As we have started to get used to the bear market rhythm a little, I have noticed that some people can’t help but jump to the next market phase quickly. But here I need to remind you old irons, be careful, as the historical cycle shows, a bear market always has its own specific pattern.
Everyone’s experience in the cryptocurrency cycle is actually not much different from the character archetype in Hero’s Journey. It always takes a long time to go from “Return” to a new “Call of Adventure”. In the face of the cryptocurrency bear market, it is best to wait patiently for a while.
There may be veterans who are ready for their next adventure, trying to treat every possible narrative in front of them as a lifesaver in a bear market. But some “supernatural” opportunities don’t come up often in this market. Right now, in the real world we live in, facing rising interest rates, inflation, and a series of economic wars, I feel like those opportunities to accelerate the bull market will never come to you.
Until we can see some new narrative emerge, we may feel that the market will go down forever and there will be no more light. The word “market bottom” will disappear forever from our vocabulary because the market as a whole will move so smoothly that it will feel like something big is happening when the market moves up or down 5%.
On the journey to the next bull market, we will also meet some sham prophets, some of whom are even talking about some weird stuff called “fundamentals” that they shy away from in a big bull market Don’t talk.
The crypto community is looking for a new narrative
Ironically, we often laugh at fundamentals when times are good and beg the market to acknowledge them when times are bad. There has been a familiar narrative recently, and that is the “merger of Ethereum”.
Collect the seven dragon balls and start summoning the dragonWhile fundamentally an important event, those hoping to get rich quick with the Ethereum merger will experience untold pain and disappointment. Because the development of a thing often takes time, and it takes time for such an important event to be widely recognized by the market.
Most people lose all hope when they find themselves predicting or the bottom of the stud is not the real bottom. When fear turns into disappointment, and disappointment turns into lying down and dying, then we may feel like we have nowhere to go.
But when most people start to lose interest in cryptocurrencies, they don’t know that there is a small group of people who are researching innovative tools day and night, and these tools are later turned into the next generation through the magic of liquidity. The real driving force behind the arrival of the bull market. In order not to dull our senses in the dreary period ahead (after healthy volatility), I’ll explore the underlying narratives that could be the tipping point for the next bull run in what follows.
The real bull market impetus comes at the macro level
For a riskier asset class like cryptocurrencies, the real bull run has come from the Fed’s money printing press. Of course, this applies to almost all asset classes. If builders don’t continue to work hard in the next year or two, it may be difficult for the new hype narrative to drive the arrival of the big bull market. Those innovative, eye-catching narratives matter, and are an important part of the industry’s re-visioning.
We need to embrace a new wave of vision. Epoch-making opportunities don’t all start at market highs.Until we wait for a new innovation narrative, the movement of cryptocurrencies will mainly depend on the face of the macroeconomic level. So, when the market lacks innovation and the technology fundamentals haven’t changed, we need to look outside the box to see if the world will change its stance on this new asset class.
This is repeated with Bitcoin, which every so often reliably changes the narrative of how the outside world perceives it. Since the market crash in 2018, the cryptocurrency community has been shouting in unison that “institutions are about to enter the market”. Institutions do come, but they come not when the market is crashing and needs an emergency blood transfusion, but when everyone is bullish on cryptocurrencies.
An old article by @hasufl delves into Bitcoin’s changing narrative.
Bitcoin appears to be macro reactive. The recent “inflation hedge” about Bitcoin is an updated “digital gold” + “non-correlated asset” claim.
Bitcoin is very good at promoting in terms of narrative and market fit.Bitcoin as a technology is not going to change. Bitcoin holdings are like missionaries, who deftly manipulate global macroeconomic events to sell the story about the only true currency, and embellish it in the process. From payment systems, through digital gold and inflation hedging, all the way to Swiss bank cloud accounts/trusted neutral bonds.
Another credible neutral asset is Ethereum, which is getting a new upgrade. Ethereum is now mature enough that its narrative has become relevant on a macroeconomic level. Ethereum is now strong enough that it can compete with Bitcoin on a macro narrative scale. Also, it offers a decent yield.
