Ash L, the investment director of Signum Capital, shared his views on the current cryptocurrency market, upcoming ecosystem, and areas of concern for investors on X today. The article covers the following topics:
Focus on Narratives
a. Artificial Intelligence x Cryptocurrency
b. Meme Coins
c. SocialFi
d. PointsFi
f. Bitcoin
Upcoming Ecosystem
• Due to the nascent nature of the industry, valuations are difficult to determine, and this bubble will continue to expand. Nevertheless, it remains the best way for retail investors to speculate and benefit from this rising trend.
• While it may come slightly earlier, I believe certain bets represent significant asymmetric upside potential and are novel and flashy enough to attract the interest of most degens/retail investors. (Projects like MyShell, Zero1 Labs, Chasm Network, Creator.Bid, and FirstBatch are some that I look forward to collaborating with).
• Attention fatigue (re-staking/AA/interoperability/modularity) vs. simply buying memes, which is more easily accepted by the public?
• Many people (traditional finance and the elderly) criticize meme coins, but where is the difference? Meme coins, DeFi coins, and Bitcoin all serve the sole purpose of making money.
• I believe this race has reached its peak, especially with meme coin-themed conferences and funds starting to discuss meme coins. There won’t be more astonishing surges like WIF or BOME in the current stage. However, we may return to these themes in the future.
• For the average person, the best and simplest way is to escape the ordinary 9-5 life through high-risk speculation (I used to be such a person).
• Friend tech looks promising, and several potential driving factors could lead to further growth: more ambitious designs, potential Coinbase listing, and establishing some DeFi infrastructure in their applications.
• Fantasy.top and DistrictOne seem to be popular applications this month, successfully tapping into the enthusiasm of our cryptocurrency community on CT(X). This sets a good start for the upcoming Blast token launch.
• Telegram, for me, defines the combination of social and financial. The app allows users to participate in both fields. Aside from messaging functions and private alpha groups, their wallet feature enables users to store stablecoins and earn interest, as well as interact with on-chain dApps. Notcoin is a good attempt to enter the retail market as a “Trojan horse.”
• Points introduce a new concept that gamifies interactions between on-chain users and dApps. I expect the listing strategy and growth mechanism for this project to continue as it develops.
• The concept of points is great, just don’t deceive users by endlessly extracting value from them without providing fair rewards. Without these users, most dApps would be deserted. In this narrative, Michi Protocol is a good choice, as it allows users to trade points before token issuance.
• Ordinals and runes (haven’t seen any rune tokens listed on Binance, only Runecoin successfully listed on OKX).
• BTC L2s: BOB, Bitlayer, Citrea.
• Interesting projects: Tap protocol, Bitcoin DA Nubit, and Bounce bit & Orangelayerxyz.
• Overlooked: RGB & RGB++ (Bitlight Labs) and Nervos Network.
• L1: Bera Chain (Infrared seems to be the birthplace of most flywheels), Monad, Shardeum, Tabi, Artela, and Particle Network tokens + chain launches.
• L2: Blast, Scroll, and Zksync token releases. XLayer may gain more attention on the chain (OKX <> XLayer is similar to Coinbase <> Base // Binance <> BSC // Bybit <> Mantle).
Potential Projects to Attract Mainstream Market Attention
These projects represent the best way for cryptocurrencies to enter the mainstream market and media. Catchy headlines such as “I played this game for 10 hours and made $5000” or “How to make money lying down with your device” are effective attention-grabbers.
• Variants of “x-to-earn” (Sleepagotchi and Puffpaw)
• Games (Paralle, SIPHER, Overworld)
• DePin projects (Grass, OasisAI, NATIX Network)
Areas of Concern
• In an attention economy, each ecosystem and dApp competes not only for the attention of degens but also for retail investors, liquidity, centralized exchanges, and market makers. Look for projects with attractive meme coins and slogans.
• In the previous cycle, we had 3AC and Alameda (two billion-dollar funds) driving price increases. It is uncertain which funds currently have the ability to make large-scale token purchases.
• Consider the marginal buyers of the tokens you hold. Recently issued tokens have been dumped as soon as they hit the market because people are trying to recover market losses.
• What is the contingency plan? What if the bearish trend of May 2019 repeats?
• Remaining catalysts: BTC ETF with an average daily inflow of around $145 million, ETH ETF (??), upcoming large airdrop events, US elections, and interest rate cuts.
• Be cautious with investments in angel rounds/KOL rounds. They can be divided into two categories: investments that yield 30-100x returns or investments that yield dividend splits (preferably 5-10x).
How to Rekindle Retail Investor Interest
It’s not as simple as “building users naturally attracts them.” Recall what initially attracted you when you discovered the internet’s enormity.
• Rags-to-riches stories
• Communities (almost cult-like) that make people feel seen/show off
• Triggering one of the seven deadly sins
• Marketing budgets collaborating with content creators/celebrities (these ads are hardly seen nowadays)
• Large-scale phenomena that can draw attention (like Axie Infinity, BAYC, XRP)
(Disclosure: Signum and I may hold/invest in the mentioned projects.)
