Market participants are constantly looking for trends to help them understand what is happening, why it is happening, and what the potential consequences are. Historically, they have used the mechanics of market cycles to act more proactively in future markets. As a result, many investors utilize crypto narratives to forecast price action.
For example, the narrative of cryptocurrencies as a store of value has captivated many investors who see them as a hedge against economic volatility. Similarly, the narrative of blockchain as a disruptive technology has piqued the interest of many entrepreneurs and developers seeking to create new blockchain-based applications.
What Are Crypto Narratives?
Crypto Narratives are popular ideas or tales that dominate the cryptocurrency sector at any particular time. They essentially represent common views and expectations regarding blockchain technology and how its applications affect investor mood, market movements, and project development.
From NFT season to airdrop season, memecoins, and the assumption that the Bitcoin halving event stimulates bull runs every four years, investors (particularly in crypto) rely on these narratives as a North Star to guide their investment sentiment and actions.
This year, the blockchain sector has seen a boom of tales, each of which explores, reveals, and tests the technological possibilities. For an industry still in its early stages, the number and variety of narratives developing is astonishing. While these tales might be fascinating, they can also be deceptive or just forced into the spotlight due to excitement. As a result, before investing in these tales, it is critical to scrutinize them thoroughly.
How To Spot Trending Crypto Narratives?
Narratives frequently follow a time-based pattern. It is crucial to determine whether the narrative is short, medium, or long-term based on the distinguishing characteristics. There are a few approaches to catch narratives earlier:
▪️ Monitor sector-specific trends over time using tools such as CoinGecko & CoinMarketCap. These shifts represent capital inflows into sector-specific projects. After identifying significant benefits, it is critical to do research to get an understanding of the precise triggers for the narrative.
▪️ Identification of tales relies heavily on social intelligence. Crypto Twitter is one of the finest tools for detecting narratives early. Simple: once people start talking about it, the marketing and exposure are enough to generate a snowball effect that causes capital inflows into a sector. Tools like LunarCrush can help you turn a large amount of social data into meaningful information.
▪️ Events outside the domain of cryptocurrency spark some storylines. Macroeconomic and regulatory forces are infamous for shaping market trends, particularly in the near term. Pay close attention to these, as they might provide useful market insights.
After selecting a prospective narrative, the next step is to investigate a particular project inside that narrative. Again, platforms like CoinGecko and CoinMarketCap are useful. For a more in-depth examination, use analytical tools such as DefiLlama, Dune Analytics, or Footprint Analytics.
Market capitalization and fully diluted volume are important parameters to track. Low market capitalization projects are typically riskier to invest in, but they have a bigger upside potential. Select projects depending on their potential and your risk tolerance.
Top 5 Hot Crypto Narratives of 2024-25
There are several rising trends and concepts that are attempting to define 2024. Below, we will look at the top five crypto narratives to watch in 2024:
▪️ Artificial Intelligence (AI): No other technology has the potential to transform human life like artificial intelligence (AI). 2023 demonstrated the developing connection between humans and AI. The development of ChatGPT and Bard sparked a mini-bull run for AI tokens, and the AI trend continues to gain momentum.
So far, no bear market narrative has attracted as much attention and demonstrated exceptional performance across several coins. This excellent result demonstrates how bullish investors are about the AI narrative.
The total market capitalization of the AI sector is barely around $30 billion. This is negligible, given that AI will be widely deployed in the future years. As more businesses look into combining AI with web3 technologies, the AI narrative will emerge as one of the most successful over time.
| Trending AI Tokens | Market Cap | Growth % (90D) |
| Internet Computer (ICP) | $6.17 Billion | 220.91% |
| Injective (INJ) | $3.27 Billion | 117.64% |
| Akash Network (AKT) | $855.14 Million | 228.33% |
▪️ Real World Assets (RWA): Real-world assets are tokens, either fungible or non-fungible, that represent traditional financial assets on a blockchain. These tokens are linked to real estate or intangible assets such as government bonds or carbon credits. Tokenization allows RWAs to use blockchain technology to make transactions involving precious assets more efficient.
RWAs are one of the most important narratives in the long run for a specific reason. The worldwide RWA valuation exceeds $600 trillion. Currently, the tokenized RWAs market cap available on-chain is only around $40 billion.
