With the ETF boots on the ground, who will take over the mainstream narrative in 2024?

One carrot and one pitfall, after the ETF dust settles, what other potential mainstream narratives are worth paying attention to in 2024?

Written by Frank, Foresight News

From October 2023 to the present, the spot Bitcoin ETF has always been one of the core narratives that prompted the market rebound. Now the boots have finally landed (see “Timeline | New Milestone: Bitcoin Spot ETF Finally Passed”), what is the dust of ETF expectations? Against the background of settling down, what are the next tracks in the encryption market worth paying attention to?

This article will take you through a brief inventory of the currencies that have performed strongly in the market recently, and broaden your horizons, looking forward to the potential mainstream narrative that may take over ETFs in 2024.

Pan-Ethereum Ecosystem Strengthens

Since October last year, ETH has begun to decline compared to BTC, and the ETH/BTC exchange rate ratio has fallen from above 0.064 to below 0.05, and has fluctuated widely around 0.05-0.055.

However, around December 20, related currencies in the pan-Ethereum ecosystem began to gradually break away from the shock/downward range and continued to rise. In less than a month, many currencies have quietly reached record highs.

Therefore, looking at the outstanding currencies in the recent crypto market, you will find that the pan-Ethereum ecosystem (Layer2, LSD, etc.) is the well-deserved main line.

L2 has strong momentum

The first is naturally the Layer 2 sector. As of the time of publication, ARB has successfully exceeded 2.3 USDT (OKX spot data, the same below), setting new historical highs continuously.

Since December 21, ARB’s cumulative increase has reached 100%, becoming the undisputed leader in the Layer 2 track in terms of price performance. MAGIC and RDNT on top of its ecology have also experienced 24-hour increases of more than 10%, showing spillover effects.

In addition, other L2 projects also performed well: OP once again exceeded 4 USDT, one step away from the historical record of 4.18 USDT; IMX has doubled several times since October 20, climbing from less than 0.6 USDT to above 2.2 USDT; SKL broke through 0.1 USDT in a short period of time, with a 24-hour increase of more than 20%, and so on.

LSD rebounds strongly

At the same time, the LSD sector also rebounded strongly. Among them, the leading LDO also briefly exceeded 4 USDT during the day, setting a new high since it was listed on OKX, and its cumulative increase since December 20 has exceeded 100%.

Other projects on the same track are also experiencing gratifying gains, such as: RPL exceeded 37 USDT, with an increase of nearly 50% on the 4th; SSV reached a maximum of 38.62 USDT, which was more than three times the price on October 20 (12.22 USDT); it recovered after entering the LSD war The strong PENDLE also broke through 1.7 USDT, setting another record high; LBR broke through 1.4 USDT, with an increase of about 40% in 48 hours, etc.

ENS stands out

In addition, ENS, which has been hovering at low levels in the past six months, has also broken through 10 USDT and 15 USDT successively, rising all the way to above 18 USDT, with a 24-hour increase of 26.37%, a new high since February 20, 2023.

Interestingly, whether it is L2, LSD/DVT or ENS, Vitalik Buterin has recently used blog posts or tweets to boost public opinion:

• On December 28, 2023, Vitalik published a blog post to discuss the market structure and development direction of L2, and mentioned ENS and distributed verification technology to discuss how to handle the Ethereum network without sacrificing decentralization. A huge number of signature payloads (recommended reading “Vitalik’s New Work: Recreating the Cypherpunk World of Ethereum”);
• On January 3, 2024, Vitalik specifically tweeted, stating that "all L2 should run on CCIP resolvers so that we can register, update and read ENS subdomains directly on L2. ENS is very important and it needs to be burdened “affordable”;

Other hotspots are more confusing

In addition, the hot spots in the market are more complicated. Based on the OKX growth list data, pan-DeFi projects such as AUCTION, SNX, and CETUS all have 24-hour increases of more than 15%, and established leaders such as AAVE have also rebounded strongly recently. .

In the L1 public chain dimension, in addition to SOL and AVAX, which have been frequently reported in the news recently, the 24-hour increases of DOT, NEAR, ADA, and SUI are also more than 10%.

The cumulative increase of these public chain tokens in the past two months has been more than 80%, and DOT has rebounded from a historical low of 3.5 USDT to a maximum of 9.6 USDT in less than 3 months, which is a particularly impressive performance.

In other NFT, AI, BOT and other tracks, leading players such as BLUR, FET, and UNIBOT are also experiencing good growth, but they have not formed a particularly obvious general effect. Generally speaking, the leaders are leading first**.

After ETF, how to find the next mainstream narrative?

As Wenchu said, to a certain extent, the core narrative that has prompted the market’s rebound in the past two months is derived from the expectations of spot Bitcoin ETFs. After the ETF dust settles, what narratives or tracks will follow? Worth paying attention to?

ETF follow-up concepts

Public data shows that there are currently 5 non-security tokens recognized by the U.S. Securities and Exchange Commission (SEC). In addition to Bitcoin and Ethereum, they also include BCH, LTC and DOT.

This means that after the spot Bitcoin ETF is approved, it is logical that institutions will choose to apply for a new cryptocurrency spot ETF next, and there is a high probability that they will choose from the three non-security tokens of BCH, LTC and DOT** .

Therefore, in addition to Ethereum, which is currently the focus of the market, BCH, LTC, and DOT undoubtedly also have huge room for subsequent speculation and imagination. The recent supplementary increase of DOT mentioned above may also include this expected driving factor.

