How to catch a few 20x to 100x coins during the next bull run ?

Lessons from the 2021 best-performers

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I spent quite some time studying the last bull run, the different narratives that were hot, the profit-maximizing rotations, the best-performing tokens of 2021 and the rationale behind their huge gains.

This new cycle won’t be exactly the same as the previous one, but there are many lessons that we should have in our mind, because history rhymes, especially in financial markets, where most of the exuberance comes from the way human brains works… and this does never change.

Let’s go straight to it :

A few general lessons to prepare for the bull run :

Shiny new coins outperform and old coins underperform :

A notable trend of the 2021 bull run was the underperformance of old coins, with almost no top performer of the 2018 cycle doing well.

Ripple (XRP), Stellar Lumens (XLM), Bitcoin Cash (BCH), NEO, XEM, IOTA, EOS, Dash, Monero (XMR), Zcash (ZEC) and Tron (TRX) never reached their previous all-time high prices again IN USD, and they have basically been down only versus BTC since 2018.

Except of course BTC and ETH, the only good performances from major old coins were from BNB, Cardano (ADA), Ethereum Classic (ETC) and of course DOGE.

Here is a screenshot of the CoinMarketCap ranking in December 2017. I strongly recommend you to check these historical snapshots for a few dates, to help you realize how “rotational” the crypto market is.

Most coins underperform BTC before the bull run really starts

When we're in the middle of a bear market and you think we're close to the bottom, that is obviously the best time to buy BTC and ETH to hold until the next bull run.

But with the same logic, you may also be tempted to buy altcoins, since they are high-beta against BTC and should therefore outperform it. Even if this is true for some altcoins, it didn't exactly work out that way in the last bull run :

The vast majority of altcoins underperformed bitcoin during its late 2020 run, right up until early 2021, when they suddenly started to take off.

The good news is that you were not really missing out on outperformance by staying allocated to BTC and ETH until the bull run began.

If history had to repeat itself, this is what we should expect : BTC (with ETH?) should have a period where it takes off on its own, and altcoins lag behind (BTC dominance goes up), then suddenly the rotation kicks in, and that's when altcoins start going crazy.

But I don’t think that this is exactly what happened, or will happen : what we have seen during the last few months is that $BTC has been going up in the same time as BTC dominance, just like in 2020, but this time we have seen many coins outperform $BTC from June 2023 until now.

BTC dominance from 2020 until now

My interpretation is that :

• For a long-term investor, the bottom to buy on November 2022 was for $BTC (and $ETH… even if in hindsight, not touching ETH in 2023 was the best idea), while the time to buy (the right*) altcoins was around June 2023.

• There are a lot of differences between the performances of the altcoins : $ETH underperformed $BTC in 2023, some (old) altcoins have been underperforming $BTC in the last few months too, while selected altcoins have outperformed the market by a large margin.

Nevertheless, it is true that we have not seen the altcoins go completely crazy against $BTC, and I expect this to happen once $BTC crosses its past ATH ($69k), and we get to full-blown euphoria.

Most of the gains are concentrated in a few months

Most of the gains on these cryptos are concentrated over fairly short periods of time. Virtually all performance takes place over a few months, particularly on altcoins.

During the last bull run, for example, it was from January to May, then from August to November 2021. Periods during which the market is "up only" and in "easy mode", and during which your new adversaries are the retailers who have abandoned crypto for 3 years.

These are the key weeks and moments when you need to be 100% committed to the market. There's a famous GCR tweet that sums up what you need to do during these periods:

Here are a few to make you realize how quick and concentrated these pumps are :

• $CHZ : 30x in one month in February-March 2021

• $BNB : 8x in 20 days in February 2021

• $DOT : 8x in 2 months in January-February 2021

• $SUSHI : 6x in one month in January 2021

• $AAVE : 6x in one month in January 2021

• $HOT : 35x in 2 months on February-March 2021

• $JOE : 60x in 2 weeks in August 2021

Don’t let bear market PTSD rob you of the insane gains offered by a glorious bull run and alt season

If it is your first cycle, you are likely to get in too late, run your investment to insane valuations without taking profits, and then roundtripping many of your gains. But if you read this article, chances are that you were here during the last cycle, and you went through the bear market, which was particularly brutal in 2022. In a bear market, you have to fade every pump, and get ready to short each time some altcoin goes up because of whichever catalyst. You are rewarded for this behaviour. But this completely changes during a bull market : some pumps are going to go so much higher than you could have thought. And you must be ready to benefit from this.

