Messari's "Crypto Theses for 2024" (with summarized recap)

If you don't know who they are, Messari is a professional grade research platform for crypto, I often use it and read their free reports/dashboards. They just released their free 2024 report, link is here: https://messari.io/crypto-theses-for-2024

PDF is free to download but the report is almost 200 pages long.

Here is a AI generated summary I made, separated by chapter:

Chapter 1 (Top 10 Investment Trends for 2024)

Bitcoin and crypto markets look poised for further growth in 2024, with bitcoin potentially reaching parity with gold (over $600k per bitcoin).

Ethereum also looks solid after the Merge, though may underperform other crypto assets.

Beyond bitcoin and ethereum, the broader crypto market has room for 100x growth to reach the size of private capital markets. Index products remain limited, so picking winners is key.

Crypto venture investing looks attractive for 2023 vintages given low entry valuations. Top funds to watch include Multicoin, 1confirmation, Framework, Placeholder, a16z, and Syncracy.

Coinbase, Circle, and Galaxy Digital emerge as winners from the crypto downturn and are M&A and IPO candidates. Crypto policy battles loom as the industry fights perceptions it enables crime/harms innovation. Outcomes will depend on whether enough supporters mobilize.

Developer activity remains robust despite market weakness. Combination with AI represents major opportunity. Beyond DeFi, major potential in decentralized physical infrastructure, social media, and science applications.

Chapter 1 Extra (Messari Analyst Picks)

AI didn't do a great job of summarizing these and it's probably easier just to look at the report pages 25-28, but here is the summary

Ryan Selkis likes the Grayscale Bitcoin Trust (GBTC) as a top pick, but holds bitcoin (BTC), ethereum (ETH), and Solana (SOL). He also highlights the Messari research reports.

Other top token picks include Render Token (RNDR), Akash Token (AKT), Threshold Token (TAO), Terra Token (LUNA), Honey Token (HONEY), Lido Token (LPT), and the Coinbase stock token (COIN).

Favorite sectors/themes include decentralized physical infrastructure networks (DePIN), decentralized social networks (DeSoc), decentralized science/research (DeSci), zero-knowledge machine learning, mobile applications, alt-VM Ethereum rollups, bitcoin programmability, abstraction protocols, reputational/social token models like Friend, prediction markets/gambling applications, and re-staking protocols.

Assets/sectors viewed less favorably include illiquid VC portfolio marks, non-blue chip stablecoins like USDC, various memecoins, and cross-chain ATOM.

Analysts highlight the recent strong performance of Solana and skepticism around the long-term strength of assets like Ethereum.

Chapter 2 (Top 10 People to Watch in 2024)

1. Larry Fink (BlackRock) and Cathie Wood (ARK Invest) - positioning to launch bitcoin/crypto ETFs

2. Jeremy Allaire and Dante Disparte (Circle) - leading regulated stablecoin provider poised for IPO

3. Kristin Smith (Blockchain Association) and Michael Carcaise (Fair Shake PAC) - leading crypto policy and political groups

4. Senator Elizabeth Warren and her allies - major political opponent wielding significant influence

5. Elon Musk, Tucker Carlson, Vivek Ramaswamy - contrarian political figures largely supportive of crypto

6. Michael Sonnenshein and Craig Salm (Grayscale) - successful business but uncertain future given parent DCG's legal turmoil

7. Nic Carter and Matt Walsh (Castle Island Ventures) - influential crypto commentators and investors

8. Lucas Vogelsang (Centrifuge), Denelle Dixon (Stellar), and Christine Moy (Apollo) - bridging crypto and institutional finance

9. Dan Romero (Farcaster) and 0x Racer (friend.tech) - building next-gen social platforms

10. The DeFi gang - range of early DeFi players navigating growth and regulations

Chapter 3 (Top 10 Products in 2024)

This section highlights 10 "killer apps" in crypto that shipped promising products in 2023:

1. Tether on Tron - Emerging as a leading global crypto payments network, especially in developing countries

2. Base from Coinbase - Intuitive rollup experience bringing DeFi to Coinbase users

3. Celestia - Modular blockchain data availability layer to reduce congestion for rollups

4. Firedancer - Solana validator client from Jump Crypto that boosts speed and throughput 10x

5. Farcaster - Slick social app with hybrid architectureclosest to Web2 in UX

6. GBTC - Victory in legal battle closes giant discount, paves way for first bitcoin ETF

7. Lido - Leading decentralized ETH staking protocol navigating regulations around market share

8. CCIP - Chainlink's cross-chain messaging system attracting developers

9. Blur - NFT financialization suite shaking up OpenSea's dominance

10. Project Guardian - JPMorgan and Apollo proof-of-concept showing trader tools with DeFi integration

Chapter 4 (Top 10 Crypto Monies in 2024)

Bitcoin is poised for further growth in 2024 due to several tailwinds, including potential ETF approval, concerns about currency debasement, favorable accounting changes, its role in political "protest votes," and the 2024 bitcoin halving event. However, bitcoin's long-term security model relies on miner incentives, which may require changes to bitcoin's supply model.