Halving and PoW Narrative

OKLink data shows that there are now about 100 days left before Bitcoin’s fourth halving - expected to be April 23, 2024, when the block reward will drop from 6.25 BTC to 3.125 BTC.

As one of the most important narratives in the crypto industry, “Bitcoin halving” has always been an important stimulus event that the market has great expectations for. Each round of halving is a grand event, especially after the first three halvings of Bitcoin. Over the past 12 months, there have been staggering gains:

In the 12 months following the 2012 halving, Bitcoin surged 8,256%;

Bitcoin surged 287% in the 12 months following the 2016 halving;

Bitcoin surged 542% in the 12 months following the 2020 halving;

Although ETFs have reduced the sole importance of the Bitcoin halving narrative to a certain extent, as the time approaches, Bitcoin and the PoW camp may once again usher in hype expectations. From historical experience, **PoW as a crypto industry The oldest narrative is that almost every year there is a myth about the increase of PoW mining coins. **

At the same time, BCH and ETC, which are about to undergo halving this year, may also deserve attention. Interestingly, ETC, which has always been ridiculed as the “Doomsday Chariot”, also rose to 28.888 USDT today, with a 24-hour increase of more than 35%, a record A new high since October 2022.

Pan-Bitcoin Ecology

In the wave of Bitcoin ecology in 2023, winners such as OKX will take the lead. After the beginning of 2024, the competition in the Bitcoin ecology is destined to become a long-term narrative among large institutions such as Binance and OKX. You can focus on Pay attention to spillovers**.

In particular, the most imaginative L2 solutions and a series of derivative application scenarios, such as Ethereum Layer 2 solutions such as Arbitrum and Optimism in 2021, do not rule out the eventual emergence of a number of billion-dollar Bitcoin L2 leaders. project.

Pan-Ethereum Ecosystem (L2, LSD)

As of the latest news at the time of publication, Ethereum plans to activate the Dencun upgrade on the Goerli test network at 14:32 on January 17, 2024. If no major problems are found, it will be run on the Sepolia and Holesky test networks (expected to be from the end of January to February early month).

Once Dencun runs smoothly on all three testnets, mainnet activation will be arranged, which also means that the long-awaited post-Cancun upgrade era has officially arrived.

Just as Bitcoin relied on the dual-line narrative of “Ordinals + ETF” in 2023 to promote Bitcoin’s continuous strength from technology + market,** Ethereum in 2024 seems to have a dual-line narrative of “Dencun + ETF” taking shape. . **

Against this background, the pan-Ethereum ecosystem, especially the L2 and LSD tracks, will undoubtedly receive major attention from the market. In particular, L2 Wars is facing the pressure of various RaaS solutions and DA modular design. 2024 is likely to see the birth of some new variables and products that go beyond the conventional competitive direction, which is worth looking forward to.

Deep turmoil in the field of AI

Last night and this morning, the news related to the spot Bitcoin ETF received overwhelming reports, but many people in the industry may have ignored the two new products launched by OpenAI at the beginning of the year - the online store GPT Store and the enterprise customer product ChatGPT Team.

The former allows users to browse popular and trending GPTs on community rankings, covering multiple categories such as DALL·E, writing, research, programming, education and lifestyle; the latter is a platform suitable for teams of all sizes. New enterprise-grade product that gives enterprise users access to advanced models and tools, enterprise-grade data privacy and security, and the ability to create and share custom GPTs.

As the top trend in the technology industry in 2023, the ChatGPT wave has completely swept the entire technology industry. Although OpenAI staged an annual drama of the founder leaving and returning at the end of last year, it may bring great consequences to people’s lives, work and even social production in the future. The profound changes will undoubtedly continue to ferment in 2024.

As the Web3 industry has been actively coupled with AI, there is a high probability that AI-related projects will experience a blowout this year. Even with the spillover of funds and attention, a number of projects will emerge with staggering growth rates and volumes.

Forest, co-founder of Foresight Ventures, once publicly stated, “AI+Crypto are the two biggest technological revolutions currently seen in human innovation. In the next round of bull market, among the top 100 projects by market value, at least There are 10-15 AI-related targets".

Solana and other new public chain ecosystems

With the resurgence of heterogeneous chains represented by Solana and the development bottlenecks faced by Ethereum Layer 2 itself, the industry has once again had a big discussion about Ethereum and Layer 2, especially the flow among Layer 2s that are constantly launched based on the concept of expansion. Issues such as sexual separation and mutual incompatibility once caused the Ethereum narrative to appear languid.

The continued surge of SOL and AVAX is nothing more than a shot in the arm for “new public chains”. Market attention and funds are returning again, which also prompts new public chain ecosystems such as **Solana to usher in 2024. Come to your own Indian summer.

Especially the Solana ecosystem, which plays a leading role. Currently, whether it is DeFi, NFT or the popular DePIN track, many ecological sub-projects worthy of attention have emerged, and it is likely that they will break through the phenomenon of large-scale adoption in 2024. level project, worthy of long-term attention.

Summary

The crypto world is noisy with narratives, and the market’s demand for new narratives is ever-present. This also leads to the fact that if the market is divided into months/years, the logic behind any big market trend can actually be traced. **

Now that the SEC has settled down the biggest narrative in 2023 with a stroke of a pen, there will always be new narratives to fill the gap in 2024. Therefore, some of the weak and gray lines that were secretly prepared in the early stage will undoubtedly gradually emerge. I hope we all can Something can be gained in 2024.