What are the investment options in the crypto world? An overview of the hottest industry sectors

To understand what the crypto world is all about, you first need to grasp a key point: the world of cryptocurrencies is not just Bitcoin and Ethereum, but is subdivided into various tracks and sectors, just like the stock market has technology stocks, financial stocks, and traditional industries. Each sector has different cycles of rise and fall, and the catalysts driving their growth vary. So, how can you find the most suitable investment opportunities within this vast crypto ecosystem?

Which type of cryptocurrency will be the most profitable in 2024?

According to data from the first half of the year, MEME coins have become the absolute winners, with an astonishing average return of 2405%, far surpassing other sectors. To illustrate their power, RWA (Real World Asset Tokenization) ranks second but yields only one-eighth of MEME coins, while DeFi’s returns are just one five hundred forty-second of MEME coins.

Top market cap MEME coins like PEPE, Dogwifhat, FLOKI, and BRETT have taken turns as market focal points. Recently, the hype around “Black Myth: Wukong” has driven related concept tokens like WuKong on Solana to surge over 99,999% in 24 hours, with some savvy retail investors making a profit of $350,000 in just 5 hours.

However, it’s important to recognize that high returns from MEME coins come with extremely high volatility and risk. Their price surges are often driven by cultural phenomena and community hype rather than fundamentals, so while they can explode in the short term, they can also fall back quickly.

The nine main investment sectors in the crypto world analysis

1. Meme Coins (MEME): High volatility short-term opportunities

Meme culture originated in the academic definition of “idea propagation” in the 1970s. In crypto, meme coins are tokens that go viral and skyrocket due to a particular image, concept, or cultural phenomenon.

DOGE was initially created to satirize the crypto bubble but gained fame after support from well-known figures. Similar tokens include SHIB. These coins are characterized by extreme volatility, short investment cycles, and are not suitable for large allocations.

While short-term returns can be impressive, the high risk means they are only suitable for small capital operations. If interested, start by understanding the market with the most liquid DOGE.

Project ecosystem market cap: approximately $44 billion

2. Real World Asset Tokenization (RWA): Long-term stable growth

Imagine many generations of real estate in Taiwan that cannot be bought or sold due to inheritance division. RWA’s solution is to split these assets into multiple tokenized parts, allowing investors to buy partial ownership.

In 2023, a Rolex watch was successfully tokenized to secure a loan of NT$400,000. This model is not limited to watches; antiques, fine wines, paintings, and even real estate can be tokenized.

The RWA market is huge. Global asset management giants like BlackRock have launched tokenized funds like BUIDL to enter the space. It’s estimated that by 2030, the total value of global RWA could reach $16 trillion, about 10% of the world’s GDP.

Unlike the explosive growth of MEME coins, RWA features steady and irreversible growth trends. If you’re looking for a sector to hold long-term, RWA-related tokens are worth paying attention to.

Project ecosystem market cap: approximately $7 billion

3. AI Cryptocurrencies (AI Crypto): Beneficiaries of technological innovation

AI cryptocurrencies combine artificial intelligence applications with blockchain technology. For example, SingularityNET (AGIX) has built a decentralized AI economy where users share and trade AI services, covering areas from medical analysis and financial fraud detection to artistic creativity.

With optimistic market expectations for future tech applications and continuous capital inflow, many AI tokens with practical value and research backing often show remarkable gains. In the first half of 2024, the AI sector ranked third in returns, just behind MEME and RWA.

Representative projects include NEAR, FET, AGI, etc. If you are optimistic about technological innovation and willing to take risks, this sector is worth exploring.

Project ecosystem market cap: approximately $25.9 billion

4. Decentralized Physical Infrastructure (DePIN): Opportunities in the IoT era

DePIN stands for Decentralized Physical Infrastructure Network, aiming to connect real-world assets and infrastructure via blockchain for safer, more transparent, and efficient operations.

JasmyCoin (JASMY) is Japan’s first legally registered IoT platform, combining blockchain and IoT tech. Users can control their personal data and share it transparently with third parties.

As privacy awareness rises and IoT applications expand, DePIN is gradually attracting more attention.

Project ecosystem market cap: approximately $20.3 billion

5. Gamified Finance (GameFi): Virtual world economic systems

Traditional game gold coins are issued by game companies, with players unable to verify their value, leading to significant devaluation. Blockchain changes this.

GameFi combines DeFi and NFTs, giving game items rarity and ownership, making in-game assets more preservable. Furthermore, many games are trying to break boundaries, allowing NFTs from different games to be exchanged or collateralized, building a cross-game virtual ecosystem. Players earning rewards in their favorite games can then spend or trade across applications, increasing overall ecosystem liquidity.

