Author: Binance Research
Translation: Blockchain in Vernacular
After a significant growth of 109% in 2023, the crypto market continued to rise in the first half of 2024, with the total market capitalization increasing by 37.3%. This growth was mainly driven by a 60.2% gain in the first quarter of the year, before giving back some gains in the second quarter, with the market value falling by 14.3%.
The successful launch of a U.S. spot Bitcoin exchange-traded fund ("ETF") in January marked a pivotal moment for the industry and sparked a period of bullish sentiment and positive inflows. While the initial price reaction was muted, the market posted strong gains in the following months as it digested the impact of ETFs in attracting new capital, increasing investor accessibility, and strengthening the acceptance of cryptocurrencies as mainstream investments.
It’s worth noting that several narratives gained momentum in the first half of the year — for example, the points meta, the Restaking hype, the memecoins craze, and the airdrop season, etc. While some of these narratives may have subsided, they were undoubtedly strong drivers of on-chain activity and transactions in the first half of the year.
Looking ahead, we will be closely watching the Fed’s interest rate policy, the approval and progress of spot Ethereum ETFs, and the emergence or resurgence of crypto-specific narratives by monitoring on-chain indicators. We are aware of the structural drag from the large number of tokens that will be unlocked in the coming months and years, and urge investors to do their own research. The good news is that many token valuations have corrected over the past few months and returned to more reasonable levels.
Here are some key takeaways from the report:
1. Public Chain Layer1 & Layer2
Layer1 (“L1”) had a strong start to the year, with Bitcoin continuing to gain market dominance following its fourth halving, the launch of the Runes protocol, and the approval of a US spot ETF (attracting over $14 billion in inflows to date). Ethereum experienced a reset breakout and EIP-4844 update, BNB Chain continued to work on opBNB and Greenfield, and Solana performed well in the memecoin space and launched blockchain links (“blinks”).
The first half of 2024 is the airdrop season in the Layer2 ("L2") space, especially zero-knowledge ("zk") projects. The promise of incentives has attracted a large amount of capital to L2 chains, bringing the total locked value (TVL) of L2 to $43 billion, an increase of 90% in the first 6 months alone.
2、DeFi
2024 saw a massive influx of capital into decentralized finance ("DeFi"), driving TVL up 72.8% year-to-date ("YTD") from $54.4 billion at the start of the year to $94.1 billion. This growth has benefited almost all DeFi sectors, both major and niche, prompting some protocols to bring previously unattainable financial primitives to the chain.
3. Stablecoins
The stablecoin market has seen a significant recovery and is now just 14.5% below its April 2022 peak before the TerraUSD (UST) crash. As of June 30, 2024, the stablecoin market capitalization was $161 billion, a two-year high. While Tether’s USDT continues to dominate, Circle’s USDC and Ethena’s USDe have also increased their market share.
4、NFT
The NFT market experienced turbulence in the first half of the year, with sales falling and major projects seeing floor prices drop by more than 50%. Blur continued to dominate, driven by the BlastToken airdrop, while Pudgy Penguins had some success with its physical toys. Bitcoin NFTs also continued to perform well.
5、SocialFi
SocialFi continues to grow, with Lens Protocol announcing the upcoming launch of its zk chain, Lens Network. Farcaster continued user growth after the launch of Frames, while friend.tech released their token and v2. The Fantasy.top trading card game is also a notable highlight.
6、GameFi
The Web3 gaming sector had a strong first quarter, but the market capitalization of gaming project tokens fell sharply in the second quarter along with the rest of the altcoin market. Despite the price drop, user growth indicators are healthier than ever, with projects such as Pixels and Hamster Kombat attracting a large number of players through airdrop tokens.
Other notable areas include memecoins, artificial intelligence (“AI”), and decentralized physical infrastructure networks (“DePIN”). These sectors continue to receive strong attention from investors and the broader community in the first half of 2024.
7. Outlook for the second half of the year
As we head into the second half of 2024, we continue to be particularly interested in six key themes and expect these areas to make significant progress throughout the year. These themes span a variety of narratives and sectors, such as those related to the macro environment, the Bitcoin ecosystem, ownership economic applications, real world assets (“RWAs”), and more.
Full version link: https://public.bnbstatic.com/static/files/research/half-year-report-2024.pdf
