The next bull run for cryptocurrency has already commenced, and it brings with it a new wave of investors. Unlike previous cycles, these investors are entering the market through Bitcoin (BTC) exchange-traded funds (ETFs), which have made it easier for them to get involved. Additionally, Ethereum (ETH) ETFs are expected to become available in the near future, further widening participation.
For newcomers to the crypto space, it is important to consider a framework when making their first investments. Many beginners choose to invest in well-known cryptocurrencies like Bitcoin and Ethereum. These investments generally require patience, as it is recommended to wait at least six months before checking the price and deciding whether to sell. However, it’s important to note that investing solely in Bitcoin is unlikely to make someone a millionaire, especially if they only have a few thousand dollars to invest. The growth potential in the near to mid-term is estimated to be around 2-3 times its current value.
Experienced players in the crypto market understand the importance of keeping up with the latest trends. Investing in a variety of smaller projects can potentially yield significant returns. Assets that gained popularity during previous bull runs, such as new layer-1 protocols and lending platforms, have the potential to grow investments by five to 10 times. However, it’s essential to acknowledge that risk and return go hand in hand. The amount one is willing to gain or lose in the crypto market depends on the time, resources, and energy dedicated to studying the market. The beauty of crypto lies in its accessibility to those willing to learn.
There are three emerging narratives that new users, without extensive experience, can comprehend and believe in. First, the combination of artificial intelligence and blockchain technology has sparked the interest of many projects. While the success of these endeavors is not guaranteed, the narrative itself is compelling. This trend has the potential to captivate investors and enthusiasts alike by leveraging the possibilities of both blockchain and AI. Examples of projects in this space include RitualNet and Morpheus.
The second trend focuses on the tokenization of real assets and debt. In traditional markets, the debt market is larger than the stock market, but in the crypto world, there is currently no debt market. However, the concept of tokenizing debt holds significant potential. Stablecoins, which are backed by real dollars and invested in short-term U.S. bonds, serve as the starting point for this trend. Projects like PV01 and Ondo Finance are at the forefront of exploring debt tokenization.
The third trend aims to enhance blockchain technology itself by improving efficiency, increasing throughput, and reducing operational costs. Innovative technologies like parallel Ethereum Virtual Machines (EVMs) and zero-knowledge (ZK) proofs are being utilized to process transactions faster and maintain privacy. Projects such as Sei and Monad are leading the way in this area.
To understand these narratives and evaluate investment opportunities, it is crucial to focus on clarity. If a product description is too complex to comprehend, it may not be the right investment. Additionally, it is important to keep in mind that large funds have likely already made moves in these trends. Staying informed and following the giants in the industry can provide valuable insights.
It is worth noting that the author of this article, Ruslan Fakhrutdinov, is the CEO and founder of X10, a self-custodial crypto exchange based in London. He has previous experience as the head of crypto operations for Revolut and holds master’s degrees in corporate finance and international management.
Disclaimer: This article provides general information and should not be considered legal or investment advice. The views and opinions expressed are solely those of the author and do not necessarily reflect the views of Cointelegraph.