The cryptocurrency investment landscape is undergoing a significant transformation, as highlighted by Ryan Connor, the Head of Research at Blockworks. In a recent discussion with Milk Road”s John Gillen, Connor declared that the once-popular “buy everything” strategy is no longer effective. The prevailing market dynamics have evolved, leaving many investors struggling to adapt.
Connor emphasized that the last market cycle favored tokens lacking substantial foundations, where mere branding and a compelling narrative could lead to massive financial gains. However, that trend has shifted dramatically. Today”s investors, particularly institutional players, are demanding more than just hype; they are looking for genuine teams, revenue generation, and real value within projects.
Market analysis indicates a strong correlation between cryptocurrency and the NASDAQ, suggesting that a comprehensive understanding of macroeconomic conditions is essential for crypto investors. Currently, the macroeconomic landscape appears robust, with favorable indicators such as a healthy VIX and tight high-yield spreads. The Federal Reserve is projecting a 5% GDP growth, bolstered by advancements in artificial intelligence and a wave of deregulation, which Connor describes as a release from previous regulatory pressures.
Connor also identified promising projects for the coming year, including Pendle Finance, which boasts significantly higher total value locked (TVL) compared to its competitors in yield stripping. This protocol is positioned to thrive regardless of whether stablecoins or perpetuals dominate the market. Another noteworthy mention is Hyperliquid, which offers a unique equity perpetuals product that traditional finance currently cannot replicate.
Despite these opportunities, Connor cautioned about the risks involved. The fast-paced nature of trading can lead to rapid platform shifts, and established players like CME, Robinhood, and Coinbase may quickly catch up as regulatory environments evolve.
The sentiment among investors is shifting. Many are now focused on identifying projects that demonstrate longevity and resilience in the face of changing market conditions. Recognizing which cryptocurrencies are built to endure will be crucial for future success in this dynamic sector.
