According to Milk Road, the market for Layer 1 blockchains (L1s) is expected to become increasingly fragmented, akin to social networks, suggesting that investing solely in one L1 is not advisable. This perspective highlights the importance of diversifying investments across different blockchain applications rather than concentrating too heavily on L1s. The report also references discussions with Avichal, emphasizing the strategic allocation between L1s and blockchain applications. These insights are crucial for traders looking to optimize their cryptocurrency portfolios by balancing investments between foundational blockchain infrastructures and emerging applications. Source: Milk Road.

According to Pentoshi, the cryptocurrency market has significantly evolved since the 'golden era' of 2017 and 2021, where markets saw 10x-50x-100x growths in liquidity. Currently, the market experiences high fragmentation with over 50,000 new launches daily, leading to dispersed liquidity and a PvP (player versus player) trading environment. These changes impact traders' ability to hold positions long-term, as cited by Pentoshi.