Diamond Hand Final Chapter: The Four Altcoin Investment Opportunities I Am Optimistic About

Written by: Lao Bai

It has been two years since I wrote the Diamond Hands series, and today I’m coming out with a third edition, which is likely to be the last edition of the Diamond Hands series. Because in this cycle of the crypto world, apart from rewarding BTC diamond hands, other investments have basically been ruthlessly extinguished. The previous Diamond Hands series also leaned towards finding Alpha, while this edition is more focused on Beta, after all, some of the Alpha investments were severely damaged after being cut, and it’s truly a painful past to look back on.

The biggest Beta is of course still the top three: BTC + ETH, SOL, BNB. As for the Beta of altcoins, I personally currently favor these four, and I plan to continue digging into them.

1. AAVE - AAVE can be considered one of the few assets you can hold long-term and sleep well at night, aside from the top three. The TVL has already broken the previous high, reaching over 30 billion, and what’s more commendable is that there hasn’t been a major security incident in all these years. You see traditional financial institutions like JP Morgan testing the waters in blockchain, and they also prioritize AAVE as a testing point.

This wave of RWA+ stablecoins, which combines blockchain with traditional finance, significantly enhances efficiency and is destined to be the primary direction for the future development of blockchain. The assets that can ride this wave, aside from public chains, have less certainty than Uniswap/Curve, while AAVE is definitely a leading asset that will certainly be on board. The upcoming launch of V4 in the next few months is also highly anticipated, making it worth a deep dive.

2. Pendle - TVL has reached 6 billion, close to the previous high, stable as a rock, and is about to迎来 the third wave.

Pendle’s first wave relies on Sushiswap and some DeFi protocols, separating the yields from liquidity mining, but there isn’t much buzz or excitement because those yields are indeed quite illusory.

The second wave is the previous LST/LRT based on Lido and Eigenlayer, soaring to new heights. After all, the profits have materialized significantly.

The future third wave will be RWA and stablecoins, where income tiering and risk splitting are extremely important tracks in traditional finance, with a huge market (over 10 trillion). As more and more RWA and stablecoin assets come on-chain, this track will definitely rise with the tide, and unlike AAVE, which faces competition from Compound, Morpho, etc., Pendle basically stands alone in this track, with no competitors in sight even with a telescope.

The only downside is that the price of the coin is too stable, with not much fluctuation. Let’s wait and see for a few months.

3. Hyperliquid - The strongest player in this cycle of token issuance projects, without exception.

The overwhelming user experience of Perp on other chains + overwhelming trading depth has led to overwhelming trading volume and leading market capitalization.

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

In addition to the current massive buybacks every day, there is also the construction of the HyperEVM ecosystem, and various follow-up actions such as HIP-3’s RWA Perp are building momentum.

But Hyper is the only diamond hand I haven’t built a position in yet, the reason being that I sold off the airdrops from 4-10. Watching it now with a market cap of nearly 50 billion makes me feel a bit resentful + it’s hard to pull the trigger. In the future, I hope to find a good entry point. I definitely need to diamond hands, and if not, I’ll just wait for the next bear market to do so…

4. Bittensor - I used to be biased against Bittensor, but only recently did I realize and start to become a fan. I plan to delve into it for 6-12 months.

The reason for the blackness is naturally his PMF. I’ve been questioning it since 2023, and I still doubt it. I always feel that Bittensor is very similar to Filecoin.

Filecoin fills in with junk data without real commercial demand, Bittensor creates demand itself without real commercial needs, and miners roll out reasoning results that are of no use. Last year, there were many miners colluding with Validators to take emissions from Rumor and various dramas…

So no matter how you look at it, this thing feels like Filecoin.

So why did you figure it out recently?

First of all, Crypto has disproved a number of tracks and confirmed two tracks in this development cycle.

The confirmed tracks are one in finance (Defi, RWA, stablecoins are included), and the other is Gamble (meme, PolyMarket, and various forms of on-chain casinos are included).

Among the few still self-evident, Crypto+AI is definitely the biggest player, and even if it cannot be proven in the short term within this track, it is also difficult to completely disprove.

Among all the current AI+Crypto projects, the one that is the hardest to disprove is Bittensor.

The reasons are as follows:

It ranks first in market value and is also first in this track of Mindshare. When you think of Crypto+AI, the first thing that comes to mind is definitely it.

At this stage, very few people can clearly explain what Bittensor actually does. Don’t believe it? Try imagining yourself explaining Bittensor to a friend in 10 minutes. Can you explain it clearly?

There are currently nearly 100 subnets deployed, and it shouldn’t be a big problem to have two to three hundred next year. Moreover, some subnets really have PMF+ and are generating income - (although most of the clients are also Web3 projects, and that income is negligible compared to Bittensor’s market value)……

Bittensor is going to halve in January and February next year. This thing has a hard cap of 21 million like BTC, and it halves approximately every 4 years. The halving next year will definitely be a major event.

In terms of emission mechanisms and Mindshare, this thing can be seen as the BTC of the AIxCrypto track. As for subnet design, consensus, and proof mechanisms, it resembles ETH - if a star subnet emerges with something that truly has PMF, it would be similar to how Uniswap and AAVE emerged on ETH. After all, its subnet coverage ranges from decentralized training to data, computing power, inference, text, images, videos, drug research, blah blah blah, it has everything you can think of; basically, every niche area of AI + Crypto has one or several subnets working on things. So compared to other projects, Bittensor feels more like a foundational platform like ETH, especially after subnets can issue their own tokens this year.

But the biggest problem with Bittensor is that its market value is very high, with daily emissions exceeding one million U. At this stage, digesting it is still quite difficult. If you think it’s expensive, you might want to pay special attention to it in the first half of next year; currently, it’s optional.

OK, the Diamond Hand series has officially come to an end. Let’s see if this final version of the Diamond Hand can outperform BTC in the coming years, so I will record today’s prices - BTC-118275, AAVE - 312.7, Pendle - 4.43, Hyper - 44, TAO - 433.