So here are a few examples of the insane multiples that some coins pulled up in 2021, in fairly short periods, and also the very large valuations that were reached :

• $DOGE went up close to 10x in a day in January 2021 while it was already a billion-dollar coin

• $THETA market cap (MC) went from $1bn to $12bn in 3 months

• $RUNE MC went from $200M to almost $5bn in 5 months

• $FIL reached at some point an FDV close to $400bn

• $ICP launched at a $250bn FDV

• $AXS MC went from $200M to $10bn in 5 months. Its FDV was $43bn at the top.

• $GALA MC reached $5.4bn at its top, while it was a $5M market cap project at the beginning of the year 2021.

• $TEL MC went from $10M to $3bn (300x) in 5 months

The evolution of the crypto total market cap during the last bull run

The main themes of the 2021 cycle, with the best gains :

DeFi 1.0 :

DeFi was the new thing in crypto in 2020, it delivered new use cases and was a zero-to-one kind of novelty. The summer of 2020 was focused on DeFi, which is why it was called “DeFi summer”, and we could characterize it as the beginning or the bull-run (or the pre-beginning…).

Add a ponzinomics aspect to tho whole thing and you have a recipe for great gains. The two biggest winners of DeFi with strong fundamentals were $AAVE and $SNX. From bottom to top, the gains of these were between 500x and 1000x. We can also cite $SUSHI that did a 30x between November 2020 and March 2021.

Alt L1s

The L1 trade is the most permanent trade in crypto, and it was one of the most rewarding trade in the last cycle : the main winners of this trade have been $SOL, $LUNA, $AVAX (the Solunavax trifecta), but also $FTM, $ADA, $BNB, $EGLD.

Alt L1s are traded by the market with a very high premium, which means that on average, their value (market cap or FDV) is higher than other categories, like apps for example. Once you know this, you know that you have to be exposed to this narrative. And it quickly became very clear that it was one of the main themes of the 2021 bull run, as some of them have been top-performers almost from the beginning to basically the Terra-Luna crash in May 2022.

The lesson here is : once you understand what is the main theme of the cycle (L1s), you just submit. And the second one is : the alt L1 trade never dies. It was a dominant theme in 2021, but it was already the case in 2017, and is once again the case in 2023-2024.

The alt L1 “ecosystem” playbook

In crypto, whenever a coin pumps, traders are looking for the tokens that are related to the pumping coin or that should logically follow. This is why, when an alt L1 coin pumps, people start to look for all the tokens that are in this alt L1 “ecosystem”, because the market caps are smaller, so they are expected to pump harder, and act as “beta” to the L1 coin.

Usually, the main ecosystem coin is simply the dominant DEX of the network, and this is where some insane gains have been during the last cycle :

• For example, the BSC had its season during the first 2 months of 2021, so $BNB started its huge run up from $40 to $700 at the top, and $CAKE, which was the main DEX on BSC, basically went up 50x in a month. For some traders, $CAKE was their best trade of the whole 2021 bull run.

• A second example is in the Avalanche ecosystem : like most coins, $AVAX experienced a strong start in 2021, but dumped severely in May (-70%), and then was one of the strongest coins to recover in August 2021. Naturally, people started to look for beta coins, and the Avalanche DEX coin $JOE went up 50x in two weeks… another kingmaker trade. Pangolin ($PNG) was the other main DEX on Avalanche, but its price has “only” been multiplied by 4 in the same time.

Besides DEX, you can also think about memecoins, money markets, perp DEX, CDP (over-collateralized stablecoins), launchpads, when you are looking for higher beta coins in an ecosystem. I think that now in 2024, people have been more attracted to the “main memecoin on X chain” than the “main dex on X chain”.

Metaverse

On October 28, 2021, Facebook announced its rebranding to Meta, and its new company’s focus on “building the metaverse”. This immediately sparked an extreme wave of speculation in the crypto market : the metaverse mania was beginning.

3 coins were the leaders of this narrative : $SAND, $MANA, and $GALA. All of them went close to 10X in a month, and the only thing you had to do was to buy them once Meta made its announcement, even if they “already pumped” +20% on the news.

The market was close to its peak euphoria, and a major tradfi / GAFAM / real world news hit with this Meta announcement, so it was a recipe for a very strong narrative, that lasted around a month.

