We were not going to do this but giving the amount of “dude-hey-hey-am-I-too-late-should-I-buy”s we received last months, here it is.
The following is a set of “predictions” by DeepWaters team regarding the upcoming cycle. Most of the “predictions” pertain 2024 as a calendar year, but more broadly are meant to encapsulate our vision on the upcoming bull cycle which will likely include some part of 2025.
We use quotation marks around “predictions” to emphasise its entertaining nature. The following provides a general indication of what we are excited about in the upcoming cycle and should not be construed as financial advice. Read our “predictions” as part of doing your own research lest you get rekt.
You will have one more buy chance, anon, because the bull market has not yet begun.
We at DeepWaters avoid idiocy and never time the market but if you’ve been wondering over the last months whether you’re too late for the party -
first, what the hell have you been waiting for in 2023???
second, — no, we do not think you are late.
We think there will be another buy opportunity later this year.
Once we formed the soft landing consensus last year, the market started to optimistically price it in, resulting in the goldilocks environment of Q4 2023 — Q1 2024.
The general feeling is “everything seems to be all right and even if it’s not, we will be given a ton of money”. Bad news will be good news, and we tend to generally align with this view but it doesn’t mean we’re going to move up only from now on.
The current optimism is largely based on Fed efficiency assumption. Yellen and Powell have indeed been doing a miraculously good work given such a bizarre business cycle conditions where we had to raise interest rates >20-fold in attempt to tame the post-covid injection.
However, we are by no means out of the woods:
Many U.S. leading indicators have now been in recessionary territory after >20 months of consecutive declines.
The yield curve has been inverted and it starts straightening up, which has historically always been the last-cycle symptom of trouble.
We start seeing early signs of “sticky inflation” a-la 1960s.
Historically, every time mass media started using the “soft landing” formula, a recession followed right away.
US Labour metrics look like they prepare for an explosive unemployment jump.
Giga chads from 42 Macro signal the wavering of “Goldilocks Regime” indicators for the upcoming 6-month horizon.
China really doesn’t look great. As well as some other economies.
GOLD is breaking out of the 4-year sideways range.
Q2 2023 — Q1 2024 rally has been heavily Bitcoin-led, which is absolutely normal. But it seems indeed to be fully catalysed by the ETF inflows so far. Retail has just started to return as per the Google trends and crypto social media stats.
From what we gather, the current Fed cabinet is firm in its intention to keep “higher for longer” policy up until the point of
Of what? If history is any indication, such attempts have never been quite timely. It looks like Jerome Powell is inclined to exploit the labour markets resilience up until the point it’s no longer viable. In a sense, they are going to “snipe the entry point”.
We as investors are wise to never try to time the market. Why would Fed do that?
We don’t know why but we firmly believe that even if the Federal Reserve threads the needle this time and manages a real soft landing (which only happened once in the entire FED history), it won’t be a mosquito bite for the risk-on markets. A meaningful pullback of 30% from the current BTC levels is a reasonable thing to expect.
Here’s how it might play out:
🟠 — US Federal Reserve Interest Rates (currently high for long)
⚪️ — Bitcoin Dominance (consolidating before the last spike up)
🟡 — US Federal Reserve balance sheet (currently in QT mode)
The real bull market lies ahead. After BTC halving, the no-longer-profitable miners will exit, the weak ETF hands will take profit and something will get overdue to break in the economy. What happens then?
Markets down. Risk-off. Fed is forced to pivot. Rates down. Spending up.
BTC.D will speed travel to 58% and linger in preparation for the reversal towards the full banana mode where THE REAL ALT SEASON finally begins.
DO NOT FoCK THIS UP, DEGENS. Do not fock this up. You’ve been warned.
Prediction 2: The Triarchy
Before the new cycle top, there will be at least 3 crypto assets with their spot ETF available for investors in the USA: BTC, ETH, and SOL.
If you’re doubtful about ETH ETF — you probably don’t understand just how skilful the Wall Street wolfs are at selling products to their customers and you probably underestimate the American case law system. The precedent has been created and the official applications filed. It is only a matter of time.
If you’re doubtful about SOL ETF — you are probably still delusional about Solana ecosystem. You probably consider it a pump-n-dump shitcoin. And you might be right, and only time will tell. The things is, though, —
The time has already spoken, and it said you’re wrong.
It is ridiculous how ignorant and inefficient crypto market can be. 2023 was undoubtedly the year of Solana Rebirth with the public sentiment turning overnight from “the Scam Bankman-Fried puppy” to “the integrated incumbent”.
