Top 5 Crypto Narratives For 2024 That Must Be Monitored

The crypto narrative has become a crucial factor in driving the fluctuations in crypto asset values. Supported by the Bitcoin halving event in 2024, Bitcoin and Altcoin prices have been on the rise since mid-2023 until early 2024.

The increase in Bitcoin prices followed by Altcoins acts as a catalyst for welcoming the bull market in 2024.

As an investor, preparing for the excitement of a bull market should include understanding important crypto narratives that have the potential to influence the global crypto market.

What Is a Crypto Narrative?

In cryptocurrency, a narrative refers to a new idea, story, or trending topic shaping how people perceive and evaluate cryptocurrencies. These narratives can influence investor sentiment, market movements, and the adoption of new technology.

Crypto narratives emerge from a combination of various factors, including recent developments in crypto and blockchain technology, social and economic events, government policies, and the motivations of individuals involved in the cryptocurrency industry.

Furthermore, the role of mainstream media, social media, online forums, influencers, and market trends can trigger cryptocurrency narratives.

5 Crypto Narratives For 2024

This article will discuss potential crypto narratives in 2024 in anticipation of the bull run.

Real World Assets (RWA)

In the DeFi ecosystem, the sector of tokenizing real-world assets (Real-World Asset or RWA) has shown impressive performance.

In 2023, looking at the total locked value (TVL), it amounted to US$5.97 billion or 6.2% of the DeFi protocol's TVL (TVL: US$96.87 billion).

This is why RWAs have the potential to become the next crypto narrative.

According to the top 10 RWA protocols based on DefiLlama data, the change in TVL from the beginning of 2023 (data updated on 20/12/23) was +580% from US$866 million to US$5.89 billion.

Several reasons why RWAs have the potential to become a hyped crypto narrative are:

  1. Significant TVL Growth: RWAs successfully entered the top 10 DeFi sectors based on TVL in 2023. 
  2. Potential Entry of Large Institutions: Adoption by financial institutions and large companies that are beginning to see value in tokenizing RWAs using smart contracts, allowing them to become issuers of RWAs. 
  3. Global Access: RWAs enable global access to investments that were previously difficult to access by investors in various regions, partly due to regulatory constraints.

Some crypto projects that embrace this narrative include Ondo Finance, Frax Finance, and Pendle.

Beyond Bitcoin Infrastructure

Unlike Altcoins, Bitcoin does not have smart contracts, so it cannot build dApps on top of it. This is because dApps involve several actions, 'agreements,' between the protocol and users. For example, agreeing to use assets in the token swap process, can only be executed with smart contracts.

Nevertheless, many developers continue to strive to make the Bitcoin network more functional than just a means of payment. The emergence of these protocols has the potential to create hype in the next bull run.

This narrative refers to protocols that develop features on the Bitcoin network, also known as beyond Bitcoin. For example, the introduction of 'Bitcoin NFTs' such as those developed by Ordinals. Another example is the speed and transaction fee updates on the Bitcoin network implemented by the Lightning Network.

Some crypto projects embracing this narrative include Stacks, Ordi, Sats, and Badger DAO.

Liquid Staking Derivatives (LSD)

As the name suggests, 'liquid' means that users' crypto assets being staked remain liquid, meaning they can still be used for other purposes even though they are locked in the staking protocol.

The idea of LSD emerged sometime after the launch of the Ethereum Beacon Chain (Ethereum's mainnet proof of stake) in December 2020, which allows users to stake ETH.

However, a problem arose: users who stake cannot withdraw their ETH because it is locked during the staking period. This continued until the Shanghai upgrade occurred, the timing of which was not yet determined at that time.

Based on this, the LSD protocol emerged as a solution to address the illiquidity of ETH when staked.

In the process, the LSD protocol will issue pegged tokens (tokens equivalent to the staked tokens) as proof that users are staking in their protocol.

With LSD, a derivative sector is developed, called LSD Finance (LSDfi).

LSD Finance is a sector in DeFi that refers to protocols accepting proof tokens from LSD protocols, which have functions in their protocols. For example, the lending protocol Aave accepts proof tokens of staked ETH from Lido as collateral for loans. With the increasing number of LSDfi protocols, the presence of LSD protocols will also persist.

Some crypto projects that carry this narrative include: Lido, Rocket Pool, Jito, and Blaze.

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