Written by: Gyro Finance
2024 is undoubtedly an important year in the history of crypto.
This year, the crypto industry has successfully broken through the two core narratives of ETFs and the US election, with Bitcoin as the main leverage. Listed companies, traditional financial institutions and even national governments have flocked in, and mainstreaming and recognition have increased significantly. The regulatory environment has also moved towards a clear and relaxed path with the coming of the new government. Mainstream collisions, path differentiation and regulatory evolution have become the main themes of the industry this year.
01 Review of 2024: Bitcoin tops the charts, Ethereum is catching up, and MEME casinos are attracting attention
Overall, Bitcoin is undoubtedly the core narrative of the industry's major developments this year.
ETFs and national reserves have allowed Bitcoin to successfully reach $100,000, officially declaring that Bitcoin has transcended the definition of cryptocurrency and extended its role as a globally resilient anti-inflation asset. Its value storage has gained recognition, and BTC is beginning to transition from digital gold to a super-sovereign currency, marking a phased victory for this grand financial experiment that began with Satoshi Nakamoto. On the other hand, the Bitcoin ecosystem has expanded this year. Although inscriptions, runes, and even L2 are experiencing a hot-cold dichotomy, Bitcoin's diversified ecosystem has already begun to take shape, with applications such as BTCFi, NFTs, gaming, and social networking continuing to develop. Bitcoin DeFi's TVL skyrocketed from $300 million at the beginning of the year to $6.755 billion, growing more than 20 times throughout the year. Among them, Babylon has become the largest protocol on the Bitcoin chain, with a TVL of $5.564 billion as of December 20, accounting for 82.37% of the total. The broader BTCFi has performed impressively this year, with the share of Bitcoin spot ETFs soaring and MicroStrategy being selected into the NASDAQ 100, both reflecting Bitcoin's overwhelming success in the CeFi field.
Returning to the field of public chains, this year's leader Ethereum has not had it easy. Compared to other assets, its performance has been poor, with declines in value capture and user activity, and its narrative has not been as strong as before, suffering under the theory of value. The consensus on the revival of DeFi is already formed, but aside from the TVL tidal wave stirred up by re-staking, it seems that only Aave is shouldering the entire burden, with actual investment clearly insufficient. However, the emergence of the derivatives dark horse Hyperliquid at year-end has not only dealt a severe blow to CEX but has also sounded the horn for a counterattack in DeFi. On the other hand, after the Dencun upgrade, Ethereum Layer 2's internal competition has accelerated and continues to covet the mainnet's share, leading to a large discussion about Ethereum's mechanism in the market, with voices of doubt emerging one after another, and even the rapid growth of Base has led to rumors that Ethereum's future lies with Coinbase.
The strong rise of Solana contrasts sharply with this. From the perspective of TVL, Ethereum's market share in public chains has dropped from 58.38% at the beginning of the year to 55.59%, while Solana has surged from obscurity at the beginning of the year to 6.9% by year-end, becoming the second-largest public chain after Ethereum. SOL has also created a growth miracle, soaring from $6 two years ago to the current $200, with an increase of over 100% just this year. In terms of recovery path, leveraging its unique advantages of low cost and high efficiency, Solana has targeted core liquidity positioning and has leapt to become the undisputed king of MEME, becoming a retail investor's haven this year. Solana's daily on-chain fees have repeatedly exceeded Ethereum, and the growth of new developers has also surpassed Ethereum, showing a significant trend of overtaking.
TON and SUI have also stood out this year. With 900 million users, Telegram has single-handedly ignited the blockchain gaming field, opening a new entry for Web3 traffic and giving a strong stimulus to a market that had been quiet since September. Backed by a big tree, TON has finally transitioned from the long-standing dawn before explosion into a growth fast lane. According to Dune data, TON's cumulative on-chain users have exceeded 38 million, with a cumulative trading volume of over $2.1 billion. SUI, on the other hand, has completely won people over with its price, rapidly advancing with the Move language public chain, developing hardware, diversifying protocols, and introducing airdrops in a three-pronged approach, seeming to have a bright future. Compared to price-driven SUI, the publicly traded Aptos, despite its relatively weak price performance, has gained more favor from traditional capital this year, successfully establishing partnerships with BlackRock, Franklin Templeton, and Libre, and its compliant nature may bring it a dawn in the new RWA and BTCFI cycle.
