Diamond Hands Finale: Four Altcoin Investment Opportunities I'm Watching
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Diamond Hands Finale: Four Altcoin Investment Opportunities I'm Watching
See if this version 💎👋 can outperform BTC 😎 in the next two years.
Navigating Web3 tides with focused insightsAuthor: Lao Bai
It's been two years since I last wrote a Diamond Hands series. Today, here comes the third edition—and likely the final one—because this market cycle has rewarded only BTC diamond hands, while mercilessly washing out nearly all others. Previous Diamond Hands articles leaned toward finding alpha; this one leans more toward beta, especially since some earlier alpha picks ended up getting rekt beyond recognition—truly a painful memory best left behind.
The biggest beta remains the dominant one plus three strong contenders: BTC + ETH, SOL, BNB. As for altcoin betas, I personally favor the following four right now and plan to hold them for a while longer.
1. AAVE - AAVE is one of the very few assets outside the "one dominant, three strong" group that you can actually hold long-term and still sleep soundly at night. Its TVL has already surpassed previous highs, exceeding $30 billion. Even more impressively, after all these years, it has never suffered a major security incident. You see traditional financial institutions like JP Morgan dipping their toes into blockchain—they prefer testing on AAVE first.
This current wave combining RWA+ stablecoins represents the convergence of blockchain and traditional finance, boosting efficiency in a fast, cost-effective way. This is undoubtedly the most important direction for blockchain’s future development. Among projects positioned to ride this wave—aside from layer-1 chains—the outcomes for Uniswap/Curve are less certain, whereas AAVE is definitely, unquestionably, and firmly one of the leading beneficiaries. The upcoming launch of V4 in the coming months is also highly anticipated, making it well worth holding.
2. Pendle - TVL already at $6 billion, nearing its previous high, extremely stable, and poised to enter its third wave
Pendle’s first wave relied on Sushiswap and other DeFi protocols, splitting yield from liquidity mining. But it generated little buzz or momentum because those yields were largely illusory.
The second wave came with Lido and Eigenlayer’s LST/LRT, which skyrocketed. This time, the yields were much more tangible.
The next, third wave will be driven by RWA and stablecoins. In traditional finance, yield tranching and risk segmentation form an extremely critical sector with massive market potential (on the order of tens of trillions). As more RWA and stablecoin assets appear on-chain, this sector is bound to grow alongside them. Unlike AAVE, which still faces competition from Compound and Morpho, Pendle dominates this space almost entirely alone—so far ahead that no real competitor is even visible through a telescope.
The only downside? The token price is too stable—minimal volatility. I’ll hold it for several months and see how it goes.
3. Hyperliquid - The strongest launched project of this cycle, without exception
Its overwhelming user experience and trading depth across chains have led to equally dominant trading volume and market cap leadership.
Moreover, Hyperliquid isn’t just another perpetuals platform—it’s positioning itself as the liquidity layer on-chain. Phantom’s recent integration is solid proof of this. More front-ends will connect to Hyperliquid as a backend liquidity provider in the future.
Beyond its ongoing aggressive buyback program, Hyperliquid is preparing additional moves such as building the HyperEVM ecosystem and launching HIP-3 for RWA-based perps.
However, Hyperliquid is the only diamond hand I haven’t yet entered, simply because I sold my airdropped tokens between 4–10 and now feel regret seeing its near $50 billion market cap. It’s hard to pull the trigger again. But I will eventually find a good entry point. If not now, then surely during the next bear market…
4. Bittensor - I used to be skeptical about Bittensor, but only recently did I change my mind and become bullish. I plan to hold it for 6–12 months.
My skepticism stemmed from its product-market fit (PMF). I started questioning it back in 2023 and still harbor doubts—Bittensor always reminded me of Filecoin.
Filecoin fills storage with junk data due to lack of real demand; Bittensor creates artificial demand and miners compete over inference results that seem utterly useless. Last year, there were many scandals involving miners colluding with validators, spreading rumors, emissions drama, etc…
So overall, it just felt like Filecoin all over again.
So why did I recently change my mind?
First, this market cycle has falsified many crypto narratives while confirming two clear ones.
The confirmed sectors are finance (DeFi, RWA, stablecoins) and gambling (memes, Polymarket, various on-chain casinos).
One of the few remaining unproven but still plausible narratives is Crypto+AI—and among these, Crypto+AI stands out as potentially the largest. Even if it can't be fully validated in the short-to-medium term, it's also extremely difficult to completely disprove.
Among all current AI+Crypto projects, Bittensor is the hardest to dismiss.
Here’s why:
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It has the highest market cap in this sector and leads in mindshare. When people think of Crypto+AI, Bittensor is usually the first name that comes to mind.
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Few people today can clearly explain what Bittensor actually does. Try explaining it to a friend in ten minutes—can you actually make it understandable?
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Subnets are already approaching 100 in number, with 200–300 expected next year. Some subnets are already showing signs of PMF+ and generating revenue—even if most clients are still Web3 projects and the income is negligible relative to Bittensor’s market cap…
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Bittensor’s halving is scheduled for January–February next year. Like BTC, it has a hard cap of 21 million and halves roughly every four years. Next year’s halving will undoubtedly be a major event.
In terms of emission mechanics and mindshare, Bittensor functions as the BTC of the AIxCrypto space. Meanwhile, its subnet design, consensus, and proof mechanisms resemble ETH—there’s a chance a breakout subnet could emerge with real PMF, just as Uniswap and AAVE emerged on Ethereum. After all, its subnets span decentralized training, data, compute, inference, text, image, video, drug research, and so on—virtually every conceivable AI+Crypto niche already has one or more subnets actively working on it. Compared to other projects, Bittensor increasingly feels like a foundational platform akin to ETH, especially now that subnets can issue their own tokens.
But Bittensor’s biggest challenge remains its high valuation. Daily emissions exceed one million USD alone, making it difficult to absorb at this stage. If it feels expensive now, pay close attention around the first half of next year. Whether to hold now is optional.
Alright, this concludes the Diamond Hands series once and for all. In the next couple of years, let’s look back and see whether this final edition of diamond hands can outperform BTC. So let’s record today’s prices: BTC-118275, AAVE - 312.7, Pendle - 4.43, Hyper - 44, TAO- 433.
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Lao Bai
