Cryptocurrencies

3 trends to think about before the crypto bull run resumes

3 trends to think about before the crypto bull run resumesnext crypto bull trend has already begun. One of the most important differences compared to previous cycles lies in the type of new investors entering the market. Traded funds opened 

3 Trends To Think About Before The Crypto Bull Run Resumes
3 Trends To Think About Before The Crypto Bull Run Resumes

Bitcoin (BTC) exchange-traded funds (ETFs) effectively open the door to wider participation by making it easier to get a piece of the action, and it is widely expected that exchange-traded funds (ETH) will arrive on Ethereum soon.

Newcomers may have some difficulty understanding cryptocurrencies, but there is a worthwhile framework to consider in light of their first investments.

Beginners often start by investing in big names like Bitcoin and Ethereum. For the most part, you can invest in Bitcoin and wait at least six months before checking its price to see if it has grown enough to sell. But for those who only have a few thousand dollars to invest, investing in Bitcoin will not make you a millionaire. The near and medium term growth potential is 2-3 times its current value.

Experienced players understand that they need to check the latest trends. If done right, investing in dozens of small projects can really pay off. Assets that proved popular in the previous bull market, such as new layer-one protocols and lending platforms, may provide an opportunity to increase your investment by five to ten times.

However, risk and return are two sides of the same coin. How much one is willing to gain or lose in cryptocurrencies boils down to the time, resources and energy one is willing to put into studying the market. And therein lies the beauty of cryptocurrencies: for those willing to learn, they are easily accessible.

There are three narratives that the average new user without any impressive experience understands and believes. The key is to know the story behind each product. Innovation stands at the forefront of this field because people in the cryptocurrency space are innovative and constantly looking for something new. I see three such trends for a bull market.

The first is the combination of artificial intelligence and blockchain technology. A large number of projects are now trying to innovate at the intersection of blockchain and artificial intelligence. Although it is not guaranteed that these efforts will have fruitful results, the narrative itself is powerful. This trend, riding the wave of blockchain’s potential and cutting-edge developments in artificial intelligence, could capture the imagination of investors and enthusiasts alike. I follow RitualNet and Morpheus.

The second trend addresses more fundamental aspects related to the tokenization of real assets or the tokenization of debt. In a traditional market, the debt market is larger than the stock market. However, in the world of cryptocurrencies, there is currently no debt market.

 Stablecoin can be considered the starting point, where companies issue stablecoins in exchange for real dollars and then themselves buy short-term US bonds. However, the concept of corporate debt remains unchanged in the cryptocurrency space. Therefore, everything related to debt tokenization has huge potential. PV01 and Ondo Finance are two projects in this area.

The third trend focuses on enhancing blockchain technology itself – improving its efficiency, increasing productivity, and reducing operating costs. It uses new technology such as parallel Ethereum virtual machines to process many things at once, which speeds up transactions. 

Likewise, zero-knowledge (ZK) proofs keep things private but simple, making the entire system run more smoothly and are less expensive. Sei and Monad are two projects worth seeing in this area.

But how can we use these narratives to delve deeper into the product? Imagine an investor studying a product. He is interested in, and perhaps excited about, a project. Every time he encounters something incomprehensible in the document, he highlights it in red.

 Then he looks at the entire description and sees that there is a lot of red in the document: there is a lot that he does not understand about the product description. He does not invest. This is a pretty straightforward strategy: if an investment is too complex to understand, it may not be the right investment. This approach emphasizes the need for clarity.

So, when you’re thinking about investing in a trend, remember that big funds may have already made their move. If there is some kind of notable narrative, they are more likely to be invested in it already. This is a good reminder to stay informed – while realizing that in the world of investing, it’s often the giants who lead the game.

Ruslan Fakhrutdinov  is the CEO and founder of X10, a self-custodial cryptocurrency exchange based in London. He was previously Head of Crypto Operations at Revolut. He holds a Master’s degree in Corporate Finance from GSOM SPbU and a Master’s degree in International Management from CEMS.

This article is for general information purposes and is not intended and should not be taken as legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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