This is how Messari viewed Solana mid 2023:
“Fundamentals” on par with Ethereum.
Our view was even more in favour of Solana as well as other next-generation chains. When we realised these two systems were priced at the whopping 20x distance from each other, we couldn’t believe it. We still don’t.
Michael Saylor has famously said:
You will never meet a Bitcoin critic who says: “I spent a thousand hours studying this technology and let me introduce my 26 concerns.” It just never happens.
It never happens indeed.
What we have noticed, however, is that a similar observation is quite applicable to the Solana technology, as well. All the criticism you see is mostly based on the bad publicity ensued by FTX or annual outages, or the sh*tty docs, or some other superficial arguments that completely miss the point.
And the point being:
The best aggregated trading experience right now — on Solana.
The majority of high-value pre-token DeFi — on Solana.
The most exciting consumer dApps initiatives — on Solana.
The best DePIN — on Solana.
The fastest permissionless software in history is being built — for Solana.
The wittiest meme communities — in Solana.
The best NFT marketplaces — on Solana.
The list can go on and on but most importantly: the only truly battle-tested and decentralised chain that proved competitive performance under meaningful duress — is Solana.
If you are curious as to what exactly we are referring to — stay tuned for the upcoming series of Solana reports we are going to release in 2024.
Or, alternatively, you can just look at this picture:
The second cycle introduced the second blue chip and originated their imaginary rivalry.
The third cycle is introducing the third major asset thus forming a blue-chip triarchy with formidable adoption.
And Then There Were More. And we’re long them all.
Prediction 3: Solana Unicorns
At least 10 new unicorns pop up on Solana across the DePIN, DeFi, and Culture verticals.
While we were preparing this publication, the current local bull run has already screwed us on the culture side via WIF and BONK price action.
We are going to exclude them and stand by the number: 10 more unicorns on Solana by the end of 2024 in addition to the following tickers: WIF, BONK, RENDER, HNT, PYTH.
On the DeFi side, in 2023 we developed a DeFi 2.0 Thesis largely consistent of Solana-based projects like Jupiter, Jito, and many other names the midcurvers are now so busy farming (oh, we are midcurvers alright).
As a matter of fact, we think the DeFi alone will likely give birth to 10 unicorns on Solana, creating an astounding amount of Solana-native wealth.
OPOS-DePIN is one of our biggest convictions for the long term. We are going to introduce a series of dedicated DePIN reports throughout 2024 for you to ❤️successfully ignore while trading memecoins❤️.
Not because of the tech but because of expectations. For some reasons, it doesn’t deliver literally one million TPS and nobody cares any further than that.
It will also possibly provoke another outage or some bug.
Because people have little patience towards complex matters, it will be falsely dubbed as “failure” and chances are, this event will correspond to the SOL cycle top (above $800) before entering the distribution phase towards the next bear market.
As is often the case, it will be much later when we realise that we were given the most superior open-source software in human history.
Prediction 5: Bitcoin & The Cycle Top
“Bitcoin is going to reach ATH before the US election finale.” — was what we were going to write but then February 2024 happened and it was no longer bald enough to count as a proper “prediction”.
“Polymarket gives 92% chance of BTC making ATH before halving — something that never happened before” — that was our version when the text was being edited.
By the time you will read it, new ATH will have already been reached.
Whatever, really. It doesn’t matter much at this point when and how BTC makes the new all time high.
What will matter is — after we enter the Banana Zone toward 2025, at some point of the cycle you will see the good old classic:
As the retail investor comes back, and the alt season steams ahead into the bull market, the mainstream media will start chipping in the craze with institutional pundits claiming “BTC might go as high as 500k this cycle” further looping in the euphoria.
We all know what it will mean — the cycle top has been in.
Prediction 6: EigenLayer & The Cycle Top
EigenLayer is arguably the most important event in the largest smart contract community in crypto. Maybe it’s even the biggest innovation in industry. Time will tell.
But if you think the restaking narrative is hot now — you are not prepared.
Across the cycle, liquid restaking will become the single hottest narrative, hands down. Your mother will likely launch her own LRT.
The yield bliss regime on LRT is going to be the quintessence of the cycle’s euphoria, much akin to DeFi Summer in 2020, NFTs 2021 and P2E 2022, or the current soldogs season, only much-much more penetrative and impactful across the entire ETH supply chain.