Ethereum’s massive consolidation makes it strong in both product and narrative.
The “productive asset” and “blue-chip cryptocurrency” memes refer to the successful market run of FANG (Facebook, Apple, Netflix, and Google) stocks over the past decade.
Misunderstood early on, great long-term performance.
This will dominate the new narrative of cryptocurrencies over the next 12-24 monthsAs far as current macro events are concerned, there is a line of thought that we are going through a major macroeconomic transformation caused by geopolitical events, which is a new interpretation of the conflict between Eastern and Western civilizations.
Clearly, bottom-up speculation about central bank conspiracies is moot when geopolitical adjustments are taking place. It’s not a time of peace, it’s an economy of war, which means liquidity is being pumped into building the real thing, and less so to online casinos (which is bad for cryptocurrencies).
We are likely to reach the peak of investment in bits in the next 10 years and see more atomic investment in the future.The premise of this line of thinking is that inflation is not demand-driven, but structural (supply-driven) and will not ease off anytime soon, as there will be A fierce economic war. Globalization is over, and global trade will become fragmented.
We heard that countries are considering diversifying from the US dollar for international trade settlement due to the freezing of foreign exchange assets of the Russian Central Bank. Since the U.S. dollar is not a credible neutral currency, this is a big problem for those and sovereigns who are restricted from trading in U.S. dollars in times of war.
I expect cryptocurrencies will try to build a series of narratives around these geopolitical events. Some narratives may even be true for a while because, fundamentally, a credible neutral currency is a strong proposition. Could the cloud kingdom of Ethereum and Bitcoin be able to defend its sovereignty and profit from the war like Switzerland did during World War II?
In the past, macro narratives typically built up capabilities over time, only accelerating when they were mixed with trigger points for new innovative technologies. Instead of relying on macro narratives, we should focus on exploring potential future micro narratives.
The big bull market in 2021 started with the summer of DeFi in 2020. The speculative feedback loop of lending (aka yield mining) is the main catalyst for this. After that, we have a new narrative with NFTs and GameFi in the same cycle. But what other promising technologies could be the catalyst for the next bull market?
True DeFi 2.0
While we’ve heard about DeFi 2.0, I don’t believe we’ve actually gotten there. If there is DeFi 2.0, it won’t come out in a year or two at the earliest. Included below are some of my thoughts on what DeFi 2.0 might look like:
- more sustainable yield
- More sophisticated on-chain tools, including the ability to build complex structured products
- More KYC (sounds bad, but even better if some zero-knowledge magic can be employed to maintain privacy).
- Products connected to the real economy (of course, I’m not referring to memes)
- New stablecoin experiments (probably not algorithmic stablecoins this time).
- I’m still watching OlympusDAO closely because I believe in the mission of building a fiat-independent crypto reserve currency.
When the COVID-19 crisis started in March 2020, I was looking for real-world applications of DeFi because I thought that as global travel and trade collapsed, the world was going to a localized model, and we could start localizing Decentralized applications for lending are imagined as cryptographic extensions of the real economy. Maybe this time someone will come up with a cryptocurrency model for WIR francs.
Today, I am curious about how we can connect DeFi to actual commerce. Closing this gap will allow DeFi to grow into a more sustainable product and a Web3-native solution, rather than a purely speculative-based tool.
The answer here seems to be GameFi. Decentralized applications like StepN are in a position due to their huge early success: they have actually captured users, but the challenge they now face is how to translate Ponzi token economics into a sustainable relationship with users Commercial relations.
In-game purchases, referral fees, utility NFTs, and other items can actually turn into a decentralized commerce space. Of course, I limit I haven’t seen any successful prototypes yet, but getting people to spend money on the blockchain, rather than spending money on gas fees or speculation, is something we desperately need.
Another rendition of decentralized commerce might be related to content production and monetization. I can imagine the DAO owning the intellectual property of Tolkien, Harry Potter, Star Wars and other franchises. Of these, community-owned and operated media companies are an interesting proposition, given the natural tendency of cryptocurrencies to drive capital formation.
