logic
The wealth creation myth of Memecoins like $DOGE and $SHIB has been enduring in the industry and has also provided a chance for many users to enter the crypto world.
In this cycle, the position of Memecoins has been further highlighted, both in terms of asset market capitalization and trading volume, and has gradually become one of the core tracks in the crypto industry.
The total market capitalization of Memecoins has exceeded $50 billion, with a trading volume of over $4 billion.
From the ranking of Memecoins, we can see that the memes that come after $DOGE and $SHIB are the new stars of this cycle, further confirming the outstanding performance of Memecoins in this cycle.
Source: https://www.coingecko.com/en/categories/meme-token
In terms of return rate, Memecoins also have the highest overall return rate, surpassing popular narratives such as RWA, AI, and DePIN.
Source: https://mp.weixin.qq.com/s/uy6y45d9rinmxkoCj7d1EQ
The main reason why Memecoins have been sought after by investors in this cycle is that the odds of Memes are relatively better.
Retail investors are more likely to obtain early chips:
With the expansion of the primary investment market in the cryptocurrency industry, the increase in project valuations by VC institutions has squeezed the profit margins of retail investors to some extent. In contrast, the distribution of Memecoins is relatively fair, giving retail investors more opportunities to obtain more chips, thereby significantly reducing their disadvantage in terms of price.
Unlimited valuation, great imagination space:
Most Memecoins do not have a core business, and their valuation is entirely based on market imagination.
Low consensus threshold:
Memecoins carry content that is more straightforward and understandable, without requiring investors to have a large amount of fundamental knowledge, and can accommodate the consensus of the widest range of investors. In addition, Memecoins can capture various real-world hotspots in real-time, continuously attracting attention and funds.
The risk of Memes lies in the excessively large supply of tokens, making it difficult for investors to find certain targets, and the volatility of Memecoins is high, with high returns also accompanied by high risks.
2.2 Target to watch
Memecoins are difficult to value and classify from other perspectives, so the following will select Memecoins with better odds based on their current market capitalization.
Compared to the old blue chips $DOGE and $SHIB, the emerging blue chips of this cycle have better opportunities.
2.2.1 Blue-chip level: $PEPE, $WIF
$PEPE is one of the most eye-catching Memecoins in this cycle, with extremely strong price performance.
As for the $PEPE symbol itself, as a meme widely circulated on major social media platforms, it has high recognition.
From the perspectives of consensus and cultural consensus, $PEPE is undoubtedly the preferred investment in Memecoins.
In addition, the current market capitalization of $PEPE is about $5.3 billion, reaching the market capitalization level of $DOGE or $SHIB during its peak, showing a certain odds and market acceptance.
Source: https://www.coingecko.com/en/coins/pepe
$WIF, as one of the most representative Memecoins on Solana, has also achieved outstanding performance in this cycle.
The image of wearing a hat has become deeply rooted in people’s minds, giving rise to various other Memecoins with similar hat-wearing images.
$WIF often shows strong rebounds after a decline, making it a preferred target for many investors to buy low.
Source: https://www.coingecko.com/en/coins/dogwifhat
2.2.2 Small and medium market capitalization: $DOG, $BOME
$DOG, as the dragon of the Rune track, is likely to explode along with the rise of BTC in the future.
As a new iteration of inscriptions, Runes have a certain probability of reproducing the FOMO effect of inscriptions in the future, and the enthusiasm of retail investors is easier to stimulate.
In addition, the label of a new asset and the expectation of listing have not yet been realized, which may also become the core factors driving the rise of $DOG.
Source: https://www.coingecko.com/en/coins/dog-go-to-the-moon-runes-2
$BOME is also a representative asset of this cycle, with a record-breaking listing on Binance within three days and a market capitalization exceeding $1 billion, creating a new trend of pre-sale payments and holding an important position in investors’ hearts.
$BOME still belongs to the PEPE culture, with a market capitalization currently about one-tenth of $PEPE. Although it has not started a second round of market, $BOME has the potential to explode.
