I was watching a video about this season of bull run earlier and gained some knowledge which asserts, bull markets are always driven by dominant narratives which ends up shaping investment trends. In the video, an account was given, which mentioned ICOs, DeFi, and NFTs as the main drivers of the previous bull runs while this cycle of bull run is targeted at hypes around tokenized real-world assets aka RWAs, Layer 2 scaling solutions, AI powered projects and the evolution of DeFi.
However, it is critical to understand most of these trends may have long-term potentials, majority of others will end up as pure speculations. It also means investors must be smart enough to identify the prospective projects, their entry and exit points while holding strong on diversifying their portfolio and taking profits in partials or full in avoidance of being cut up in the hype.
My question now is, since this bull run has been tagged with major speculations, how can a potential investor navigate his or her way through a long-term, meaningful and financially impactful projects as against those riding on just the hypes?
It is true that every bull market is driven by hype cycles narratives and usually this is in altcoins, and I think this is all just a temporary hype, because basically all retailers or even owners of a crypto project will eventually take their profits there and then eventually will invest in Bitcoin because of the stability of Bitcoin itself rather than altcoins. As one example, last year there were several narratives that led to a bull market, although temporary, one of which was the AI narrative which had attracted a lot of people's attention because many altcoins with AI narratives had increased in value. But it must be remembered that all of this is temporary, and what will survive and peak is Bitcoin.