Crypto investment firm Pantera Capital has released a new report stating that tokens with promising underlying protocols and a demonstrated product-market fit are expected to outperform in the upcoming cycle. The firm believes that token selection will be crucial for outperformance, emphasizing the importance of protocols with real revenues and strong unit economics.

While Pantera Capital did not specify any particular tokens, they highlighted the significance of protocols with product market fit in various sectors. According to the firm, this approach is similar to evaluating equities in traditional markets.

“Our thesis is that altcoins underlying protocols that have product market fit and are generating real revenues with strong unit economics will perform best in the coming cycle, just as one would expect across other asset classes like equities.”

Managing partner Paul Veradittakit also shared key predictions for 2024, including Bitcoin’s anticipated renaissance driven by the fourth halving, institutional approval of spot Bitcoin ETFs, and advancements in programmability features. Pantera Capital foresees the growth of decentralized finance (defi) on the Bitcoin blockchain, with total value locked potentially reaching 1-2% of Bitcoin’s market cap.

Additionally, the firm expects a shift from financial to social experiences in web3, with experiments in tokenized social interactions and bridges connecting traditional finance with defi. Pantera Capital believes that the industry has moved past the challenges of the bear market, emphasizing the broader impact of blockchain technology on consumer, social, and developer experiences.

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