Source: https://www.coingecko.com/en/coins/book-of-meme
0
3
AI/DePIN: Riding the wave of AI development
3.1 Track background and core logic
The popularity of ChatGPT has completely ignited the entire AI industry, and the influence of AI on humans has been elevated to the level of the “Fourth Industrial Revolution.” The popularity of AI directly and profoundly affects the cryptocurrency industry through the core logics of the digital economy and hardware demand.
As AI’s penetration into people’s daily work and life continues to increase, the issue of computing power is becoming more prominent, and the market is constantly raising the price of computing power companies such as Nvidia.
Computing power devices are also the core support of the cryptocurrency industry. Before the AI boom, the demand for computing power in the cryptocurrency industry had already driven the rapid development of Nvidia.
With the development of the cryptocurrency industry, computing power has become surplus, and AI has gradually become the demand side for this idle computing power.
In addition, AI’s task execution, resource allocation, and data input all occur in the digital world. The distribution of benefits behind it is difficult to define clearly within the traditional framework. For now, we will temporarily refer to it as a digital economic dispute.
The characteristics of the cryptocurrency industry, such as bookkeeping and Proof of Work, naturally make it suitable for resolving this type of digital dispute and coordinating the interests behind AI software and hardware.
The AI boom has brought clear development direction to the Crypto market in the bear market, and various distributed AI computing power, algorithm projects have emerged, forming the current AI/DePIN track.
With the deepening integration of the AI/DePIN track and AI, the actions of companies such as Nvidia and OpenAI have begun to influence the market of related tokens. As hotspots emerge with the progress of AI technology, the cryptocurrency industry will develop in line with the trends and hotspots of the AI market.
3.2 Target to watch
Currently, Crypto x AI projects have penetrated into various aspects of AI, so we will analyze the targets worth paying attention to from the perspectives of computing power supply, algorithms, and AI economy.
3.2.1 Computing power supply
The AI products we currently use rely on underlying large language models, and the construction of large language models relies on GPU computing. The cryptocurrency industry not only has a reserve of computing power devices but can also build a computing power market through blockchain incentives to provide additional sources of computing power for AI.
Keywords such as distributed and idle computing power are the characteristics of the cryptocurrency industry’s computing power supply, and the corresponding core narrative is cost reduction.
3.2.1.1 Arweave/AO
Arweave, as an established storage project, has a leading position in the storage track with excellent ecology and cost-effectiveness.
With the launch of the computing platform AO by Arweave, Arweave officially enters the distributed computing market and becomes a conceptual token for computing power.
Compared to other computing power projects, AO can naturally leverage Arweave’s existing storage advantages to achieve high coordination between the computing layer and the storage layer, which is crucial for on-chain computing with large models.
In addition, AO has made aggressive designs in parallel computing and message passing, giving AO stronger performance compared to other distributed computing projects. Therefore, AO actually has a natural advantage in terms of computing power.
The launch of the AO platform and related public relations (PR) activities have jointly promoted the rise of the $AR price, which is enough to show market recognition of AO.
With the continuous development of Crypto x AI, $AR/AO will become one of the most promising AI tokens.
Source: https://www.coingecko.com/en/coins/arweave
3.2.1.2 io.net
io.net, which recently launched on Binance, is currently the hottest project in this track. io.net is a decentralized GPU network aimed at providing massive computing power for machine learning applications.
Their vision is to unlock fair access to computational power by assembling over one million GPUs from independent data centers, crypto miners, and projects like Filecoin, making computing more scalable, accessible, and efficient.
io.net provides a completely different approach to cloud computing, utilizing distributed and decentralized models to offer users more control and flexibility over computing power, and its services are permissionless and cost-effective.
According to io.net, their computing power is 90% lower than centralized service providers like Amazon AWS, and the combination of all these factors makes io.net a leader among decentralized providers.
Source: https://www.coingecko.com/en/coins/io-net
3.2.2 Algorithms
3.2.2.1 Bittensor
Bittensor is a decentralized network that connects machine learning models worldwide, improving the accuracy and efficiency of solving complex problems by coordinating multiple specialized AI models. This approach combines the unique advantages of various models, producing more accurate and comprehensive results compared to traditional single-model methods, resulting in better performance.