Stablecoins saw explosive growth in 2022 and are emerging as a major bitcoin and crypto use case. Tether, USD Coin, and other stablecoins play different roles in the onshore and offshore crypto markets. Crypto-collateralized stablecoins like Dai and algorithmic stablecoins are other models to watch.

Central bank digital currencies (CBDCs) are mostly hype and unlikely to be widely adopted for some time, if ever. Their privacy implications are concerning. Ripple may gain traction assisting smaller central banks launch CBDCs.

Chapter 5 (Top 10 Crypto Policy Trends in 2024)

Politics, personnel, and culture drive policy. Crypto does not have strong tailwinds currently in U.S. politics. Issues include bear market sentiment, national security concerns, a lack of single-issue voter momentum, and knowledge gaps amongst policymakers. However, there is bipartisan distrust of regulators like the SEC and favorable recent court rulings.

Passing legislation is difficult and unlikely in 2024. Prospects for a bipartisan market structure or stablecoin bill are low. Dangerous surveillance bills like DAAML have better chances via attachment to must-pass legislation. Tax rules and AML enforcement are other pressure points regulators use against crypto.

Re-taking the Senate in 2024 is crucial for improving the crypto regulatory climate going forward. The SEC and CFTC have overreached their authority. While litigation helps, courts can also set bad precedents for crypto. Industry engagement and standards-setting matter alongside legal fights.

In Europe, comprehensive crypto regulations like MiCA and TFR provide some clarity but may prove overly burdensome for crypto innovators. Global compliance complexity across regimes grows.

Chapter 6 (Top 10 Trends in CeFi in 2024)

Coinbase: Operating at an otherworldly level, secured licenses, deepened partnerships, and launched new products.

Binance: Settled with the U.S. government, guilty plea for money laundering, and surveillance sharing agreements may pave the way for institutional entry to crypto.

ETF Approval: Prospects of approval are exciting, but SEC's refusal to convert Grayscale's GBTC product created a financial crisis.

DCG: Struggled due to bad timing and bad counterparty risk management, faced civil fraud allegations.

Compliance Tools: IRS creating challenges for crypto investors, tax reporting requirements are now definitely here.

Chapter 7 (Top 10 Trends in Layer-1 Networks in 2024)

Ethereum's dominance is being challenged by lower cost, higher performance blockchains

Security demand of base chain's native tokens is a comprehensive valuation framework

Centralization concerns in Ethereum have led to censorship challenges at different layers of the transaction processing stack

Major development breakthroughs in 2024 are expected to address these challenges

Ethereum's rollup-centric roadmap and modular approach provide flexibility and optimization for execution environments

Solana's tech enables applications that are "Only Possible on Solana" in sectors like DePIN, Payments, and Consumer apps

FHE and ZK Trends

Smart contract developers need access to more compute, which can be addressed by ZK coprocessors

ZK coprocessors allow complex computations to be run offchain while maintaining verifiability

Chapter 8 (Top 10 Trends in DeFi in 2024)

Uniswap retains market share across user segments on Ethereum and its rollups

Other chains have dominant DEX platforms such as TraderJoe on Avalanche, Osmosis on Cosmos, Orca on Solana, and PancakeSwap on BNB Chain

DeFi regulation in the U.S. is in a precarious spot, potentially impacting Uniswap

dYdX is dominant in futures and perpetuals with a big year upcoming in 2024

DeFi lending is capturing real-world asset tokenization and yielding sustainable assets

Trustless bridges and interoperability protocols are crucial for the multi-chain future

Rise of aggregators and regulated market makers in the crypto exchange space

Various blockchain platforms facing issues with transaction spikes and outages

Vibrant L2 ecosystem emerging for Bitcoin with Stacks leading the way

Chapter 9 (Top 10 Trends in Consumer Crypto in 2024)

Consumer Crypto

Ownership economy is here to stay:

• DeSoc platforms and NFT trading

• Bitcoin's fee model and crypto gaming

DeSoc:

• Need for decentralized social media platforms

• Platforms making good progress

• Importance of ad sharing for creators

NFT Market Models:

• Challenges in the NFT market

• Impact of Blur on NFT interest

• Introduction of Ordinal Theory and Bitcoin NFTs

Token Bound Accounts

• Impact on NFT lending and Lens integration

• Complementary to non-transferable tokens

• Potential for further development

Co-Creation & UGX

• Financial challenges in building digital worlds

• Potential for crypto communities to compete

• Importance of curation markets and prediction markets

Cloud Country:

• Cultural and political divisions

• Formation of a new country as a software play

• Likelihood of a cloud country becoming a reality

Chapter 10 (Top 10 Trends in Peer-to-Peer Infrastructure in 2024)

The future of wallets is moving towards Multi-Party Computation (MPC) upgrades

Account Abstraction (AA) is a core Ethereum initiative aimed at replacing EOAs with smart contract wallets

The race is on to embed wallet tech as widely as possible

Decentralized storage networks and databases are gaining momentum

Decentralized wireless networks and AI machines are also on the rise

DAOs have potential but also come with limitations and challenges

End