- Crypto moves in hype cycles, with millions to be earned in the right plays
- From ICOs in 2017 to metaverse last year, spotting a trend early can pay
- What are the contenders for the next crypto hype cycle?
Anyone who has been around the crypto space for any length of time knows that one thing drives prices – hype. The 2016/17 bull run was the first time crypto hype hit the mainstream, with the resultant boom and bust. Since then, the crypto space has seen hype waves carry projects and even entire sectors to the moon (and back again), with the metaverse and NFTs being the latest examples.
With the crypto sectors currently in the doldrums it’s a good time to cast the net around and see what sector could be the next one to ride the hype cycle and enjoy exponential returns.
Play to earn (P2E) games have been around for more years than you’d think, dating back to 2017 and the CryptoKitties craze. The space has grown massively in the last couple of years however, with faster and cheaper blockchains such as Binance Smart Chain ushering in a new age of P2E, and now there seem to be new games launching every week.
P2E games reward you for a variety of tasks, from completing to challenges to just competing, and apart from some big players such as Axie Infinity there hasn’t been a sector-wide run like we have seen with NFTs, DeFi and the like. With developers having months to create and launch better and better games, will P2E be the hype sector that booms in the next bull run?
One word – STEPN. This M2E project and its affiliated GMT token were all over Twitter back in March, with every man and his dog getting involved in the action, whether it be trading the token or actually using the product. When stripped back, STEPN and all such products reward you for doing a variety of activities, giving an extra incentive layer to exercise, something that all of us are lacking at times.
The performance of STEPN and the potential for the crypto market to take advantage of the fitness market in this new way could see the M2E movement take on a life of its own in the next market cycle.
DeFi 1.0 was one of the biggest winners in the 2020/21 bull run, but the sector has suffered more than many in the downturn, with DeFi futures dropping back to July 2020 levels. However, DeFi 2.0 is a new iteration of the nascent space that intends to address the risks present in DeFi 1.0, including the volatility of crypto, security concerns within smart contracts, and a lack of accountability to pay back loans.
DeFi 2.0 places more of an emphasis on security, of both funds and smart contracts, in order to attract large liquidity providers and take DeFi to the next level. There are also other developments, such as self-repaying loans, which use the collateral from yield farming (crypto staked within liquidity pools) to pay off loans, while the ecosystem is built on newer blockchains such as Solana, Polygon, and Binance Smart Chain.
DeFi 2.0 hasn’t had the chance to take off yet, but will the next market cycle be its opportunity?
All Crypto Hype Cycles Die
Of course, no one knows what will be the next crypto craze to catch on, but one thing is for certain – it will burn bright, and then it will burn out. Don’t be left holding the sparkler on the fifth of July.