If you are a new trader in the cryptocurrency space, entering into a bear market is the best-case scenario if you are looking for top gains. The bear cycle presents new traders with the opportunity to create a portfolio that can skyrocket to its all-time high valuation in the next Bull Run. Therefore, investors no longer have to compromise their funds on risky, low-cap crypto coins. They can expect great returns simply from creating a portfolio that consists of reliable and relatively safer projects. Below is a list of cryptocurrency categories and projects that you can pay attention to if you want to prepare for a bull run.
Layer 2 Projects
Layer 2 projects help Ethereum to scale in terms of operability, functionality and transaction capacity, and speed. They provide another layer on the Ethereum blockchain so that users can send transactions and use decentralized applications on the layer 2 network. After the second layer comes into utilization, users can settle everything back on the Ethereum blockchain.
This not only allows the user experience to be secure and fast but also cuts down the gas fees to a great extent. This is because layer 2 is anchored to Ethereum underneath, and they are the crux of the modular blockchain thesis.
This thesis predicts that the future of blockchain does not require users to work all of their activities on a single block, which is the work model of the famous project, Solana. However, the more effective way would be to split up the different functions on different layers of the blockchain that are united as one.
These specialized networks and layers are an incredible approach. Ethereum plans to work on multi-layering at a greater scale in the future. They have created an ambitious growth map in which layer 2’s are front and center in their vision. In terms of projects, you should be looking at ZKsynch, Arbitum, Metis, Stark net, and others. Many of the layer 2 projects use cutting-edge technologies such as ZK proofs, which help enhance speed and scalability.
DA projects or Data Availability projects are also a pivotal component of the modular blockchain thesis. There are three functions that all blockchains perform, the first being execution and the second being settlement action. The third function is the consensus action which keeps all data accessible and available to the users. This category focuses on the third section of the modular function, which relates to keeping copious amounts of blockchain data that is readily available for different nodes across a particular network.
Keeping data secure and accessible is an incredibly difficult task, while at the same time, it is a very critical endeavor. So far, this function is widely overlooked by the big players in the space. For this reason, specialized solutions have come into existence to tackle these problems. One of the most notable projects for data accessibility is Celestia. Polygon, (MATIC) is also a project that can be useful for data accessibility. Overall, these projects have great upside potential during the bullish markets.
Many experts predict that the Cosmos ecosystem can outperform the next bull market. This is primarily due to the project’s differentiated approach and design space. This experience is unlike Ethereum but is a faster and less costly approach. Cosmos has a highly scalable and exciting vision, in which it wants to create a bunch of different application chains and connect them through the Cosmos Hub.
You can find some big projects such as DYDX Chain that went the same route and created an application chain on the Cosmos ecosystem rather than constructing the app on a generalized layer 2 blockchain. Their decision to create this interoperable and usable ecosystem is very exciting for the crypto space. It is not too farfetched to imagine a world where there are specialized chains for every use case and every application. Therefore, it is a great idea to shortlist Cosmos, or projects in the Cosmos ecosystem when creating a portfolio.
Decentralized finance often performs great during a bull market, and this is a niche that creates great numbers in the traditional finance space. Robin Hood-style options are great choices in which you can enter and exit with a click of a button. You do not currently need anything near the level of user experience in decentralized finance projects. However, you can still find promising projects and platforms that are building toward it. For instance, HEGIC, RIBBON FINANCE, and OPYM are a few of the options that you can check out.
These categories of coins are not as serious as the ones discussed above, however, they are still an option to add to your portfolio in preparation for the next bull run. It is important to remember that during a bull run, the fundamentals of a token are not the biggest factor. In a bull market, speculators and FOMO warriors tend to flood the markets, and this puts fuel to the rise in meme coins. During these times, meme coins tend to go on massive rallies, and some also provide 100X gains. Some examples of meme coins that are popular include SHIB, DOGE, BONK, and more.
Artificial intelligence projects are also huge a part of the crypto space. Many AI technologies are taking the world by storm, especially with tools such as ChatGPT. The idea is that there are AI-related Crypto projects that benefit by association. During bull markets, strong narratives tend to matter more than fundamentals, therefore it is important to consider this category as a viable option. Some of the crypto projects in this niche include Ocean Protocol, Singularity net, and Fetch Network.
As you can see, many crypto categories include exciting projects that are way below their all-time high. As more innovation flows into these crypto niches, these projects will likely offer incredible gains to crypto traders that entered into the bear market. There are even more protocols that attract big-time investors. Overall, it is critical to stay ahead of the game and keep tabs on the new projects and protocols that are entering the crypto space. This provides you with a competitive edge when creating a crypto portfolio in the bear market that will be lucrative during the next bull run.