Two Crypto Projects Will Likely Outperform the Market This Coming Cycle: Pantera Capital Analysts

Analysts at crypto hedge fund Pantera Capital are naming two altcoin initiatives they’re optimistic about for the bull run.

In its newest Blockchain Letter, Pantera analysts Cosmo Jiang and Erik Lowe say they’re searching for crypto initiatives which are gaining basic traction.

“Tokens [with] underlying protocols that have product market fit, are guided by strong management teams, and have a path to sustainable unit economics will perform best in the coming cycle.”

The analysts first point out Stacks (STX), a mission that goals to assist scale Bitcoin (BTC) and convey sensible contract functionality to the main cryptocurrency by market cap.

Say the analysts,

“Stacks’ mission to deliver innovation to Bitcoin is thus each thrilling and well timed. Curiously, on this second in time, Stacks can also be the solely live-generalized sensible contract layer-2 on Bitcoin at the moment, which contrasts with the Ethereum ecosystem the place there are dozens of competing layer-2s jockeying for market share.

Whereas there could also be a number of viable Bitcoin layer-2s over time, given its first mover market positioning, we imagine Stacks has a aggressive edge for fairly a while in opposition to any new competitors that emerges – and we count on they’re coming.”

Subsequent, Pantera says that Ethereum (ETH)-based decentralized alternate dYdX (DYDX) is one to have a look at given its robust income and economics.

“One key cause we imagine dYdX is attention-grabbing is that its unit economics have inflected constructive over the final 12 months. The enterprise mannequin is easy. They gather fee charges, roughly 2.5 foundation factors of quantity, and so they pay for buyer acquisition prices. dYdX makes a revenue of roughly one foundation level of quantity for a wholesome 40% margin.

The second cause is that there was an inflection in capital allocation put in place late final 12 months. dYdX started returning capital in the type of staking rewards (analogous to fairness dividends) to token holders together with its v4 improve in December. dYdX protocol revenue is now getting distributed on to token holders, making the token worth accrual concrete.”

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