Bringing merely 1% of RWAs on-chain would result in a $6 trillion valuation, far above the current overall cryptocurrency market capitalization. BlackRock predicts that the tokenized RWA market will reach $16 trillion by 2030.
| Trending RWA Tokens | Market Cap | Growth % (90D) |
| Avalanche (AVAX) | $15.07 Billion | 93.63% |
| Chainlink (LINK) | $11.71 Billion | 48.65% |
| Maker (MKR) | $1.92 Billion | 55.19% |
▪️ GameFi: GameFi is another hot crypto narrative that is poised to perform well in the coming years. Web3 infrastructure provides one of the most effective mechanisms for distributing value across gaming ecosystems, with enormous potential.
The gaming industry has more than 2 billion users worldwide. Most gamers are familiar with technology, making it easy to introduce them to web3. Onboarding one-third of frequent gamers onto the blockchain equates to more than 600 million players, representing a massive market for GameFi initiatives.
So far, GameFi projects have performed well during the weak market. More and more users are drawn to the profitable commercial models allowed by GameFi.
| Trending GameFi Tokens | Market Cap | Growth % (90D) |
| Immutable (IMX) | $4.34 Billion | 194.90% |
| Beam (BEAM) | $1.44 Billion | 255.89% |
| Ronin (RON) | $880.84 Million | 55.19% |
▪️ Decentralized Physical Infrastructure Networks (DePIN): DePIN employs blockchains and token rewards to build physical infrastructure in a variety of industries, including wireless connectivity, geospatial mapping, mobility, health, energy, and more.
DePIN aims to establish resource-efficient physical infrastructure by motivating providers to dedicate their physical resources to a decentralized network. The DePIN then makes these resources available to users looking for lower service charges (compared to centralized services), and the network earns revenue from user fees.
| Trending DePin Tokens | Market Cap | Growth % (90D) |
| Filecoin (FIL) | $3.04 Billion | 29.93% |
| Helium (HNT) | $1.57 Billion | 385.72% |
| IOTA (IOTA) | $873.98 Million | 56.37% |
▪️ Layer-2 Solutions: The vertical scaling narrative focuses on Layer 2s, which are protocols that are constructed on top of L1s to let them scale and grow further. They reduce L1 computations by moving transactions off-chain, resulting in much higher throughput. L2’s total value locked (TVL) has continually increased, defying the overall DeFi market state and total cryptocurrency market capitalization.
Optimistic rollups are L2 scaling methods that aim to increase transaction throughput and reduce fees while preserving the security guarantees of the underlying blockchain. They use a trust-based architecture to authenticate transactions off-chain, which are then added to the underlying blockchain after being confirmed by a select set of “witnesses.”
Zero-knowledge rollups (ZK rollups) are Layer 2 scaling methods that boost Layer 1 throughput by moving computation and state storage off-chain. This allows them to handle many transactions in batches and send summary data to the blockchain.
Zero-knowledge rollups enable you to demonstrate knowledge of something without disclosing it. This makes them an appealing alternative for applications requiring anonymity, such as digital identity verification and secret transactions.
| Trending L2 Tokens | Market Cap | Growth % (90D) |
| Polygon (MATIC) | $8.90 Billion | 14.62% |
| Optimism (OP) | $3.61 Billion | 125.07% |
| Arbitrum (ARB) | $2.60 Billion | 100.53% |
Conclusion
Staying ahead of crypto narratives is one of the most effective strategies to profit from the cryptocurrency market. Beyond charts and technicalities, narratives influence the overall performance of the crypto market.
Meanwhile, this piece is only for educational purposes, and you should critically evaluate the validity and probable outcome of any narrative before making cryptocurrency investing decisions.
To learn more about crypto narratives, go check out SunCrypto Academy.
Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. All content provided is for informational purposes only, and shall not be relied upon as financial/investment advice. Opinions shared, if any, are only shared for information and education purposes. Although the best efforts have been made to ensure all information is accurate and up to date, occasionally unintended errors or misprints may occur. We recommend you do your own research or consult an expert before making any investment decision. You may write to us at [email protected].