From the perspective of applications, MEME is the main driver of the market this year. Essentially, the rise of MEME signifies a transformation in the current market landscape. VC tokens are not being bought, and excess liquidity has nowhere to go, ultimately pouring into sectors with stronger fairness and profit-seeking nature. Within this, the connotation of MEME is also continuously extending, evolving from a single speculative target to a typical representative of cultural finance, with "everything can be MEME" happening in reality. Although in terms of market capitalization, MEME accounts for less than 3% of the top 300 cryptocurrencies (excluding stablecoins), its trading volume continues to occupy 6-7% of the share, recently even surging to 11%, making it the main track with the most concentrated liquidity. According to Coingecko data, MEME accounted for 30.67% of investors' attention this year, ranking first among all tracks. Where attention goes, money naturally follows, and indeed, looking at this year's MEME, pre-sale fundraising, celebrity tokens, zoo battles, PolitFi, and AI, all are top trends within the circle.
In this context, the infrastructure surrounding MEME continues to solidify, and the fair launch platform Pump.fun has emerged, not only reshaping the MEME landscape but also successfully becoming one of the most profitable and successful applications this year. In November, Pump.fun became the first Solana protocol to achieve monthly revenue exceeding $100 million. According to Dune data, as of December 22, Pump.fun's cumulative revenue exceeded $320 million, with the total number of deployed tokens around 4.93 million.
Of course, just because platforms are profitable doesn't mean retail investors are making money. Considering the one in a hundred thousand chance of winning the Golden Dog, and only 3% of users can profit over $1,000 on Pump.fun, coupled with the increasingly prominent trend of MEME institutionalization, from a user perspective, regardless of how fair it seems, being exploited and exploiting others is inevitable. Perhaps it is precisely because of this that adding fundamentals to MEME has become a new development model for projects. Most projects like Desci and AIMEME, which have relatively long cycles, have adopted this model, but as it stands, it still seems like a fleeting moment; the value of "running fast to survive well" is still on the rise.
Influenced by the U.S. elections, another legendary application has surfaced. Polymarket has surpassed all existing betting platforms, becoming hugely popular in the prediction market with high accuracy. In just October, Polymarket's website traffic reached 35 million visits, double that of popular betting sites like FanDuel, and monthly trading volume surged from $40 million in April to $2.5 billion. A broad user base and real demand equate to clear value applications, which is echoed by Vitalik's praise. The only regret is that it has not achieved significant user conversion in the crypto space. However, the new fusion of media and betting is undoubtedly making its slow approach.
As the year comes to an end, large models have transitioned from technology to application, clearly presenting a heated competitive landscape. After a year of AI wandering around the Web3 hotspot, it has finally made a comeback to become this year's dark horse. MEME ignited the spark first, and Truth Terminal quickly followed with Golden Dog GOAT, ACT, and Fartcoin, bringing the hundredfold myth back to life and unveiling the AI Agent frenzy, a niche application wave. Currently, almost all mainstream institutions are optimistic about AI Agents, believing it to be the second phenomenal track after DeFi. However, as of now, the infrastructure in this field is not yet complete, and applications are mainly concentrated on superficial aspects like MEME and Bots, with little deep integration of AI and blockchain. But new also means opportunity, and the cyber-style speculative trading still requires observation.
On the other hand, regarding the core drivers of this round of bull market, PayFi, which seamlessly connects traditional finance with Web3, will undoubtedly be at the forefront. Stablecoins and RWA are typical representatives in this regard. This year, stablecoins have truly shown the anticipated large-scale applications. Not only have they rapidly grown in the crypto field, but they have also begun to occupy a place in global payment and remittance markets. Regions such as Sub-Saharan Africa, Latin America, and Eastern Europe have started to bypass traditional banking systems and directly use stablecoins for transaction settlements, with a year-on-year growth exceeding 40%. Currently circulating stablecoins are valued over $210 billion, significantly higher than the tens of billions in 2020, with an average of over 20 million addresses performing stablecoin transactions on public blockchains each month. In the first half of 2024 alone, the settlement value of stablecoins exceeded $2.6 trillion. Among new products, Ethena has been the standout stablecoin project this year, further sparking interest in interest-bearing stablecoins, and it is also the main driver of AAVE's revenue this year. RWA has been completely ignited after BlackRock's announcement of entry, with the value of RWA expanding from less than $2 billion three years ago to $14 billion this year, covering multiple fields such as lending, real estate, stablecoins, and bonds.
