2024 and the 4th bull run
Hi everyone, I hope you are all safe and healthy. 2023 wasn’t easy for me, but I’m looking forward to 2024, so I thought I’d share with you what excites me and my predictions (because my wife doesn’t want to have this conversation with me anymore).
At the beginning of the winter, I wrote this article explaining the Bitcoin cycles: link here.
A quick reminder: Bitcoin followed a 16-year cycle based on the Halving cycle, where mining rewards are cut in half. Each cycle is divided into three parts: Bull, Winter, and Recovery. Recovery occurs about six months before the halving, and the bull market starts after the halving.
We are entering the recovery stage, feeling the last winds of winter, and may see some light at the end of the tunnel.
There are a few things I believe will be game-changing in the next cycle. I will write a separate, detailed blog post about each, but at a high level:
Getting closer to solving the Blockchain Trilemma + usage
- I find the Ethereum ecosystem to be the most mature. Maturity, in my eyes, is how close the ecosystem is to solving the blockchain trilemma, which refers to the trade-off between three critical aspects of blockchain technology: Security, Scalability, and Decentralization coupled with usage. Ethereum doesn’t do it by itself; the solution is led by the L2s movement, with projects like Polygon, Celo, Arbitrum, and Optimism leading the way.
The adoption of digital assets in markets with weak financial systems
- You’ll hear from people who benefit from the current financial system that blockchain is a solution looking for a problem, and there’s no market for it. India, Argentina, Nigeria, Vietnam, Lebanon are all suffering from inflation, and people are tired of waiting for the government to solve the problem.
Attached is a Chain analysis map of blockchain crypto adoption: link here.
Those people have the ability, willingness, and self-proclaimed authority to change their lives, and that’s what we call a market.
The rise of “real-world” applications:
The internet was the revolution of information; for the first time, there was a long tail of people inventing new ways of passing information between one another. First and most known was “e-mail”, when we put mail on the internet and turned it into a digital application. As big as email was, the “interesting stuff” came later when we stopped just imitating digitally what already existed and now have various forms of social media.
Blockchain is the revolution of value. For the first time, there is a long tail of people inventing new ways of passing value between one another. A big subject today in the blockchain space is RWA (Real-World Assets), which I’m very excited about, but I compare it to email. It’s a big milestone for financial evolution, but it’s only the beginning of entrepreneurs imagining how we can rebuild financial instruments like credit, insurance, investing, companies, and so on.
Books
Finally, money is a technology, and i believe it to have the biggest impact on our social structure and vice versa. I find history, monetary history, and patterns analysis to be some of the most interesting ways to analyze where are we going, and where we should be going, I’ll leave you with two books recommendations that I’ve found insightful on the subject lately.
- Lyn Alden — Broken Money
- Neil Howe — The Fourth Turning is Here.
Hope you enjoy reading. I’ll be back shortly with a deeper discussion of the three game-changers above. I’m always happy to hear your take on my thoughts.
Best,
Tomer
