Diamond Hand Final Chapter: The Four Altcoins I Am Bullish On

From chasing Alpha to guarding Beta, lock in four targets, note the current price, and see if it can outperform BTC, drilling into the next cycle.

Written by: Lao Bai

It has been two years since I wrote the Diamond Hand series. Today, I'm releasing the third version, which is likely to be the last one in the Diamond Hand series. Because in this cycle of the crypto world, apart from rewarding BTC diamond hands, most others have been ruthlessly extinguished. The previous Diamond Hand series leaned towards finding Alpha, while this issue leans towards Beta. After all, some Alpha in the past were completely wrecked after being harvested, making it truly hard to look back at those times.

The biggest Beta is of course the top three: BTC + ETH, SOL, BNB. As for altcoin Beta, I personally currently favor the following four and plan to delve deeper into them.

1. AAVE - AAVE is one of the few assets besides the top three that you can hold long-term and sleep well at night. The TVL has already broken the previous high, reaching over 30 billion. What is even more commendable is that there hasn't been a major security incident in all these years. Traditional financial institutions like JP Morgan are also testing the waters in blockchain, and they prioritize AAVE for testing.

This wave of RWA+ stablecoins, combining blockchain with traditional finance, greatly enhances efficiency, making it the primary direction for future blockchain development. The assets that can ride this wave, aside from public chains, have less certainty than Uniswap/Curve, while AAVE is definitely a leading asset that will be on board. The launch of V4 in the coming months is also highly anticipated, so it's worth a deep dive.

2. Pendle - TVL has reached 6 billion, close to the previous high, stable as a rock, about to迎来 the third wave

Pendle's first wave is backed by Sushiswap and some DeFi protocols, splitting the yields from liquidity mining and other sources, but there hasn't been much buzz or heat, as those yields are indeed quite illusory.

The second wave is based on Lido and Eigenlayer's LST/LRT, soaring to great heights. After all, the returns have indeed improved significantly.

The future third wave will be a wave of RWA and stablecoins. In traditional finance, yield tranching and risk partitioning are extremely important sectors, with a massive market (over 10 trillion). As more and more RWA and stablecoin assets come on-chain, this sector is bound to rise along with the tide. Moreover, unlike AAVE, which faces competition from Compound, Morpho, etc., Pendle is basically the only player in this sector, where you can't even see competitors through a telescope.

The only downside is that the price of the coin is too stable, with not much fluctuation. Let's take a look for a few months first.

3. Hyperliquid - The strongest player in the token issuance projects for this cycle, without a doubt

The overwhelming user experience of Perp on other chains + overwhelming trading depth has led to leading transaction volumes and overwhelming market cap.

Moreover, Hyperliquid is not positioned as a Perp; it is an on-chain Liquidity Layer. The recent integration with Phantom is the best proof of this, and there will be more front-ends connecting to the Hyperliquid liquidity backend in the future.

In addition to the large amount of buying and repurchasing happening every day, there is also the creation of the HyperEVM ecosystem, various preparations such as HIP-3's RWA Perp, and more.

But Hyper is the only diamond hand I haven't built a position in yet. The reason is that I sold the airdrop 4-10 too early. Seeing the current market cap of nearly 50 billion makes me feel a bit resentful, and I can't bring myself to buy now. I hope to find good entry points in the future because I definitely want to hold. If not, I'll just wait for the next bear market to buy in...

4. Bittensor - I have always been biased against Bittensor until recently when I realized I want to start supporting it, planning to dive into it for 6-12 months

The reason for the blackness is naturally his PMF. I started to question it 23 years ago and still do. I always feel that Bittensor is very similar to Filecoin.

Filecoin fills with garbage data without real business demand, Bittensor creates its own demand without real business needs, and miners churn out reasoning results that are not useful. Last year, many miners colluded with Validators to take advantage of emissions, resulting in various dramas like Rumor...

So no matter how you look at it, this thing seems like Filecoin.

So why did you figure it out recently?

First, Crypto has debunked a lot of tracks in this cycle and confirmed two tracks.

The confirmed tracks are one in finance (Defi, RWA, stablecoins all count) and one in gambling (meme, PolyMarket, and various forms of on-chain casinos all count).

Among the few that are still self-evident, Crypto+AI is definitely the largest, and even if it cannot be proven in the short term, it is also difficult to completely disprove it in this field.

Among all the current AI+Crypto projects, the hardest to disprove is Bittensor.

There are several reasons for this.

1. It ranks first in market value, and in this sector, it is also the first in Mindshare. When you think of Crypto+AI, it is definitely the first one that comes to your mind.
2. At the current stage, there are very few people who can clearly explain what Bittensor actually does. Try it yourself and see if you can clearly explain Bittensor to a friend in 10 minutes.
3. The current subnets have almost reached 100, and next year there should be no problem reaching two to three hundred. Some subnets really have PMF+ and are generating revenue - (although most customers are also Web3 projects, that little revenue can be ignored compared to Bittensor's market value)……
4. In January and February next year, Bittensor is going to halve. This thing has a hard cap of 21 million like BTC, and it halves approximately every 4 years. The halving next year is definitely going to be a big event.

In terms of emission mechanisms and Mindshare, this thing can be seen as the BTC of the AIxCrypto track. The subnet design, consensus, and proof mechanisms are somewhat similar to ETH - if a star subnet emerges with something that truly has PMF, it would be like Uniswap and AAVE emerging on ETH. After all, its subnet coverage ranges from decentralized training to data, computing power, inference, textual images, video drug research, blah blah blah, everything you can think of in the AI+Crypto subfields basically has one or several subnets working on things. So compared to other projects, Bittensor feels more like a foundational platform similar to ETH, especially since subnets can issue their own tokens this year.

However, Bittensor's biggest problem is also its high market value, with daily emissions exceeding one million U. At this stage, digesting it is still quite challenging. If you think it's expensive, you might want to pay special attention to it in the first half of next year; currently, it can be explored or not.

OK, the Diamond Hand series has officially concluded. Let’s see if this final version of Diamond Hand can outperform BTC in the coming years, so let's record today's prices - BTC-118275, AAVE - 312.7, Pendle - 4.43, Hyper - 44, TAO - 433.