The dynamics of the cryptocurrency market are constantly changing, and investors are constantly researching to identify the brightest projects of the future. In this context, well-established and reputable hedge funds such as Pantera Capital offer valuable guidance to investors with their analysis of crypto assets.
In the latest Blockchain Letter, analysts at Pantera Capital revealed two altcoin projects that could be the best performers in the market.
Analysts led by Cosmo Jiang and Erik Lowe reported that they focused on specific features when identifying crypto projects of fundamental interest. According to them, qualities such as product market fit, having a strong management team, and having a sustainable economy are critical for future success.
The first altcoin project that Pantera analysts drew attention to was Stacks (STX), which aims to scale Bitcoin and improve its smart contract capabilities. The Stacks project aims to contribute to the Bitcoin ecosystem and ensure the integration of smart contracts into this giant cryptocurrency. This could make Bitcoin more functional and suitable for a variety of use cases, thus gaining wider acceptance in the cryptocurrency market.
According to analysts, the reason why the Stacks project has high potential is that it does not yet have a competitor in its field:
“Stacks’ mission to innovate Bitcoin is therefore both exciting and well-timed. Interestingly, Stacks is currently the only live generalized smart contract layer-2 network in Bitcoin; This contrasts with the Ethereum ecosystem, where dozens of competing layer-2s compete for market share.
NEWS CONTINUES BELOWWhile there will be multiple viable Bitcoin layer-2s over time, we believe Stacks has a fairly long competitive advantage over any new competition that emerges, given its first-mover market position.”
Secondly, Pantera analysts noted that dYdX (DYDX) is a noteworthy altcoin project due to its strong revenue and economics. As a protocol operating in the decentralized finance (DeFi) space, dYdX offers a platform where users can trade, borrow and lend crypto assets. According to analysts, there are two important reasons why dYdX has growth potential in the future:
“One of the key reasons we believe dYdX is interesting is that unit economics have been positively impacted over the past year. The business model is simple. They collect commission fees of about 2.5 basis points and pay customer acquisition costs. dYdX generates roughly a base volume profit for a healthy margin of 40%.
The second reason is a change in capital allocation that was introduced late last year. dYdX began returning capital to token holders in the form of staking rewards with the v4 upgrade in December. dYdX protocol profits are now distributed directly to token holders, making the token value tangible.”
You can follow the current price movement here.
