How to Position for the Upcoming Bull Market

Author: @jessewldn | Plain Language Blockchain

In the past two years, the crypto industry has entered a period that can be described as a "consolidation phase." During this time, the industry has focused more on optimization rather than groundbreaking innovations. This consolidation and optimization are mainly reflected in the following three aspects:
1) Infrastructure
2) Application Scenarios
3) Leading Winners

01
Trends of Optimization and Consolidation in the Crypto Industry in 2024

1) Optimization: Infrastructure in 2024

The maturity of infrastructure has made crypto technology no longer a bottleneck for industry development. This achievement stems from extensive technical optimizations rather than disruptive new architectures. These optimizations may have finally equipped the crypto industry to welcome a "bull market," specifically including:

· More abundant block space;
· Development toolchains becoming increasingly refined;
· User transaction fees are nearly zero or completely waived;
· The complexity of wallet usage has been significantly reduced;
· The user experience of on-chain applications is gradually comparable to consumer-grade products in Web2.

Currently, the abstraction, performance enhancement, and reliability improvement of this infrastructure have just entered the 12 to 18 months phase. For example, the development of Ethereum L2, the stability improvement of Solana, and the application of wallet abstraction technology in real production environments have made progress but have not yet reached optimal levels.

2) Consolidation: Application Scenarios and Leading Winners in 2024

Two key application scenarios have gradually matured: speculation and stablecoins. These two scenarios have almost run through the entire development history of the crypto industry:

· Bitcoin (2009) is the earliest speculative asset in the crypto industry;
· Stablecoins are one of the earliest Token applications (USDT started in 2014).

Today, these two major scenarios have reached new peaks due to infrastructure optimization.

· Peak performance of speculation: Memecoins
Memecoins are the ultimate embodiment of speculative behavior, and their creation and trading have become extremely convenient and low-cost.

· Seamless integration of stablecoins
Tools like Bridge have made the issuance and trading of stablecoins unprecedentedly efficient.

3) The Stronger Get Stronger Effect of Leading Winners

As the industry develops, past leading winners are further consolidating their positions, and their advantages continue to expand. These winners include:

· Public Chains: Solana and Ethereum;
· Wallets: Phantom;
· DEX: Uniswap and Raydium.

These platforms have greatly benefited from the growth of stablecoins and speculative activities and can quickly adapt to market trends and speculative games like Memecoins or NFTs.

02
The Next Phase of the Crypto Industry

As the infrastructure bottleneck gradually fades, two other major bottlenecks faced by the industry are becoming increasingly apparent. These two bottlenecks have largely driven the current phase of consolidation and optimization and hindered further innovative breakthroughs in the industry from "zero to one."

1) Bottleneck One: Infrastructure Issues

The infrastructure bottleneck is gradually dissolving. Technical optimizations rather than breakthrough architectural innovations have brought significant progress to the industry. Today, the available block space on the blockchain is abundant, tools are maturing, transaction fees are close to zero, wallet usage has become easier, and some on-chain applications can rival the consumer experience of Web2.

2) Bottleneck Two: Hostile and Uncertain Regulatory Environment

The second bottleneck to be addressed is the unfriendly and uncertain regulatory environment. However, this issue seems to be gradually alleviating. The rise of Trump has given the crypto industry hope for clearer regulatory rules in the U.S., eliminating bad projects and helping positive participants in the industry grow.

With the improvement of infrastructure performance and the regulatory environment becoming clearer, the industry is about to face the breakthrough of the third bottleneck—talent issues.

3) Bottleneck Three: Talent Shortage

Since 2022, the number of new talents entering the crypto industry has been at a bottleneck. This is understandable, as negative news and an uncertain regulatory environment pose significant personal risks to founders. However, the lack of new talent directly leads to a stagnation of innovation from "zero to one" in the industry.

I believe this trend will begin to reverse next year through the following two steps:

A. Leaders in the consolidation phase will continue to expand their advantages. The success of these leading projects may exceed everyone's expectations. For example, Polymarket has proven this during this election cycle, and more similar cases will emerge in the future. As on-chain applications gradually gain mainstream acceptance (whether by consumers or institutions), we will see:

· Startups going public;
· More projects issuing Tokens;
· Society's expectations of the crypto industry's influence will be readjusted.

This is the first step in motivating a new generation of developers to delve into the crypto industry. Only by attracting more new blood can the industry usher in a true next breakthrough.

B. A new generation of entrepreneurs will redefine the industry based on first principles. These new entrepreneurs will no longer be constrained by traditional infrastructure and outdated ideas. They will conduct innovative experiments based on clear rules, focusing on the core of "ownership," bringing new products and experiences to users.

03
Future Outlook: Finding Stability Through Validation

Although the crypto industry remains volatile, with the arrival of new rules, new talents, and new ideas, we hope that in the next five years, we will clearly know: whether the crypto industry can transcend speculation and stablecoins to bring more real value.

"Ownership" may become a core element of new products and networks, establishing deep connections with users through economic incentives, leading to faster growth for these networks. Validation through breakthrough applications will become an important way to reduce long-term volatility.

The crypto market in 2025 is still worth looking forward to. As Bitcoin continues to break new highs, which sector will be the first to explode and carry the 2025 bull market? Feel free to cast your vote for the sector you are optimistic about:

To vote, please visit the official WeChat account of "Plain Language Blockchain."

Original Title: Beyond Speculation and Stablecoins: Crypto’s Next Phase?
Original Link: https://x.com/jessewldn/status/1860005233608323099
Original Author: @jessewldn
Translation: Plain Language Blockchain

Article Link: https://www.hellobtc.com/kp/du/11/5555.html

Source: https://mp.weixin.qq.com/s/K345Bqgighd42Ln-D8h7Yw

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