At some point, The EigenLayer High Elves Committee will succumb to the complacency and loosen its grip, allowing for more permissionless-ness across the stack (as is officially planned, btw).
And then something goes terribly wrong.
A series of slashing events takes place.
Or a major bug happens.
Or something else that show-cases how we never really understood the way it was supposed to work.
Turns out it was a sneaky leverage all along, for all we know.
Turns out the stakers wouldn’t really care even if it really-really wasn’t.
An ugly implosion happens bringing a major narrative shift and heated debates across Ethereum community. The identity crisis ensues.
This marks the cycle top on Ethereum side of things.
Vitalik seizes the moment to re-enforce the “enshrinement” caucus across the Ethereum parliament. New wordings take over. The Frankestein’s modularity thesis fades away (even though it won’t die).
Hopefully, it will be replaced with another thesis that will differ from what can be observed now throughout the ecosystem. The non-aligned EthDenver guests summarised it as follows:
ETH/BTC falls below 0.04 at some point, giving the last generational buy opportunity for newcomers. Coz Ethereum will be fine. Just fine.
DON’T FoCK THIS UP, DEGENS. don’t fock this up. You’ve been warned.
Prediction 7: NFTs Resurrection
NFTs ATH is a given but what you might not expect is that it will be led by Bitcoin.
What you can observe on the markets in 2023–2024 is inscriptions shutting down entire networks, effectively becoming the benchmarking stress test for blockchains throughput.
We tend to see the current Wash dynamic further pushing market share in favour of Bitcoin and Solana, with its MagicEden pivoting towards BTC-centric marketplace.
A new dedicated NFT-centric Layer 2 on Bitcoin raises a $100m round and becomes the new Blast.
At least one Solana or Bitcoin pfp will flippen CryptoPunks by floor price. Yup.
Prediction 8: No Flippening
ETH will outperform but not flippen BTC.
SOL will outperform but not flippen ETH.
USDC will outperform but not flippen USDT.
L2s will collectively concentrate EVM-compatible TVL and will mostly outperform ETH. But they will not flippen the base layer in TVL or DEX volume terms for longer than 1 month.
This cycle, we will see the first signs of power-law distribution across the rollup realm, much akin to what has been happening across the realm of L1s ever since 2017.
Investors will need to allocate capital long term and they will make choices based on technology, sex, and Lindy effects (i.e. 6-month history, duh).
Monad will emerge victorious and its success will make EVM liquidity spread even thiner (partially contributing for L2s not flippening the base layer). The fragmentation will go on as more and more prominent parallelisation initiatives enter the stage:
Legacy L2 chains, too, will start rebranding (or pretending) to catch up on the parallelisation narrative. Polygon the loudest. Polygon will always be the loudest, no matter the narrative.
Prediction 10: ZK Fading
ZK-enabled layers will not deliver on their promise just yet as this technology is still rather expensive to be a natural match for a whole DeFi system top-down.
Zk rollups arrive in mainnet in 2024 and they are somewhat scaled but not up to the point where it can be a deal breaker for ETH DeFi.
The upcoming cycle is going to familiarise the broader crypto audience with other privacy/confidentiality enabling technologies, like Fully Homomorphic Encryption:
You will understand nothing and you will be happy.
Prediction 11: RWA Fading
It will be only natural to see how RWA-enabled yield-bearing assets give way for riskier narratives during the bull phase mania.
In the future we are going to see RWA TVL as a standalone metric for blockchains and it will be just as meaningless as the regular TVL. But that will happen after the bull phase is over.
RWA vaults are bear market friendly and they will not become a hot topic for the months to come.
Prediction 12: AI Not Fading
AI is not a temporary narrative and it is not going to fade away during the banana time. It is going to lead it.
“Artificial Intelligence” Coingecko category market cap reaches $100b by the end of 2024.
Akash Network pulls out an easy 10x ($10b MC) by the end of 2024 as it becomes progressively more outrageous for centralised exchanges to continue excluding it from their listings.
Io.net easily penetrates top 100 sometime in 2024 after TGE in April.
Prediction 13: Consumer dApps
Consumer dApps will not arrive in the full swing this cycle.
As much as we agree with the “useless infra” thesis here, we do not see any truly adopted applications becoming mainstream within the next 2–3 years.
We are super pumped about the pioneers like xNFTs, DRiP, Farcaster, and Kaiching but it’s gonna take many more of them for us to victoriously proclaim the mass adoption.