In fact, the development of PayFi aligns with market trends. It is precisely due to the bottleneck encountered in internal market growth that the mainstream institutional market, as a new increment, is at the beginning of a new cycle, seeking incremental space, which is why PayFi is entering a critical process at this stage. It is worth noting that due to its integration with the traditional financial system, this field is also the Web3 track most favored by government agencies. For example, Hong Kong has already listed stablecoins and RWA as important areas for development next year.
Of course, although it seems to be all good, it cannot be denied that under the dual background of nearly two years of macro tightening and industry downturn cycles, the cryptocurrency field has also undergone an exceptionally difficult stress test. Innovative applications are hard to emerge, internal disputes have intensified, and mergers and acquisitions are continual, leading to a weakening of liquidity that has birthed a path differentiation in the crypto industry, forming a core inflow into Bitcoin while continuously siphoning off other currencies. The altcoin market spent most of this year in a garbage time, and the mythical fish's "this round of bull market has no altcoins" has been repeatedly confirmed and denied, only to rebound at the end of the year under Wall Street's attention, kicking off the altcoin season. From the current perspective, the path differentiation is expected to continue in the short term, and the trend will intensify.
02 Looking Ahead to 2025: New Cycle, New Applications, New Directions
Looking back to now, as the New Year bell is about to ring, looking forward to 2025, with the Trump administration opening a new era for cryptocurrency, capital-rich institutions are also eager to try. As of now, more than 15 institutions have released market predictions for next year.
Regarding price predictions, all institutions are optimistic about Bitcoin's value, with 150,000 to 200,000 being the peak price range believed by six institutions. Among them, VanEck and Dragonfly believe the price will reach $150,000 next year, while Presto Research, Bitwise, and Bitcoin Suisse believe it will reach $200,000. If based on strategic reserves, Unstoppable Domains and Bitwise have even proposed predictions of $500,000 or higher. As for other currencies, VanEck, Bitwise, and Presto Research have provided forecasts, believing ETH will be around $6,000 to $7,000, Solana will be between $500 to $750, and SUI may rise to $10. Presto and Forbes believe the total crypto market cap will reach $7.5 to $8 trillion, while Bitcoin Suisse states that the total market cap of altcoins will increase fivefold.
Price predictions also have support, with almost all institutions believing that the U.S. economy will achieve a soft landing next year, the macro environment will improve, and cryptocurrency regulation will also ease. More than five institutions hold positive views on Bitcoin's strategic reserves, believing that at least one sovereign country and many listed companies will include Bitcoin in their reserves. All institutions believe that the increased inflow of ETFs will become an objective fact.
From the perspective of specific tracks, stablecoins, tokenized assets, and AI are the areas of greatest interest for institutions. Regarding stablecoins, VanEck believes the settlement volume of stablecoins will reach $300 billion next year, while Bitwise states that with the acceleration of legislation, financial technology applications, and global settlement, the scale of stablecoins will reach $400 billion. Blockworks Mippo is even more optimistic, giving an estimate of $450 billion. A16z also believes that companies will increasingly accept stablecoins as a payment method. Coinbase has also pointed out in its report that the next wave of true adoption of cryptocurrencies (killer applications) may come from stablecoins and payments.
From the perspective of tokenized assets, A16z, VanEck, Coinbase, Bitwise, Bitcoin Suisse, and Framework all express optimism about the track. In A16z's predictions, it is mentioned that as the costs of blockchain infrastructure decline, the tokenization of non-traditional assets will become a new source of income, further promoting the decentralized economy. VanEck provided specific figures, believing the value of tokenized securities exceeds $50 billion, which aligns with Bitwise's forecast data. Messari has given differentiated conclusions based on actualities, stating that as interest rates drop, tokenized government bonds are expected to face resistance, but idle on-chain funds may gain more favor, with the focus potentially shifting from traditional financial assets to on-chain opportunities.
