The bull market is approaching, with narratives leading the way. Here are the seven sectors to watch in 2024

Written by: Miles Deutscher

Compiled by: Frank, Foresight News

If you want to maximize profits in this bull market, you must choose the right narratives.

In the last cycle, we witnessed explosive growth in L1, DeFi, and metaverse category tokens, and in this cycle, institutions are injecting funds into these narratives.

We have the opportunity to enter early, and in this article, I will introduce the segmented narratives of each industry in the bull market and why these verticals are worth paying attention to. Of course, I am also interested in other areas, but this article will focus on particularly prominent main trends.

The reason I chose these narratives is that I believe they are still in the early stages of the hype cycle. After all, identifying when narratives are in the early stages is an essential skill in the cryptocurrency space.

1. DePIN

DePIN stands for "Decentralized Physical Infrastructure," which is a blockchain protocol that incentivizes decentralized communities to build and maintain physical hardware. Users who contribute resources to the network will receive corresponding token rewards.

The DePIN field is vast, covering multiple hardware sectors worth tens of billions of dollars:

• Cloud storage
• Computing power
• Wireless sensor networks, etc.

Messari predicts that by 2028, the total market value of these DePIN industries will reach $3.2 trillion.

Existing products like RNDR, FIL, and AKT are representative projects of current solutions, and there are many interesting upcoming solutions, such as AethirCloud.

2. Artificial Intelligence

2023 is a breakthrough year for the artificial intelligence (AI) industry, with over $50 billion in new investments flowing into the sector.

In 2023, the amount of venture capital related to AI reached $50 billion, and even so, it only scratches the surface of AI's potential.

As AI grows exponentially, we can imagine the development prospects in the next 2-3 years (not to mention 10 years), which is both frightening and exciting.

Cryptocurrency and AI have not yet fully established themselves, and many current solutions merely use AI as a buzzword, treating it as an AI agent (around major events/hype trading) rather than a long-term fundamental investment.

However, AI and cryptocurrency may intersect in many interesting ways in the future:

• Cryptocurrency-driven reputation systems for GPU leasing;
• AI bots for trading and predictions;
• Blockchain-based AI training incentives;
• Digital media certification;

Kyle Samani also wrote a great article detailing the potential intersections of AI and crypto, expanding on more potential use cases. (An interesting fact: most of the content of the article was written by him using AI).

I firmly believe that some of the best performers in this cycle will be AI tokens. My current strategy is to trade AI tokens as proxies around major events like conferences/news releases/announcements, but I allocate a significant portion of stablecoins to new AI projects.

3. RWAs

Real World Assets (RWAs) have recently gained significant traction, especially after the endorsement from BlackRock CEO Larry Fink. After all, it's hard not to be optimistic about RWAs when the CEO of the world's largest asset management company advocates for asset tokenization multiple times.

RWAs refer to the tokenization of real-world assets (such as real estate, government bonds, bonds, gold, etc.) on the blockchain.

This increases:

• Efficiency (reducing costs without brokers);
• Accessibility (fragmentation and more liquidity);

RWAs can tap into massive markets such as real estate ($326 trillion), global bonds ($124 trillion), and gold ($12 trillion).

In the coming weeks, I will publish a complete in-depth theme on RWAs (as well as my favorite altcoins).

4. Gaming

When I think of industries that can truly attract millions of new retail users, gaming is the first that comes to mind.

It is also one of the most well-funded crypto industries, with total financing exceeding $14.4 billion since 2019, most of the investment in cryptocurrency gaming flowed in during 2021/2022.

Game development takes years, so we are just beginning to encounter the development inflection point now.

Between 2024 and 2026, we may realize the true scale of this funding through a large number of new high-quality games. Moreover, cryptocurrency gaming adds two very important verticals to traditional gaming:

• The ability to own real, verifiable game asset ownership;
• The ability to economically reward/benefit game users, rather than purely siphoning liquidity in a closed in-game economy;

When investing in the gaming industry, I like to take a layered approach, in order of weight:

• Game infrastructure: L1 and L2, SDKs, etc.;
• Game studios: offering multiple gaming experiences simultaneously;
• Individual games: highest returns, highest risks;

5. BRC-20

Since its launch, BRC-20 tokens have rapidly gained attention, creating demand for block space and bringing new use cases to the Bitcoin blockchain.

First, what are BRC-20 tokens?

Inscriptions are data attached to satoshis (the smallest unit of Bitcoin), and "BRC-20" refers to an experimental standard that attaches JSON code to sats based on inscriptions.

Despite being in the experimental stage, the market capitalization of BRC-20 tokens has exceeded $2.5 billion. With ETFs and the upcoming halving, the Bitcoin narrative is heating up, and BRC-20 tokens are expected to benefit from it.

The BRC-20 ecosystem is still relatively nascent, lacking quality infrastructure. I have placed small bets in this area and have been keeping an eye on new projects. With many upcoming products, there are also plenty of airdrop opportunities.

6. Restaking

I view Restaking as a new version of the DeFi Ponzi scheme from the last cycle.

During the bull market of 2021, we witnessed a greedy pursuit of yields due to bullish market sentiment. If we enter a broader bull market (as I expect), demand for yields is expected to return.

We have already seen early signs of this, with the EigenLayer airdrop being a major catalyst for the industry.

So, what is Restaking?

In short, it allows you to reuse already staked ETH across multiple other protocols. This lets you stack yields on top of primary ETH yields and gain opportunities for protocol airdrops.

EigenLayer is the middleware that pioneered the concept of restaking, but interestingly, most of the restaked assets are actually corresponding point systems.

EigenLayer is set to be one of the biggest airdrops of 2024, which is why over $1.4 billion in funds are locked on the platform (Foresight News note: over $3 billion as of the time of writing).

7. ZK

ZK technology is one of the biggest crypto innovations of the past decade.

It is a cryptographic method that can prove the validity of information without revealing any identifying details.

ZK helps to:

• Reduce network congestion (aiding scalability);
• Add privacy protection elements, supporting new types of applications;
• Enhance network security;

Many projects are now leveraging ZK technology, including Linea, zkSync, Manta, Polygon, and more.

While scalability has been one of the more prominent use cases, ZK proofs have applications across many verticals.

An interesting example is Chainlink's "DECO" project, which uses ZK proofs to ensure tamper-proof content transmission across internet protocols.

Decentralized identity oracles like zkMe are another important use case, especially for KYC and AML compliance.

With the introduction of ZK technology, many new use cases are unlocked.

These are the 7 sectors I believe are best suited for the bull market.