Navigating Institutional Bitcoin Adoption - What to buy in 2024

Crypto is seeing more major adoption than ever before. These are the major market events and our major picks and sectors to explore for the best risk-to-reward ratio during the imminent adoption phase.
by Yoaquim Boom
June 29, 2023

After devoting considerable time to market analysis and reflection, I find myself continually intrigued and bewildered by its dynamics.

In my humble opinion, Binance stands as the sole significant risk within the crypto market at present.

Nevertheless, given the surge in prices and heightened activity, I anticipate Binance will maintain its stability.

The ongoing SEC case against Binance might not yield substantial consequences unless it triggers a market-wide downturn and instills a lack of confidence.

However, even in such an event, I believe it would not serve as a sufficient catalyst. Instead, the only catalyst that could potentially affect Binance significantly, in my opinion, would be an FTX/FTT liquidation event for BNB.

On a positive note, there have been numerous developments indicating increased crypto adoption by major firms & statements by officials indicating a nimble stance.

These developments include:

- WisdomTree, an asset manager with an $87 billion portfolio, filing for a spot Bitcoin ETF.

- Citadel, Fidelity, and Charles Schwab jointly launching a new crypto exchange platform named EDX Markets.

- Deutsche Bank, a German asset manager overseeing $1.4 trillion, applying for a regulatory license to provide crypto custody services.

- Mastercard filing a trademark application to develop crypto and blockchain software.

- The International Monetary Fund working on a digital currency platform for cross-border transactions.

- Invesco, an asset manager with $1.5 trillion under management, reviving its spot Bitcoin ETF filing.

- Federal Reserve Chair Jerome Powell acknowledging stablecoins as a form of money and recognizing crypto as a viable asset class.

- Investment firm Valkyrie filing for a spot Bitcoin ETF.

- BlackRock, the world's largest money manager, applying to create a Bitcoin exchange-traded fund.

These positive developments indicate promising trends in terms of price action.

While I have maintained a bearish stance on the macro situation and believe that the worst is yet to come, I must admit that Powell's Federal Reserve has been remarkably impressive. It is quite bewildering how they have managed to navigate these turbulent times without catastrophic consequences.

From a macro perspective, I still anticipate the possibility of retesting some lows. However, the current outlook appears relatively positive. Nevertheless, I harbor concerns regarding the underlying economic issues, which may be masked by the seemingly favorable conditions and have the potential to resurface later on. It is akin to concealing a problematic situation with a facade of attractiveness. The US national debt of $32 trillion, coupled with daily interest payments of $1.7 billion, raises concerns about the overall health of the economy. Nonetheless, for the time being, things seem to be under control.

Although I remain uncertain about the macro situation and strongly believe there is a considerable chance that everything is teetering on the edge, with impending challenges delayed for the future, it appears that the crypto market has reached its bottom, unless extraordinary circumstances linked to Binance materialize.

Now, let's delve further into the potential positive outcomes, particularly for the crypto market. I would like to discuss my top picks for projects, encompassing both specific projects and sectors.

Firstly, I must highlight some essential aspects to grasp—the key trends and crucial infrastructure elements. To begin, let us consider the gaming industry, which not only serves as one of the largest economic drivers globally but also stands as the fastest-growing industry. The combination of these factors suggests that gaming will continue its robust growth trajectory in the foreseeable future.

Moreover, with the increasing interoperability of games, advancements in realism, virtual reality (VR), artificial intelligence (AI), and the concept of the metaverse, we are poised for an exhilarating ride. So, where does crypto fit into this picture? It will be at the very heart of this industry.

Players now desire greater interoperability for their games, the ability to make nimble in-game purchases across different games, and the capacity to make their investments more worthwhile. How can these goals be achieved? The answer lies in non-fungible tokens (NFTs).

Additionally, players will seek to have their in-game progress hold real-life value. Imagine being able to trade the virtual cash you earn in a game for actual money. In fact, a major gaming franchise, GTA, recently announced that players will be able to convert their in-game cash into real currency in their upcoming release, GTA 6. Although the exact mechanism remains uncertain, it is likely to involve a blockchain-based smart contract system.

This growing trend of in-game monetary incentivization and inter-game interoperability will serve as significant drivers within the gaming industry, and both aspects heavily rely on blockchain and cryptocurrency.

Moreover, the metaverse, a concept deeply intertwined with crypto, will play a pivotal role in the industry's future adoption. Any advancements in metaverse adoption will be closely correlated and linked to the adoption of crypto.

Considering these factors, here are some noteworthy picks related to the gaming side of crypto:

- SAND: A metaverse world host.

- RNDR: A project partnered with Apple that allows the lending of computing space.

- MANA: Another metaverse world host.

- APE: A metaverse world host.

- VRA: A monetarily fair and incentives streaming network.

- PYR: A metaverse infrastructure provider.

- ADS: A platform enabling advertisements in the metaverse.

- DG: An on-chain gambling platform.

- UOS: On-chain gaming infrastructure.

- Enjin: An on-chain gaming and metaverse infrastructure project.

Moving on, I would like to touch upon infrastructure within the crypto space and highlight certain projects that will be vital for widespread adoption.

Infrastructure and interoperability are key factors in the success of blockchains. Different chains, such as Ethereum and Binance Chain, provide the foundational infrastructure for other tokens to be built upon as Layer 2 solutions. These base infrastructure tokens are essential for smaller, less-established crypto projects to develop.

During a bull market, these base infrastructure tokens tend to perform exceptionally well, despite their already high valuations. Some notable examples include Bitcoin, Ethereum, BNB, FTM, Polygon, Algorand, Cosmos, Solana, and Avalanche.

However, one issue that arises is the limited interoperability and inter-chain communication between these Layer 1 solutions. For instance, Ethereum Mainnet and Binance Chain Mainnet lack seamless communication channels, creating a bottleneck effect that restricts easy transferability between chains.

Thankfully, this challenge is being addressed, primarily by one standout cryptocurrency poised for a promising future during the upcoming adoption phase of crypto—ChainLink.

ChainLink holds immense significance in enhancing interoperability, and no other project has made comparable progress in this field. Moreover, ChainLink has demonstrated impressive resilience compared to other crypto projects during the recent months of the bear market, only experiencing ranging price action and not setting new lows until the crash triggered by Binance's SEC case last week. This resilience suggests strong long-term holder interest in ChainLink and potential increased accumulation during this bear phase, positioning it as a possible standout performer.

To summarize, these are my major picks and sectors to explore for the best risk-to-reward ratio during the imminent adoption phase.