What’s more, metaverse is very related to gaming, and one “major” crypto game, $AXS, went completely crazy during the summer of 2021, which was another strong catalyst for a gaming + metaverse pump, because then people started to look for “the next Axie Infinity”.

The lesson here is : be aware of the tech and real-world trends out of crypto, because in a risk-on environment, and if a tech trend has some relation to crypto, it will definitely become a thing in crypto too, as we saw with this metaverse and gaming mania.

The narrative in 2024 that looks the most like this metaverse narrative in 2021 is AI : the ChatGPT launch did not happen at a time when the market was in a bull run and overall the AI narrative is less concentrated in terms of time, so there has not been one month of full-blown AI euphoria (contrary to the metaverse mania) but : AI coins performed very well during the January-February 2023 echo bubble (and the ChatGPT craze), which was the most risk-on environment of the year until October, and then AI coins performed well in October / November 2023 again, and then once again now in February 2024.

I think many AI coins are mostly vaporware, but I don’t want to fade a narrative that is so strong in the tech world. Some of the most insane gains of this cycle will come from AI x crypto.

Memecoins

Memecoins have been some of the best-performers of the last cycle. $DOGE started 2021 at a $600M market cap. In the 5 months that followed, greatly helped by Elon Musk who started to shill it hard until its SNL top, $DOGE 150X’d in price, and reached a gigantic $90bn market cap.

A few months later, a great rotation happened and $SHIB, another doge-themed memecoin similar to $DOGE, reached a $40bn market cap, while its value at the beginning of 2021 was less than $5M.

A lot of others memecoins reached crazy valuations : $SAFEMOON ($17bn at its top), $ELON (more than $1bn), $AKITA ($1.5bn), $FLOKI ($3bn).

Memecoins are definitely here to stay, and it is probably a few memecoins that will be the top-performers of the new cycle. What mostly drives price in crypto is not fundamentals but narratives and speculation, and memecoins are simply coins that take this to the extreme by being transparent about the fact that they are useless. There is no ceiling in the potential capitalization of a thing that cannot be rationally valued.

A famous infographic by DegenSpartan

NFTs

NFTs have been a completely new crypto category and narrative (technically, it was not new, but it was for the market) of the 2021 bull run, and one of the places where the most insane gains have been made.

When we say “NFTs”, we are mainly referring to profil picture collections, and the first (and OG) one to go crazy has been CryptoPunks, with a floor price that jumped from 5 ETH in January 2021 to 20 ETH in March 2021, and then pumped again during the summer to 100 ETH ! One year before, during the 2020 summer, the floor price was only 1 ETH.

A large number of NFT PFP collections have been launched, the most successful one behind CryptoPunks has obviously been Bored Apes, but we can also cite Pudgy Penguins, Art Blocks (not a PFP collection), Doodles, Cool Cats, etc.

Thoughts about cycles : how to play rotations to maximize profits ?

• Crypto trading is a game of rotations from narratives to narratives, and while it is close to impossible to nail all the short-term rotations, there are a few lessons that we can keep in mind. Some narratives remain strong during the whole bull run, for example the alt L1 trade never stopped (especially SOLUNAVAX), but most trends last around 1 month, so that is a first thing to know. The meat of a pump usually happens during a few weeks to one month, after that there is a fatigue and the attention of the market switches to something else. Of course this is a very rough pattern, and some coins manage to outperform during several consecutive months, but usually, if people have been talking a lot about something for a month straight (think about metaverse in November 2021), be aware that the trend could be exhausted.

• As we go through a bull run, people tend to crank up the risk. This means that the main narratives at the beginning of a bull run might have some strong fundamentals, but as time goes on, traders will be looking for more and more risky things, with higher and higher yields, and things that make less and less sense.

• For example in 2020-2021, $LINK (strong fundamentals) was a best performer of the bear market, then we had DeFi summer which introduced a new paradigm that was DeFi (strong fundamentals), then we had the BTC run (strong fundamentals, obviously), and then during the first part of the bull run, some legit DeFi coins were among the top performers ($AAVE, $SNX, $RUNE, $UNI).

