Narrative beats Tokenomics

Image taken from: https://twitter.com/wallstmemes

EVERYTHING YOU ARE ABOUT TO READ IS NOT FINANCIAL ADVICE.

INTRO

Did you really get into crypto to get rich quick? And if the answer is yes, why are you watching all that technical data? Or wasting your time watching content creators filling you with various data? I'm not just talking about lines on a chart but also of tokenomics, market cap, volume...
Obviously, This article is not directed to those people who buy BTC or another crypto because they believe in their respective value or because they think they will still be relevant in 10 years time.
This article is for all of those people who are buying to get out as soon as possible, including those people who lie to themselves by saying that they're long term investor but as soon as they see the new trending shitcoin they go all in.

IT'S ALL NARRATIVE

Investing based on narrative is something we've already seen for a long time in the stock market, but in that case it's usually something that plays out in a really short period of time and the narrative that started it, is usually something that still has a positive effect in some way to the company. On the other hand in the crypto space the duration is often amplified, retuns are much higher and the catalyst that started it all is often something extremely stupid, like Elon Musk tweeting about Dogecoin. Even though the duration can be longer, it still requires a lot of luck and to be present and active, not just on Twitter/X but also by checking tools like https://defillama.com/ to look for which chain is growing in tvl, https://debank.com/whales to check what the whales are buying, or also https://www.dextools.io/app/en/ether/pairs to watch for the most traded tokens. Obviously, it's much easier to lose everything than to become a milionaire, that's why it's important to diversify(by that I mean having also safer position, not diversifying in many risky positions) and take rational decisions. So, if the tokenomics in the moment a narrative starts become practically irrelevant on the short and sometimes even mid term, what should you pay attention to? The first thing is that you have to make sure that it's not a narretive that's been out there for a long time, it's probably too late. The narrative needs to be strong, which means that it should be talked about a lot, the perfect situation is when it's something that goes beyond crypto. For example in May AI related tokens were booming, after the CHATGPT hype. Once you found the right narrative, you have to make sure of the legitimacy of the project: well known founders and developers, decent amount of social followers(make sure they didn't pay for them), lots of users and make sure the code is safe (if possible). Also, don't forget that sooner or later you will have to sell, if you think that you've made enough get out, it will hurt seeing the token going higher, but it hurts much more to lose everything. At some point the high inflation of a token or the enormus supply will start to have their effects, and at that point things will start to go down, and that happens very quickly.
Now let's take a look at a few past examples and then let's see what narratives could possibly lie ahead:

DEFI KINGDOMS $JEWEL

Defi kingdoms($JEWEL) was my best play of the last bull run, actually BTC had already started its decline, but this token wasn't stopping its uptrend even though the farms of the protocol were giving at the beginning 5000% APR to liquidity providers. I entered at 3$ with a small percentage of my portfolio and then actually went in with nearly my entire portfolio (don't do it at home), obviously I was farming so there was impermanent loss, but little did it matter because the token skyrocketed to 20$ so my pooled tokens went up while I was farming and dumping their token, and in the end I ended up getting out at 14$. Taking out the fact that it was absolutely reckless to put my entire portfolio in it (better to diversify and lose some profits than getting rekt), let's understand what made the token go up for 3 months straight. In that period videogames on blockchain where starting to be a thing, lots of talks on twitter, a narrative was creating around any web3 project that had to do in a way or another with gaming. Needless to say that an intire game on a blockchain makes absolutely no sense, NFTs I can understand, but imagine having to approve a transaction for every action you make...
Any rational person would have stayed away from this, I myself waited a bit to get in. Then again I don't really want to judge the game cause I didn't even try it, I limited my self to only farm & dump. But, I think that the following image will explain what went wrong:
In conclusion the narrative in this case were web3 videogames, and defi kingdomds played it so well that it became for a short period of time the third web3 game by TVL. It's important to notice that the raise in price lasted for 3 months and the farms, even though, weren't giving out 5000% APR anymore, they were still giving a good 300% when the token was at 20$. So, plenty of time to get in.