Bittensor also achieves scalability by building an ecosystem and can currently accommodate 32 subnets to serve various vertical scenarios.
Bittensor’s practices in algorithms and ecosystems are innovative, fully utilizing decentralization to stimulate AI. Currently, its market capitalization is close to $6 billion, making it a relatively secure target.
Source: https://www.coingecko.com/en/coins/bittensor
3.2.3 AI Economy
3.2.3.1 Artificial Superintelligence Alliance ($ASI)
ASI is a merger of three Crypto x AI projects in related fields: Ocean Protocol ($OCEAN), SingularityNET ($AGIX), and Fetch.ai ($FET).
After the merger, the three projects will establish a team called the Superintelligence Collective, with SingularityNET founder Ben Goertzel as the CEO.
The three projects will still operate as independent entities but will closely cooperate in the shared $ASI token ecosystem and the operation of the Superintelligence Collective.
The merger announcement issued by the three teams did not provide much information about the new business to be conducted after the merger.
According to Ben Goertzel’s statement on his social media platform, the future work direction will focus on AGI (Artificial General Intelligence) and ASI (Artificial Superintelligence) after the merger, which is also the reason why the merged token is named $ASI.
Token conversion information:
Fetch.ai’s token $FET will be converted to $ASI at a ratio of 1:1.
SingularityNET’s $AGIX and Ocean Protocol’s $OCEAN will be converted to $ASI at a ratio of approximately 1:0.433.
$FET, as the foundation token of the alliance, will be directly renamed to $ASI and an additional 1.48 billion tokens will be minted, of which8.67 million $ASI allocated to $AGIX holders, 6.11 million $ASI allocated to $OCEAN token holders
Fetch.ai has gained mature experience in AI agents. On February 20th, Deutsche Telekom announced its partnership with the Fetch.ai Foundation, becoming the first corporate ally of Fetch.ai. Its subsidiary, MMS, will also serve as a validator for Fetch.ai.
Fetch also announced the launch of the $100 million infrastructure investment project “Fetch Compute” earlier this month, deploying Nvidia H200, H100, and A100 GPUs to create a platform for developers and users to utilize computing power.
On the other hand, Ocean Protocol has built many modules for decentralized data sharing, access control, and payments. Its Predictor product has generated sales of over $800 million in just six months since its launch.
SingularityNET is the project that has explored the most in the AGI direction among these three projects. Its AGI team, along with partners TrueAGI and the OpenCog community, has been focusing on developing the AGI framework OpenCog Hyperon since 2020. SingularityNET will also launch a decentralized AI platform this year to create a foundational environment suitable for running AGI systems.
The ASI, formed by the merger of these three long-established projects, is a product of strong collaboration. With the synergy of business and economic systems, ASI is expected to achieve a new leading position in the Crypto x AI field, while maximizing the capture of the “attention” increment brought by external AI technology development.
RWA: The Necessary Path for Blockchain Mass Adoption
4.1 Background and Core Logic of the Track
RWA is a key track that connects blockchain with the real world. In the long run, it is a necessary requirement for the mass adoption of blockchain. In the short term, it can introduce a large amount of capital and liquidity to the crypto market and the real market.
RWA involves tokenizing illiquid real-world assets and introducing them into the crypto market. The introduction of RWA assets to the crypto market means more value support for real assets, bringing potential overflow funds. The interest-bearing assets in RWA can also provide enhanced returns for the crypto market.
For traditional assets, it obtains a new clearing method, allowing illiquid assets to be arbitrated or liquidated quickly.
The influx of funds brought by the BTC ETF has fully demonstrated the interest of external funds in the crypto market. With the emergence of representative cases in the RWA track, the track will further explode.
4.2 Focus Targets
4.2.1 Ondo Finance
Ondo Finance is a decentralized finance platform for RWA. Through blockchain technology, Ondo Finance creates a transparent investment infrastructure for institutional investors and aims to become an investment bank on the chain, providing various RWA products including bonds, real estate, and commodities to meet the needs of different investors.
