By Stan Miroshnik
When I started my career at Morgan Stanley in the early 2000s, one of the most anticipated thought pieces each year was Byron Wein’s “10 Surprises,” a tradition he started in 1986. The list challenged conventional thinking and served as a catalyst for a variant view on markets. Though we lost Byron in October, this tradition lives on, carried forward by his colleagues at Blackstone where he spent the last decade of his career.
At TenSquared, we spend all our time thinking about the digital asset ecosystem from first principles. We followed in Byron’s footsteps and created “10 Surprises for Crypto - 2024” based on the trends and the unlikely surprises that we contemplate in our scenario analysis and worldview. In a pessimistic market, we are non-consensus investors - the DAE future is bright.
We follow Byron’s definition of “surprise” as an event that the average investor would only assign a one out of three chance of taking place but which he believed is “probable,” having a better than 50% likelihood of happening.
10SQ Ten Surprises for 2024:
1. A large non-mining blockchain company goes public in Q4’24 after IPO markets reopen in H2’24, paving the way for 2025 listings by fast growing blue chip DAE leaders. Beneficiaries: Kraken, Gemini, Circle, Blockdaemon, Chainalysis, Fireblocks, Figure, Ledger
2. China eases its domestic crypto policy to a more accommodative stance in an effort to not be left behind. Combined with easing credit conditions, the Chinese consumer / trader roars back into the scene. Beneficiaries: Huobi, OKX, MatrixPort, Aspen Digital, Alibaba, Tencent
3. Yield generated by Proof of Stake protocols is productized into bond-like instruments that are taken up by and find traction with large institutional investors, causing billion dollar inflows into Ethereum. Beneficiaries: Figment, Blockdaemon, Kraken, Alluvial, Lido, Ethena, Ledger
4. Coinbase prevails in its legal battles with the SEC, setting precedent for other US exchanges and adding further regulatory clarity, resulting in significant institutional inflows into the space and driving a wave of M&A. Beneficiaries: Kraken, Gemini, Deribit, eToro
5. FTX and Celsius creditors receive a full recovery and more via equity upside in NewCos. The majority of funds received pursuant to claims are recycled back into the digital asset space in 2024. In addition, the equity of restructured entities (FTX 2.0, Fahrenheit Mining NewCo, and others) distributed to creditors becomes very valuable. Beneficiaries: Fahrenheit, Bullish, Figure
6. A Web3 game attracts more than 10MM MAUs with traction driven by a new gameplay mechanic that is only viable due to blockchain technology and captures popular attention beyond crypto. This ushers millions of new users into the space. Beneficiaries: Parallel NFT, Animoca Brands, Horizon Blockchain Games, Yuga Labs, Star Atlas, Splinterlands
7. At least one traditional brand’s NFT program surpasses 1MM users as a new wave of improved UX and NFT utility lock in customers. Brands follow in the footsteps of Nike and make acquisitions in the NFT sector; "Phygitals," physical products linked to NFTs, become a common marketing practice and user engagement tool among consumer brands. Beneficiaries: Animoca Brands, Arianee, Oneof, Blackbird, Forum3
8. JP Morgan’s ONYX becomes a de facto standard for blockchain-based banking and the leading permissioned blockchain, surpassing Hyperledger, R3 Corda and others, as other financial institutions adopt the technology. Blockchain-based settlements executed by big traditional banks become a common practice, and their volume exceeds $100Bn in a year. Beneficiaries: Onyx, Consensys, Ripple, ZeroHash, Figure, AWS Managed Blockchain
9. Prediction markets finally gain traction in the run-up to the election. Traditional media organizations begin referencing prediction markets with similar coverage to what polls currently get. Beneficiaries: Polymarket, Augur, Manifold
10. The intersection of Web3 and AI, driven by distributed compute and distributed storage, become a major crypto narrative driving billions in new venture capital back into the space. Concerns around deepfakes (especially around the U.S election) catalyze interest in blockchain-verified content from major media organizations. Beneficiaries: Filecoin, Arweave, Akash, RiskZero, ModulusLabs, OTOY, Bittensor, Space & Time
About the author
Stan Miroshnik is the Founder and Managing Partner of TenSquared Capital LLC (10SQ). Stan has nearly 25 years of experience in growth and venture investing, investment banking, and corporate finance that bring a depth of relationships with founders, companies, regulators, and peer investors. Prior to launching 10SQ, Stan co-founded 10T Holdings LLC in 2019 - one of the largest private equity investment managers focused on the digital asset ecosystem with $1.2Bn in AUM. Stan started his career focused on financial institutions at Morgan Stanley, with investment banking roles across New York, London, and Emerging Markets. He received his B.A. in Molecular Cell Biology and B.S. in Business Administration from the University of California, Berkeley, and an MBA from the Sloan School at Massachusetts Institute of Technology (M.I.T).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.