However, GameFi’s maturity still requires time. In the first half of 2024, many high-market-cap GameFi projects (like GALA) performed poorly, with overall returns negative, indicating this sector is still in exploration.

Project ecosystem market cap: approximately $14 billion

6. Telegram Ecosystem: Communication and payments combined

As one of the largest instant messaging platforms globally, Telegram has regained attention in the Web3 era for its privacy features. The platform has a built-in wallet (@wallet) supporting direct transfers, similar to LINE Wallet but with more functions.

TON is Telegram’s native blockchain token, with many users worldwide but lower recognition in Taiwan. Besides transfers, TON also supports smart contracts, enabling traceability of transactions and enhancing security.

Project ecosystem market cap: approximately $700 million

7. Solana Ecosystem: The Ethereum killer’s showcase

Born just four years ago, Solana has become one of the few mainstream blockchains maintaining user growth during the crypto winter. It innovatively adopted Proof of History (PoH) instead of traditional Proof of Stake (PoS), greatly reducing transaction times and costs, solving Ethereum’s congestion issues caused by high application demand.

More importantly, Solana has been adopted by Visa, the world’s largest credit card company, which launched USDC settlement payments on its platform. This suggests Solana could shift from an investment tool to a daily payment method—companies paying salaries in Solana, individuals using it for purchases, without frequent exchanges. Just as the US dollar dominates globally because it can buy the most things.

Project ecosystem market cap: approximately $6.8 billion

8. Decentralized Finance (DeFi): Infrastructure of crypto finance

Crypto was originally designed to bypass banks, which are heavily regulated intermediaries. Traditional banks face issues like currency exchange limits, high fees, slow transactions, and government freezes. Cross-border transactions involve multiple transfers, each with fees.

DeFi connects buyers and sellers directly via blockchain, eliminating intermediaries, reducing costs, and speeding up transactions. From this perspective, cryptocurrencies should be seen as essential daily tools rather than just investments—more users mean higher value.

This also explains why you shouldn’t focus only on Bitcoin. Ethereum’s smart contracts, Solana’s high-speed transactions, each have advantages, and future applications will be extremely diverse.

But DeFi faces its biggest challenge—competition with traditional finance. Plus, with the stock market performing strongly in the first half of 2024, capital inflow into DeFi has been limited, resulting in relatively weak overall returns.

Project ecosystem market cap: approximately $74 billion

9. Other emerging sectors: cyclical shifts in the industry

Besides the eight main sectors, the crypto market also exhibits clear “sector rotation” phenomena.

Historically, in late 2020, Bitcoin led the charge with massive institutional inflows; early 2021, DeFi became the focus, with capital flowing into projects like Uniswap and Aave; mid to late 2021, the NFT market exploded, with Bored Ape Yacht Club and Axie Infinity gaining popularity; late 2022 to early 2023, Layer 2 solutions (Arbitrum, Optimism) performed well, while Layer 1 chains lagged. Recently, with spot ETF launches and rate cut expectations, Bitcoin’s rebound has driven Layer 1 chains to make a strong comeback.

These rotations are driven by common factors: technological advances, market trends, policy changes. Understanding these cyclical patterns allows for more scientific asset allocation.

Why must investors pay attention to sector differentiation in the crypto world?

As the crypto market matures, not all coins rise and fall together. Different sectors are affected by fundamentals, policies, technology, and the global economy in unique ways. In a bull market, innovative tech projects lead the rally; as the economy recovers, stable yield assets perform well. The crypto market follows similar logic.

Understanding sector rotation offers three major benefits:

First, risk diversification. Instead of putting all chips into a single coin or sector, you can switch flexibly according to market cycles, catching hot sectors while avoiding concentrated risks.

Second, predicting returns. By analyzing the historical performance of sectors at different stages, you can forecast which area might be the next hot spot and position early.

Third, avoiding being trapped. Deeply studying market enthusiasm and the transition patterns between hot and cold sectors helps prevent buying at the peak and selling at the bottom.

Practical tools for checking sector data in the crypto world

To accurately grasp sector trends, utilize the following platforms:

CoinMarketCap — One-stop crypto market data including prices, market caps, trading volumes, and sector classifications (like DeFi, NFT, AI coins, etc.)

Coingecko — Similar features with more detailed sector statistics and classifications.

Messari — Provides in-depth blockchain research reports, market overviews, and financial data, allowing sector-based project performance analysis.

Regularly using these tools to stay updated on sector cycles and trends will help you become a long-term market winner.