With the rapid growth of the RWA market, Ondo Finance, as a pioneer in the industry, has great development potential.
Its transparent and efficient investment platform will continue to attract more institutional investors, further promoting the development and maturity of the market.
4.2.2 Swarm Markets
Swarm Markets is a blockchain platform that provides digitalization and trading solutions for traditional finance. It encrypts physical assets including US Treasury bonds and stocks and provides a legal trading infrastructure.
Swarm Markets is the first DeFi platform to obtain BaFin’s (German Federal Financial Supervisory Authority) license, ensuring its operation complies with regulatory standards in the financial market.
With more and more traditional financial assets being tokenized, Swarm Markets’ compliant and diversified trading platform will gain more market share in the future.
Its innovative financial solutions will continue to attract institutional and retail investors, driving the continuous development of the platform.
5. Social: User Increment Potential and Ecological Incubation
5.1 Background and Core Logic of the Track
Regardless of Web2 or Web3, social networking is the most important and core track.
For the industry, social networking can onboard new users and retain existing users through their own relationships.
For various services and applications, social networking also plays an important role in growth, retention, and increasing user stickiness.
Currently, the penetration rate of the Web3 industry still needs to be improved, and increasing user retention and stickiness are among the core challenges it faces. Social networking is the main solution to address these issues.
In previous cycles, a large number of social projects have made attempts but have not achieved phenomenal applications.
In this current cycle, various technologies that reduce user entry barriers and guarantee performance and experience in infrastructure have become unprecedentedly mature. The social track is highly likely to seize a great opportunity in this cycle.
5.2 Focus Targets
5.2.1 TON and projects within its ecosystem
TON (The Open Network), as the official public chain supported by social giant Telegram, has already created unique narratives in payment, social networking, and mini-programs, relying on Telegram’s massive user base of 900 million monthly active users.
TON can reconstruct the Web2 business model in a Web3 way without increasing user migration costs, utilizing Telegram’s existing social network.
Currently, the TON ecosystem is still in the early stage of development, but high-traffic projects like Notcoin and Catizen have emerged, demonstrating the huge user base behind Telegram.
Therefore, TON and its ecosystem are likely to further stimulate user activity on Telegram and foster a more prosperous ecosystem.
5.2.2 Farcaster
Farcaster is a decentralized social networking protocol that uses smart contracts and hybrid storage technology to facilitate social connections, content sharing, and data ownership among users. It also supports diverse and flexible client and application development.
Farcaster is not a new social project but a long-established leader that has finally emerged in the market. It opened for registration in October last year and has gained market attention this year due to multiple advancements in data, ecosystem, and financing, solidifying its position as the leader in the social track.
5.2.3 UXLINK
UXLINK is a dApp that focuses on social networking among acquaintances. With the good experience provided by Telegram and a clear strategy of “acquaintance relationship fusion,” UXLINK has achieved significant results in terms of data. In the second half of the bull market, UXLINK has great potential for user growth.
6. LSD/LSDfi: A Landing Point for Incremental Capital
6.1 Background and Core Logic of the Track
LSD/LSDfi are core components for building ETH ecosystem basic income. With the imminent launch of ETH ETF, we expect a large amount of capital to flow into ETF, driving the rise of ETH prices. LSD/LSDfi will likely become a growth point for businesses driven by incremental capital, occupying a certain market position.
6.2 Focus Targets
6.2.1 Lido/Rocket Pool
As the two leading players in the LSD space, their brands are trusted by large investors, and they are likely to dominate the market share in ETH staking increment.
6.2.2 Ether.fi
Ether.fi is a fully self-custodial and decentralized LSD protocol. Unlike other liquidity staking protocols, Ether.fi allows participants to retain control of their keys when staking tokens and can withdraw their ETH at any time.
While ensuring full self-custody, Ether.fi also automatically re-stakes users’ deposits to Eigenlayer to generate income, further safeguarding users’ economic interests.
With full self-custody and income guarantees provided by EigenLayer, Ether.fi also has tremendous potential to capture a significant market share in the next round of track growth.