WONDERLAND $TIME

In this case even though I went in with a really small percentage of my portfolio, was another narrative I was able to catch. But to be honest I waited a lot before going in, I was really skeptical. The purpose of the token is out of the scope of this article, you can search it on your own. But what you need to know is that at the release of the protocol it was giving out an APY of 100000% (nope, I didn't write that wrong). The narrative for this type of tokens exploded between september 2021 and november of the same year, 2 months in this case. I talked about types, in fact there were various forks of this sort of protocols, actually $TIME itself was already a fork of another. Which means you could've played the narrative by also buying the many other forked tokens. In the end one of the founders got discover to be an ex scammer and a bit later people realized that it was pretty much a ponzi scheme, after that in a few month the bear market got way worse with the $LUNA(this one was also a narrative) crash and I decided to take safer position and therefore less risk. But unfortunately for me narratives are born also in bear market, let's look at some of them:

FETCH.AI $FET

In this case on the chart you should consider only the uptrend that starts in January 2023, but I still wanted to put it entirely to show how strong a crypto bull market can be (since people seem to forget about it these days). In this case the narrative was Arificial Intelligence created by the launch of CHATGPT, a narrative that we will definetely see again. I choose $FET but it could've been any other of the many tokens that had to do with AI, it's important to notice that altough the bear market $FET was able to recover half of the bull market gains, before inevitably going down again. Needless to say that even in this case the connection between the two make little to no sense, in fact blockchain hardly has any functionalities connected to AI or viceversa. Most of the tokens connected to this narrative were usually tokens you could use to pay for an AI service, for example $IMGNAI that offers a service simular to MIDJOURNEY.

PEPECOIN $PEPE

This is probably the most important example of all, in this case the narrative is PEPE a meme... Furthermore a defunct one, revived for a while by this token. Obviously this narrative then expanded onto other memes, which led to the creation of many other memecoins that then consequently went to the moon and back. You could rightfully be asking yourself what's special about this token? So far we've seen token tied to gaming, token in the search of monetary stability and tokens for AI services. All of these offered, even though really badly, services that were correlated to their objectives. But, in the case of $PEPE there's nothing, it does nothing and it's usefull for absolutely nothing. Some would say that behind it there's a community (more like was, now), but let's not kid ourselves there is no such thing as a community when it comes to financial assets. Maybe there's a community for Apple products but there's definetely no community around Apple stocks. What actually happened is easily explaind with this very insightful image:
As you've already seen in the meme at the top of this article, some thanks to $PEPE were able to become milionaires with a few dollar investment. In fact, the token went so high that in very little time was able to become a top 100 coin by market cap and to be listed on some of the most important exchanges, including the biggest for held assets, Binance. And even in this case there were 3 weeks to get in, unfortunately I didn't, as much as I like risks, all of this just didn't make any sense to me.

CONCLUSIONS

The question at this point is can you become rich in a very short time in crypto? Highly likely, NO. It needs to be said though, that crypto is definetely the place where you have the highest chances right now, but it requires a big dose of luck mixed with being constantely active on your computer to find this narrative as soon as possible. But, as you will have surely noticed some of this narratives lasted sometimes up to months, for as much as it is nearly impossible to get in so early that you make milions, you can still make quite a bit. What matters is that you go in small and that you diversify your bets, because in the end it's often enough to get one right. Oh, and don't forget to not get too greedy, it's better to get out with a small profit than nothing.
GOOD LUCK!

P.S. FUTURE NARRATIVES

It's really hard to foresee future narratives, especially since they can be random memes... And also because of the continuous technolgical development which ensure that there will be many new narratives that we have no idea of. What we can do, is look for the ones that will likely recur. First of all gaming, we have many of the most important companies in the gaming sector, who had leaked docs that showed crypto related developments. Mainly around NFTs, but even possible crypto wallets integrated directly onto videogames and/or the consoles. And even though it may seem that most gamers are opposing this, the asian market definetely isn't and neither many of the companies ( but in that case they're interested in the profits). Devolpments in this regard will definetely continue and the related tokens will definetely follow up with some good gains.
Artificial intelligence is probably the most important innovation will see in our lifetime and is definetely on everyones lips right now. It has to do with many different sectors, and we can't exclude the possibility that it will be of great use even in the blockchain world. That would even further solidify the narrative that we've seen a few months ago.
After this 2, that we had already talked about earlier in the article. We can identify other two that are in the talks right now, Discord and Telegram bots that allow you to invest without the need of a wallet by telling the bots what to do. And the second one and in my opinion the more interesting out of the two, which is the one about decentralized socials, thanks to friend.tech and its various forks.
And to finish I'm going to list those narratives that will surely keep being relevant in the future. Ethereum Layer 2s, with all their governance tokens that in some cases still have to be released, with all the possible airdrops. Then we have LSTs and the many related governance tokens, Liquid Staking is extremely important both for security of the networks and for user experience. And finally the one that is already greatly talked about even though there still haven't been big developments, that is tokenized Real World Assets.