The Layer 1 Effect Will Continue
Solana kicked off the Layer 1 rally. Shortly thereafter we saw Avalanche and Cardano begin to follow suit. Fantom has seen a rise. However, there has not been much attention. This has ultimately led me to begin preparing for the “layer 1 effect” on Fantom. Even though we are still in the formative stages of this bull market, there will be multiple altcoin seasons. As I have previously stated, the most significant moves occur in the final months of the cycle.
Whatever appears significant now will eventually be dwarfed and in a relatively short period. In the previous cycle, Fantom (FTM) was the last layer 1 to rally. Sadly, it had only just kicked off its rally when the market began to correct. I have often wondered how far FTM would have rallied, had it been given an additional month or two. On the other hand, hopefully, it gets through the gate a lot quicker this time.
Remember, BONK was selected under similar circumstances… as a direct result of the layer 1 effect, and in an attempt to leverage it. Once again, I am hoping to harness this dynamic. Fortunately, with BONK, I was very early and saw a 5000% move within weeks. Essentially, I am earlier, regarding Fantom. This can be beneficial, but it can also be an issue when it comes to riskier assets, such as memecoins and micro-caps.
When you take a closer look at the Fantom ecosystem, you begin to realize just how small many of these projects are. Investing within this particular ecosystem is incredibly risky. The risk/reward ratio is perhaps not as attractive as many other chains and this is perhaps why Fantom tends to lag. However, that being said, fresh moves are generally more significant than moves on already existing previous strong moves.
DEXs & Memecoins?
When it comes to a chain like Fantom, I tend to consider DEXs and memecoins. Even though memecoins are incredibly risky, the market caps are tiny. In other words, a rather modest investment puts you in the game, and you can always top up in the event of a heavy correction. I am still researching this particular niche, so I hope to uncover a few more “substantial” projects within the ecosystem.
It does however appear that much of what has been built on Fantom tends to be DeFi-based, as well as memecoins and other speculative plays. I am drawn to more significant projects that are perhaps still in their grassroots phase. Micro-caps that usually fall within the layer 1 space, or other relevant sectors such as tokenization, AI, or even, gaming.
This article is a prelude to my Fantom altcoin picks and a heads-up to what I believe could happen next. Fantom is up 30% over the past two weeks, and 4% today. It’s moving, but there isn’t much attention on the chain at all. Polkadot has had a similar effect. As I mentioned in an article published in November, I expected Polkadot to be somewhat of a silent performer in this bull market.
Coincidentally, we have seen just that. In a matter of weeks, Polkadot jumped from 16th position to 12th position according to market cap without anyone blinking an eye. It’s important to note that moving up 4 positions within the Top 20 is rather significant. Not as important as within the Top 10, but impressive, nonetheless. Essentially, it means that it rallied harder than the coins (Tron, Polygon, & ChainLink) ahead of it at the time.
Final Thoughts
Gains can still occur unnoticed. However, the hype adds fuel to the fire and ultimately enhances the move. I am watching for signs of a rumble within the Fantom world, and am looking at a few possible ways to leverage the inevitable move, which I believe is on the way. I am not sure when exactly that will be, but it makes sense to expect a strong move from Fantom in the not-too-distant future. Anyway, that’s it for this one… see you next time!
Disclaimer
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This article was first published on Sapphire Crypto.