6.2.3 EigenLayer
As the creator of Restaking, EigenLayer has brought an additional source of income to LSD through LSDfi, adding another layer of income to the Ethereum ecosystem.
The LST ecosystem built around EigenLayer will also benefit from the incremental dividend brought by the ETH ETF. The token distribution for EigenLayer has already been determined, and its official launch should not be too far away.
6.2.4 Renzo
Renzo is a re-staking protocol based on EigenLayer, aiming to simplify the complex process of re-staking for end-users.
By introducing the liquidity re-staking token ezETH, Renzo allows stakers to avoid the active selection and management of operators and reward strategies, providing higher returns and liquidity.
As an important project in the LRT ecosystem and with investment from Binance, Renzo currently has an attractive market value.
6.2.5 StakeStone
StakeStone is a comprehensive LSD/LSDfi project. By integrating mainstream staking pools, Re-Stake, and blue-chip DeFi strategy returns, StakeStone provides a highly adaptable staking income base asset for all protocols that require LSD liquidity.
Users can obtain STONE tokens by staking ETH and then receive native staking and blue-chip DeFi strategy returns.
In addition, StakeStone supports multi-chain operations, further improving liquidity and adaptability, and has unique advantages in supporting new ecosystems and obtaining early rewards.
As a project invested by Binance, StakeStone has a certain attractiveness after its token launch. With the growth of its business, StakeStone presents significant potential opportunities.
6.2.6 Karak
Karak Network is a restaking network similar to EigenLayer, which also uses a point system to incentivize users to restake and obtain multiple returns.
In December 2023, Karak announced a $48 million Series A funding round led by Lightspeed Venture Partners, with participation from Mubadala Capital, Coinbase, and other institutions, with Mubadala Capital being Abu Dhabi’s second-largest fund. With its strong team and notable investment background, Karak has the strength to compete with EigenLayer and will generate corresponding opportunities.
6.2.7 Pendle Finance
Pendle brings a new participation paradigm to the entire LSD with its tokenization and trading of yield. Its multiple collateral pools and risk management features allow users to manage risk more effectively and hedge potential losses, reducing volatility and risk in the DeFi market.
With the approval of the ETH ETF, a large amount of capital will flow into ETH, driving the development of the LSD/LSDfi ecosystem. Pendle, as part of this ecosystem, is expected to benefit from it.
7. BTC Ecosystem
7.1 Background and Core Logic of the Track
The explosion of the BTC ecosystem is one of the most prominent features of this current cycle. Inscriptions have sparked enthusiasm for the BTC ecosystem, and BTC L2 and various assets have emerged like mushrooms in the rain. BTC staking/restaking has established a certain market position in the boom of BTC ecosystem assets. Rune, as a new type of ecosystem asset, has also shone during the halving.
Behind these attempts is a common starting point: to activate a large amount of BTC capital and create a more prosperous ecosystem.
However, with BTC’s correction and the wealth creation brought by inscriptions raising market expectations, the current BTC ecosystem is relatively quiet.
With the market improving, we believe that the BTC ecosystem will once again run phenomenal ecosystem assets, bringing huge opportunities.
7.2 Focus Opportunities
7.2.1 Rune: $DOG
Please refer to the analysis in the Meme section. Rune’s expectations are influenced by inscriptions, and its market performance can be described as “reaching its peak at the debut.” In the meme sector, only $DOG is recommended for now due to its odds and defensive attributes.
7.2.2 Others
Many BTC L2 solutions have not formed active ecosystems, and BTC staking-related opportunities are still uncertain. We recommend waiting for the market to make a choice.
8. Conclusion and Outlook
The crypto market is no longer a separate market but is gradually integrating into the real economy. When analyzing opportunities in the crypto market, we increasingly feel the importance of external driving factors.
During market changes and adjustments, the core is to first determine where we are in a cycle and which internal and external factors are driving the next small cycle.
During market consolidation and corrections, we should not be dominated by panic but rather think about the opportunities behind the downturn.
We have summarized the tracks and opportunities worth paying attention to in the second half of the year, hoping to provide readers with useful references.