• In the following months, it got more and more degen, with vaporware overvalued at a few billions FDV (metaverse, gaming), with ultra-high yield pure ponzinomics seen as the future of France (Olympus DAO $OHM), with forks and forks and forks (Olympus forks, Wonderland $TIME). At this point, when all of these “top signals” appear in the market, then you might be looking to exit, or at least de-risk substantially. Seeing tons of crypto games that launched (via launchpads for example) at absurd valuations (>$1bn) while they had nothing to offer besides promises was a good sign that we were nearing the top. Of course, take all of this with a grain of salt, because the crypto market is constantly going degen (DeFi summer was already ponzinomics, new memecoins are permanently being launched and traded, etc), and you can find “top signals” more or less every time in crypto if you are looking for them.

• If a coin has been a best-performer of the bear market, it is unlikely to outperform during the whole bull cycle. At least, this has been true in 2021, but it was a singular bull run insofar as it was clearly divided into 2 parts (before May 2021, and then after July 2021). A lot of coins that have been very strong during the bear market topped around May 2021 or even before : $AAVE $SNX $RUNE $THETA $KSM $SUSHI. $LINK, a monster during 2019 and 2020, even topped in BTC terms during DeFi summer.

• During the second part of the bull run, look for new narratives (metaverse, NFTs, in 2021) and be ready to embrace the degen spirit with things that make less and less sense, introduce new types of ponzinomics and have a cultish aspect (more about this in the next section).

Promising signs for a great pump… and then a great dump

Crypto tends to exacerbate a lot of the human psychological biases and emotions, which is often a catalyst for more extreme pumps, and also more extreme dumps. Two such examples of catalysts seem particularly important to identify :

“Main characters” and the worshipping of some crypto figures

The crypto market likes to have “main characters” that are often worshipped and will become a strong component that justifies the pump of some cryptos. You can easily find one central figure behind any of the really major pumps of 2021 :

• SBF (Sam Bankman-Fried) was seen as a genius, which is a reason for the incredible performance of $SOL (Sam was a $SOL bull and proponent), but also $FTT.

• CZ was the face and leader of Binance, he was considered as someone you should not bet against, and this is a part of the success of $BNB.

• Su Zhu was seen as god-like investor/trader that manages billions and he was an Avalanche bull, which was also a catalyst for the performance of $AVAX.

• Elon Musk was obviously one of the main reason for the $DOGE pump to almost $100bn market cap.

• Do Kwon was the cocky founder of Terra Luna, and his “assertiveness” (to say the least) probably played a role in the (initial) success of $LUNA.

• Richard Heart, the colorful figure behind $HEX, was worshipped by the Hexicans

• Charles Hoskinson, the father of Cardano, was probably one the main reasons for the huge market cap that $ADA reached

• Andre Cronje, a central figure of Fantom ($FTM), and that co-founded a few other projects, was considered as a gigabrain for some people.

• Daniele Sestagalli lead 3 projects that all had crazy pumps : $TIME, $SPELL, and $ICE.

Two types of main characters stand out : either the “gigabrain” profile, either the “leader of a community/worshipped by a community” profile. Keep it in mind for the next bull run.

Cult x Ponzi = Pump-and-dump on the horizon

The second and third catalysts are : cultish aspects and “ponzi-like” tokenomics. The funny thing is that these often go together, and they even often come with the “main character” catalyst. Ponzinomics usually mean very high yield that ends up being unsustainable in one form or another. Having a “cultish aspect” is harder to explain but a few examples will illustrate this :

• Luna is one of the best examples : Do Kwon was the charismatic leader, there was an obvious Ponzinomics component with the 20% Anchor yield on UST, and it was sort of a cult, because for example the community members were calling themselves “Lunatics” and you got a lot of pushback from them if you challenged the sustainability of the UST model.

• Olympus DAO ($OHM) : the main catalyst of this one was the ponzinomics, which was basically an insanely high staking yield, and you may remember that there was a leader of Olympus, it was a Twitter anon called “Zeus”.

• The projects of Daniele Sestagalli obviously had the “degen touch” : Wonderland was an Olympus fork with even higher yields, and Abracadabra had a “degenbox” product that enabled people to loop their UST and get a levered Anchor yield if I recall correctly. And the community that gathered around Daniele Sestagalli was called the “frog nation”…

• HEX : Richard Heart as a worshipped leader + ponzinomics (”lock $HEX for 10 years to increase your yield”) + Cult (community = the Hexicans).

Conclusion

I hope that this article can be useful for you ! Feel free to give me feedback in the comments, to ask questions if needed, and to add the lessons you've learned yourself from the 2021 bull run.