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| By Bruce Ng |
I believe we are at the start of one of the most explosive bull markets in crypto.
And sure, loading up on blue-chip cryptos like Bitcoin (BTC, “A-”), Ethereum (ETH, “B”) or even a crypto index like Grayscale Bitcoin Trust (GBTC) or the ProShares Bitcoin Strategy ETF (BITO) is a great step to get yourself leveraged to the space and make profits in tandem with the market.
But any Joe Shmo off the street could tell you that. At Weiss, we seek to outperform the crypto market instead.
And we will do this by investing in narratives that we think will perform better than BTC and ETH. Here are the ones at the top of my radar right now …
Narrative 1: Arbitrum Season
Arbitrum (ARB, Not Yet Rated) is the leader of the Layer-2 sector. And there is a big development in the works that is set to solidify its dominance in the sector.
The Arbitrum Short-Term Incentive Program — or STIP — is set to distribute 50 million ARB to some decentralized apps in its ecosystem. The goal is to incentivize liquidity for the dApps that reinvigorate usage in Arbitrum dApps.
As of Nov. 4, the first round of 25 million ARB has been distributed to related dApps. I think the STIP will trigger renewed interest and attention to the Arbitrum ecosystem and launch a so-called Arbitrum Season amid this bullish crypto market.
And within this narrative, there are a few potential winners.
First, of course, is Arbitrum’s native token, ARB. This governance token is likely to ride the incentive hype. Additionally, there is currently a proposal to allow staking of ARB for yield. If this proposal passes a vote, the price of ARB should rise significantly in addition to presenting the opportunity to earn yield.
Second is Radiant Capital (RNDT, Not Yet Rated). Radiant is an omnichain money market platform built on the Arbitrum network that allows users to supply and borrow assets across multiple blockchains.
Finally, we have GMX (GMX, Not Yet Rated), the leading perpetuals decentralized exchange across the crypto space. It’s also the darling of the Arbitrum network, as it has dominated transaction volume on Arbitrum since its inception in 2021.
Narrative 2: Artificial Intelligence
The impact and significance of AI has increased greatly this past year, and the crypto space is far from insulated from this wave. A narrative, which combines crypto and AI together, is quite likely to perform very well as it can absorb interest and liquidity from the world outside of crypto.
Some crypto projects on our radar are ...
Render Network (RNDR, Not Yet Rated), a decentralized network that crowdsources users’ unused graphics processing in order to render graphics for AI, metaverse and entertainment applications cheaply and quickly.
This scalable and affordable business model directly threatens TradFi giants like Amazon (AMZN) and Microsoft (MSFT) that offer rendering as part of their business.
Bittensor (TAO, Not Yet Rated). Similar to Render, but this crypto project specializes in machine learning requirements.
Worldcoin (WLD, Not Yet Rated). This controversial project aims to provide its users with a verified digital identity. The idea is actually in reaction to the surge of AI making it more difficult to determine whether certain online activity is from a person or an algorithm.
The plan is for tokens to be airdropped to users who sign up … by giving their personal information and even biometric data via eye scans to verify their identity.
Fortunately, you don’t need to sacrifice your privacy to capitalize on this trend, as you can still buy the WLD coin without signing up for a verified digital identity.
Narrative 3: Round 2 for Layer-1s
Layer-1 blockchains — aka smart-contract platforms — saw an explosive rise in the previous bull cycle from 2020-2021. Their prices have since faded to insignificance.
However, with Solana (SOL, “C”) gaining increasing interest and hype, shedding its FTX controversy and improving on a fundamental level during the bear, other L1s are likely to follow in its wake.
Naturally, then, the top project in this narrative for me is Solana. It’s been leading the resurgence and is already trading at levels not seen since before the FTX crash.
Next is Kujira (KUJI, Not Yet Rated), a Layer-1 built using the Cosmos SDK — a framework for building blockchain applications. Which means it’s fast and transaction fees are cheap. As for Kujira itself, it offers a full range of dApps, including a liquidation engine, an order book-style DEX, a money market and its own native stablecoin, USK.
Rounding off the list is Injective Protocol (INJ, “B-”). Similar to Kujira, it contains the complete suite of dApps ranging from lending to DEXes.
Now, let me be clear — none of the above projects are recommendations. They are merely the top performing projects in these narratives that are booming right now.
I do see these narratives continuing to take prominence in the coming bull market, however. So, do your research to see which narratives and projects are right for your portfolio and investment strategy.
Best,
Bruce
