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GM! Welcome to Milk Road PRO – your weekly crypto deep dive that's as exciting as finding buried treasure. Today, we're mapping out crypto's journey to a $10 trillion market! |
The total crypto market cap sits at $2.7 trillion today, encompassing the market caps of over 14.6k tokens. |
Prediction: We expect this market to grow and potentially reach $10-$12 trillion this cycle. 🥳 |
Today, Bitcoin represents 50.38% of that $2.7T, Ethereum 18%, Stablecoins 5.93% and DeFi 3.74%. |
Have you ever considered what the market might look like when we hit $10 trillion? Where will all of that new money flow? Will certain sectors outperform others or will everything stay the same? |
Understanding this is the key to allocating properly right now to capitalize on the $10T opportunity of tomorrow. This is exactly what we are going to explore today. |
If you want to make sure your portfolio is well-positioned to profit from this next bull run, this report is for you. |
So let's start things off by showing you the end-results of this report. |
Here is the current market share of crypto sectors compared to our projections for the end of 2025. |
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In today's report, we will break down the chart above and explain how we reached these insights as well as what it means for you to shape your portfolio allocation. |
We are going to answer the following questions: |
What is the current market share and risk/reward profile of different crypto sectors? Where do we predict the market share of crypto sectors will be when the market hits $10T? How can we optimize our portfolio to capitalize on the crypto industry's growth from $2.7T to $10T in the next 18 months?
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P.S. - We're hosting a PRO AMA next week — scroll to the bottom for more info. 👀 |
Let's start by looking at crypto from a high level. |
CRYPTO HIGH LEVEL VIEW 🧐 |
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Most people look at this chart of the total crypto market cap and wonder where it is going from here. |
While it's likely to go up (our target is around $10T-$12T), the key questions are: |
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We try to answer those later in the report. Before we get there, let's talk about how to capitalize on this opportunity. |
What sets the best investors apart from the rest? |
They make investment decisions today based on what they expect the market to look like in the future. So, we need to examine and compare the current state of the market with the future market. |
Let's start with the current market composition of crypto. |
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We can see clear Bitcoin dominance at 50.4%, followed by Layer 1 blockchains (L1s) at 28.9%. Together, BTC and L1s make up about 80% of the market share. |
The rest of the market consists of smaller sectors such as stablecoins, DeFi, memecoins, AI, and others (i.e. storage, metaverse, data availability, etc.). |
This gives us a quick and clear understanding of the market distribution. We could simply predict where this market share will be at the end of this cycle and then match our portfolio allocation to this (ie. 50.4% in BTC, 28.9% in L1s, etc.) . |
Or, we can add one more variable into the mix: Risk-reward. |
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Let us explain… We created the chart above – showing the risk-reward curve of crypto sectors – using a combination of factors. |
We use market caps as one proxy for the risk-reward ratio of each category, meaning the higher the market cap, the lower the risk. |
Additionally, we evaluate the fundamentals of each sector, including revenue generation, user base, and network effects. |
Sectors with strong fundamentals and lower volatility generally present lower risks. |
Conversely, highly speculative sectors like memecoins carry higher risks due to their unpredictability and the sheer number of options. With thousands of memecoins available, it becomes extremely challenging to identify the few that will perform well. |
We don't want to dig too deeply into why we've positioned each sector at a specific place on that curve, but rather present you with the framework for looking at markets from different angles. |
This perspective allows us to better navigate the market and determine our portfolio allocation. |
Let's finally reveal how we predict this market to play out when we reach a $10T market around the end of 2025. |
MILK ROAD PRO MARKET SHARE PROJECTIONS 🤔 |
Our main goal is to estimate how the future market composition will look and combine this with our risk-reward curve to develop a proper portfolio allocation. |
We believe this approach will help us make the most out of the coming growth in the crypto market cap. |
We start by looking at the future market composition at the end of year 2025 assuming a $10 trillion crypto market cap – this chart is essential for our assessment. |
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