Diamond Hands Finale: My Top Four Moonshot Cryptocurrency Investment Opportunities

Original Author: Lao Bai, Partner at ABCDE Investment Research

It's been two years since I wrote the Diamond Hands series. Today, I bring you the third edition, which is most likely the final edition of the Diamond Hands series. This is because in this cycle of the crypto world, apart from rewarding BTC Diamond Hands, pretty much all other diamond hands have been mercilessly washed away. The previous Diamond Hands series leaned towards seeking Alpha, but this edition leans towards Beta, as some of the previously diamond-handed Alphas were left battered and bruised, making it a painful memory.

The biggest Beta, of course, is still the top four: BTC, ETH, SOL, BNB. As for my personal picks for the Altcoin Beta, I am currently bullish on these four and plan to continue holding.

1. AAVE - AAVE is one of the few assets outside of the top four where you can hold long-term and sleep peacefully. Its TVL has surpassed its previous high and reached over 30 billion, and what's even more commendable is that over the years, there hasn't been a major security incident. Even traditional financial institutions like JP Morgan dabbling in blockchain are opting to test on AAVE first.

This wave of RWA+ stablecoins, the integration of blockchain with traditional finance, enhances efficiency rapidly and cost-effectively, destined to be the primary direction of blockchain's future development. Besides public chains, the certainty of Uniswap/Curve being part of this trend is not as high, whereas AAVE is a leading asset that is certain and sure to be on this bandwagon. With the launch of V4 in the coming months, it is highly anticipated, making it worth holding onto.

2. Pendle - TVL has already reached 6 billion, close to its previous peak, stable as a rock, and about to usher in the third wave

Pendle's first wave involved building on Sushiswap and some DeFi protocols, splitting off income from liquidity mining, but it didn't make much noise or gain popularity because those earnings were truly virtual.

The second wave involved the last wave of LST/LRT based on Lido and Eigenlayer, which soared high. After all, the actual earnings had declined significantly.

The future third wave will be the first wave of RWA and stablecoins. In traditional finance, income tiering and risk splitting are extremely important tracks, with a massive market (trillions of dollars). As more RWA and stablecoin assets come online, this track will undoubtedly rise with the tide. Unlike AAVE, that faces competition from Compound, Morpho, and others, Pendle pretty much dominates this track. It's as if they are the only player in the field, so far ahead that you can't even see their competitors with a telescope.

The only downside is that the price is too stable, with little fluctuation. Let's just dive in for a few months and see.

3. Hyperliquid - The strongest player among the projects launched in this cycle, without a doubt

The overwhelming user experience of Perps on other chains + overwhelming trading depth has led to overwhelming trading volume leadership and overwhelming market value leadership.

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

In addition to the current daily large-scale buyback, there is also the ecosystem development of HyperEVM, HIP-3's RWA Perp, and various other moves in the making.

However, Hyper is the only diamond hand that I haven't positioned in yet. The reason is that I sold off the airdrops from 4 to 10. Looking at the current market cap of nearly 50 billion, I feel some regret and hesitation. In the future, I hope to find a good entry point opportunity. I must get in; worst case, I'll wait for the next bear market to get in...

4. Bittensor - I've always been leaning towards being skeptical of Bittensor before, but only recently did I start to see the light and plan to get in for 6-12 months.

The reason for doubt is, of course, its PMF. Since 23, I have been questioning it, and even now, I still have doubts, always feeling that Bittensor is very similar to Filecoin.

Filecoin filled with garbage data without real business demand, Bittensor creates demand without real business demand and then miners mine a seemingly useless inference result. Last year, there was a lot of drama with miners colluding with validators to spread Rumors about emissions, etc.

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

So why did I recently see the light?

Firstly, in this cycle, Crypto has falsified a bunch of tracks and confirmed two tracks.

One of the confirmed tracks is Finance (DeFi, RWA, stablecoins all count), and the other is Gamble (meme, PolyMarket, and all forms of on-chain casinos also count).

Among the few that are still proving themselves, Crypto+AI is definitely a major player, and in this field, even if it cannot be proven in the short term, it is also very difficult to completely disprove.

And among all the current AI+Crypto projects, the most difficult to disprove is Bittensor.

There are several reasons for this:

It is ranked first by market value, and in this field, it is also first in Mindshare. When you think of Crypto+AI, you definitely think of it.

At the current stage, very few people can fully explain what Bittensor is all about. Don't believe it? Try to imagine yourself spending 10 minutes explaining Bittensor to a friend. Can you explain it clearly?

The current network has already expanded to nearly 100, and next year, reaching two to three hundred should not be a problem. Some networks really have achieved PMF+ and have income—although most clients are also Web3 projects, and although that income is negligible compared to Bittensor's market value...

In January and February next year, Bittensor will undergo a halving, similar to BTC with its 21 million hard cap. It experiences halving about every 4 years, and next year's halving will definitely be a major event.

In terms of emission mechanism and Mindshare, this can be seen as the BTC of the AIxCrypto field. And in terms of subnet design, consensus, and proof mechanism, it is like ETH—perhaps a star subnet will emerge with something truly PMF, just like Uniswap and AAVE did on ETH. After all, its subnet coverage ranges from decentralized training, to data, to computing power, to inference, text-image-video drug research, blah blah blah, covering almost every aspect. You can think of all the subfields of AI+Crypto, and basically there is one or more subnets messing around. So, compared to other projects, Bittensor is more like the tangible feeling of a fundamental platform like ETH, especially after the subnets can issue their own coins this year.

But Bittensor's biggest issue is also its very high market value. Just the daily emission alone exceeds millions of U, making it quite difficult to digest at this stage. If you think it's expensive, you can pay more attention around the first half of next year; you can either dive in or not at this time.

OK, even though the Diamond Hand series is coming to a close, coming back in the next two years to see if this final version of Diamond Hands can outperform BTC, so record today's prices—BTC-118275, AAVE - 312.7, Pendle - 4.43, Hyper - 44, TAO - 433.

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