While people are increasingly skeptical about DAOs, we need to be careful to accept that their failure rate will be no different than a typical startup or company. They can still be effective stewards of content production and monetization. Getting to this stage requires a Discord and Kickstarter type of app because we need a flexible user experience.
The simplest implementation of Web3 commerce is actually a game on the blockchain. The items in the game are really owned by people, and maybe they become more important than the game. This is good for the development of the game because the game is built around items from different games.
This is already a very hot topic, and we’ve done a long thought article on the subject. Most critics would argue that doing “social” on the blockchain is redundant. Web3 Social will attempt to separate the social graph from the platform, giving users sovereignty in the digital realm and their connections can be carried across various social venues.
If Web3 Social was only aimed at the cryptocurrency community, it would most likely fail. Merely providing ideological motivation is not enough, the key here is to introduce new forms of monetization, which tie into the aforementioned “Web3 Commerce” narrative. These new tools had to be intuitive and easy to use.
Let’s return the focus to the main advantage of cryptocurrencies, frictionless capital formation, and I think the next social era may emerge around crowdfunding and community governance. Social media is already a big platform for content monetization. Web3 solutions can broaden the possibilities for creators and their audiences.
This is why if NFTs are intrinsically linked to the future of social media, the next major social application will be cryptocurrency-driven. The question we need to ask is: is the future of social media really intrinsically linked to NFTs, or is it just a gimmick?
Decentralized Science (DeSci)
According to future.com, the trend towards decentralized science lies at the intersection of two broader trends:
In short, in addition to the systemic failures described in the introduction, the problem in the scientific or academia can be described as:
- Institutionalized academia has created career bureaucrats who optimize internal reputation (journal publication) rather than take risks, which has historically led to innovation.
- The funding of innovation by the scientific community is centralized, corrupt, unhelpful and not like the original tinkering/startup nature of scientific discovery.
- Knowledge is closed source and locked behind paywalls. In this way, data (and power) is concentrated in the hands of a few major publishers.
Funding research that helps alleviate their specific problems through online communities is an interesting prospect. Necessity is the mother of invention. I see a lot of people sharing tips online about health problems, especially when modern medicine doesn’t really have the answer.
Giving them the ability to fund research and potentially develop treatments for their disease is an exciting prospect. But turning Reddit into a crowdfunding platform that powers scientific discussion, research, and development seems outrageous (perhaps that’s why it’s so cool).
World of Atoms
For those giant babies who haven’t left their parents, this is indeed a crazy proposition. I’m hopeful that it becomes a narrative that spans all of the above. By “atomic world” I mean the connection between cryptocurrencies and the production economy, which is a real thing.
Let’s start by looking back at 2018, when we realized that tracing strawberries on the blockchain wasn’t really that revolutionary, but maybe it’s time to revisit some of our thinking back then, the technology we had at the time Not so mature yet.
Something like the Energy Web is still around, and while I think it’s a long shot, it’s still an effort to achieve something that even the average person can benefit from. Optimizing the grid and decentralizing the energy market is an interesting idea as we talk about the energy crisis (we may need more cheap energy in the first place, especially in the EU).
Due to potential synergies, we can focus on providing crypto loans to local businesses and possibly form DAOs to build physical products or produce goods (nuclear fusion DAOs).
In a bear market, there is nothing really easy to achieve, meme coins will hardly rebound, and builders must dig deeper for inspiration. But on the bright side, necessity is the mother of invention, and maybe it’s time for cryptocurrencies to look outside and try to solve real problems for ordinary consumers and producers.
Beyond dreams, chase together
Maybe there are other narratives that will take us into a future bull market, as many founders are working on decentralized computing (yes, again) and other niche solutions I can’t think of. That doesn’t mean that if things failed in the past, they won’t work in the future.
In short, we hope to see the imagination of builders that can make us applaud. We will focus on new ideas and new narratives that better enable us to reimagine the future.
At the same time, let us not be too pessimistic.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/what-could-be-the-next-narrative-to-detonate-the-cryptocurrency-bull-market/
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