It is close. Very-very close. But we need just one more infra cycle.
Prediction 14: Memecoins Season 2
If you think memecoins are hot now, it is probably your first cycle.
When we enter Banana Zone…. You are not ready for what’s coming, anon.
EIP-4844 will give extra burst to scale the Ethereum blockspace… for the main purpose of reinforcing its memecoin dominance via rollups, thank you very much. At least 5 new meme unicorns across Ethereum layers by the Q4 2024.
PolitFi will have its secondary-craze moment near the US election finale. Candidates’ memecoins will turn into prediction markets: $TREMP market cap $5.01b, $BODEN $4.99b. Solana splash continues with $WIF reaching $10.
At least one multi-billion cat coin comes on stage on Solana. Seriously, how long can we go on living without a capitalised cat and pretend it’s not a big deal?
It’s just unfair. We won’t take it anymore. No, sir.
Prediction 15: Hybrid Exchanges
“Hybrid exchanges” will become a narrative.
Cube will lead the secondary Solana farming season after the DeFi bluechips terminate their programmes. Cube will lead SOL/USDC DEX volume at some point in 2024.
Analogous projects will get announced somewhere later in the cycle on Arbitrum and EigenLayer.
DEX/CEX will struggle to make its ATH in 2024 but will ultimately make its mean reversal closer to 2025 as we move closer to the cycle top.
Prediction 16: Move
Market is not ready for what Sui is going to show.
Primary adoption driver will be the level of dev abstraction as well as security and UX. If you like your user experience on Solana, you should go check out what it feels like on Sui.
Throughout this business cycle, Move will become much more recognised and adopted both natively and as part of EVM parallelisation movement.
Sui penetrates top 10. Aptos vampire-benefits.
Prediction 17: Stablecoin Bill
It has become quite obvious by now the Stablecoin Bill in the US is arriving soon, most likely in 2025.
Read here how and why stablecoin business is one of the best crypto-powered PMF in the world at the moment.
After the bill is approved, it’s going to accelerate adoption tremendously thus giving the final home run corridor for consumer dApps to arrive, ultimately leading us to mass adoption.
Circle will have conducted IPO by then and it will be mispriced for some time, just like COIN.
Prediction 18: Bitcoin DeFi
Bitcoin DeFi becomes a thing, and all the skeptics are face-washed like you won’t believe.
Dozens of Bitcoin L2 projects are going to hit the market in 2024 and there’s no reason to think they will not be perceived as a Bitcoin beta play, from the narrative perspective at least.
Btw, Asymmetric has launched a dedicated BTC DeFi Fund. And so did other prominent names in crypto VC.
During the Banana Phase, retail rationale is going to be as follows:
Optimism has $4B MC which makes 0.9% of the market cap of ETH.
Stacks has similar capitalisation but it is only ~0.3% of the BTC market cap.
“That’s a no-brainer 3x, dude.”
An even higher multiple will, therefore, be applied to the newer BTC tickers.
We do not ever recommend anyone to employ such frameworks too often too serious, but we tend to think that’s how the market will price things throughout the upcoming cycle in 2024.
Stacks penetrates top-20.
Prediction 19: Solana DePIN
Solana DePIN is going to get more appreciated and you will be kicking yourself for fading it in 2023.
Hivemapper puts in the 15th unique km and publicly discloses its first Tier-1 customer some time throughout 2024, most likely a ride-sharing company.
There are many more smaller caps initiatives cooking on Solana, but generally speaking, the DePIN vertical is one of the highest long-term convictions we arrived at in DeepWaters, and it isn’t limited to Solana or North America.
Yet, DePIN will not become the hottest narrative of this cycle. It will be the post-banana risk-off environment when we will collectively appreciate just how healthy and profitable of a businesses this vertical is.
Then, we will be proud of ourselves (coz it’s crypto!).
During the next bear phase, we will use DePIN to annoy our normie frens with “what tokenisation can unlock for global economy while you idiots just look at the price”.
They will not care. Again.
But they will return next cycle. Again.
And they will buy. Again.
And you will be ahead. Again.
Prediction 20: Bull Market Top
Crypto asset class total market capitalisation makes the cycle top on Feb 17, 2025, at $9.07T.
Why? Because you touch yourself at night.
YAGMI, brothers.
The bonus prediction is about you, anon.
If you’ve managed thus far — we are glad to officially inform you that You Are Going to Make It.
See you on the other side of FUD, inside the Banana Zone.