In terms of AI, A16z, which has heavily invested in the AI field, remains highly optimistic about the integration of AI and cryptocurrency. They believe that the autonomous capabilities of AI will greatly enhance, allowing artificial intelligence to have dedicated wallets for autonomous actions, while decentralized autonomous chatbots will become the first truly autonomous high-value network entities. Coinbase also agrees, pointing out that AI agents equipped with crypto wallets will be at the forefront of disruption. VanEck states that the on-chain activities of AI entities exceed one million, and Robot Ventures believes the total market cap of tokens related to AI agents will grow at least fivefold. Although Dragonfly agrees that tokens will rise significantly, it holds a relatively conservative view on actual applications, believing that the application of underlying protocols might be relatively limited.
Bitwise and Defiprime highlighted core use cases, with the former believing AI Agents will lead the MEME explosion, while the latter stated that DeFi is the deep integration scenario. Messari provided a more specific pathway, stating that the integration of AI and crypto has three major directions: first, new AI casinos like Bittensor and Dynamic TAO; second, blockchain technology will be used for fine-tuning small and professional models; and third, the combination of AI Agents and MEME.
In other areas, institutions have different focal points. For example, YBB believes the revival of DeFi will be the main theme of 2025, Robot Ventures predicts a wave of consolidation in application chains and L2 tracks, and Messari estimates that almost all infrastructure protocols will adopt ZK technology by 2025. The DEPIN industry is expected to achieve revenue from low eight figures to nine figures by 2025. VanEck and Bitcoin Suisse predict a return of NFTs, among others. Due to the excessive amount of text, I will not elaborate on each point here.
03 Conclusion: Where do investors go from here?
Despite slightly varying arguments and differences in subfields, it is clear that all institutions hold optimistic and positive expectations for next year. Whether it is price increases, ecological expansion, or mainstream adoption, it is expected to continue to reach new heights in 2025.
It can be foreseen that from a price perspective, the rise in mainstream cryptocurrency prices is inevitable, especially in Q1 of next year, which will be a period of intensive policy benefits. The altcoin market will continue to experience differentiation, and influenced by ETFs, compliant altcoins will find it easier to attract capital inflows and narrative continuity, while other currencies will gradually contract. If macro liquidity tightens, the risks of altcoins will become more pronounced.
From an industry perspective, while the strong old public chains still hold an ecological leading advantage, the impact from new public chains is also unavoidable. The value capture and narrative of Ethereum will continue to ferment, but optimistically, the influx of external funds may alleviate this situation, and the expansion of technology and the popularization of account abstraction will also become an important breakthrough for Ethereum in 2025. Solana still has growth momentum under capital discourse, but its high dependence on MEME poses a hidden crisis, and competition with Base will become increasingly fierce. Additionally, a batch of new public chains, such as Monad and Berachain, are expected to join the market competition.
The future direction of industrial development is moving from infrastructure to application, with consumer-level applications being the focus in the coming years. Application chains and chain abstractions may become the main ways to build DAPPs. In terms of tracks, the revival of DeFi has become a consensus, but at this stage, it is still projected onto AAVE, while the focus on centralized aspects is concentrated on the payment track, with Hyperliquid and Ethena still worthy of close attention.
The speculative frenzy around MEME is likely to continue in the short term, but the pace will significantly slow down, especially under the influence of the altcoin season. However, key directions like Politifi still have relatively long narratives to pursue. Nevertheless, the infrastructure surrounding MEME is still expected to improve, user experience will be optimized, and the lowering of usage thresholds along with the institutionalization of MEME is an inevitable trend. It is noteworthy that new token launch methods will always trigger a new round of hype.
With incremental markets coming from institutions, the tracks favored by institutions are expected to accelerate development. Stablecoins, AI, RWA, and DePin will still be key narratives in the next round. Additionally, in the context of tight liquidity, any on-chain liquidity tools and protocols that can increase leverage are likely to be favored.
A new cycle is about to arrive, and as investors, letting go of the old and embracing the new, discovering cycles, adapting to cycles, and deeply researching and participating is the only choice.
