It has been a strong year for crypto markets, with total crypto market cap up ~44% year-to-date, representing an increase of over US$720B. On a year-on-year basis, total crypto market cap is up over 104%, having added over US$1.2T since last July.
Bitcoin has had an active year following the U.S. spot ETF approval in January, as well as the fourth Halving event and launch of Runes in April. Scalability and DeFi on Bitcoin has also become a much more active space. Correspondingly, Bitcoin’s market dominance has grown this year from ~50% to over 55%.
Outside Nvidia, Bitcoin and Ether have been notable outperformers compared to common TradFi investments, including Alphabet, Amazon, Apple. Bitcoin and Ether significantly lead the major stock indices in terms of performances, with many like the Hang Seng Index and FTSE 100 showing single-digit returns this year.
The U.S. spot Bitcoin ETFs have been received extremely positively and have attracted over US$17B in net inflows and average US$2.5B in daily trading volume. The recent launch of the U.S. spot Ether ETFs has also been a positive tailwind for the industry, further legitimizing the asset class from a TradFi lens.
Stablecoin supply, a measure of inflows into crypto and a proxy for potential buying pressure, is the highest (~US$165B) it has been since May 2022, and fast-approaching all-time highs (which are ~US$188B).
Restaking has been a dominant Ethereum narrative in 2024 and attracted over US$18B of TVL. While EigenLayer leads the pack, new competitors like Karak and Symbiotic are emerging.
Solana’s DEX activity has hit new all-time highs, both in volume and weekly DEX traders. Weekly traders have been significantly higher on Solana than other major chains. The popularity of memecoins on the chain, aided by their relatively cheap fees and cohesive and unfragmented product suite, has likely been a key driver.
Prediction markets have seen a ~212% increase in TVL since the beginning of the year, exceeding US$108M for the first time ever. Polymarket has been dominant, controlling ~75% of the market and seeing a ~500% increase in monthly volume in July compared to January.
Tether remains a leader in the stablecoin space, with the high rate environment and increased adoption buoying its business and making it more profitable than major Wall Street investment banks like Morgan Stanley and Goldman Sachs.
The NFT market has been in a slump, with sales volumes down over 70% since their peak in 2021. Profile-picture NFTs (“PFPs”) seem to be in a particularly negative position, with even the likes of CryptoPunks down over 50% in floor price this year. Pudgy Penguins has made some noise with the success of their physical plush toys and might have some interesting updates with their new consumer-focused L2, Abstract.
Memecoins have been the best performing narrative this year, returning over 280%. Structural reasons, where 100% of tokens are commonly unlocked and circulating with extremely limited (or no) VC involvement, has played at least a partial role in the appeal and success of the sub-sector. Especially, as awareness about the effects of significantly token unlocks becomes more commonplace.
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