In 2024, cryptocurrencies are at a crossroads: Bitcoin's strong rise contrasts sharply with the overall market's weakness, until the regulatory changes at the end of the year brighten the outlook.
The crypto narrative is being recalibrated, and 2025 will bring a fresh start. This article aims to briefly review the market conditions of this year.
Many in the crypto community believe that with the launch of spot ETF products, the cryptocurrency market will rebound to new historical highs. But the reality is not entirely so, at least not as many expect.
In the first quarter of this year, with the launch of ETFs, Bitcoin rose over 50%, reaching $73,000. Billions of dollars flowed directly in, and the market no longer had concerns about institutional demand. For about 7 months, Bitcoin fluctuated mainly between $60,000 and $70,000.
Unfortunately, most tokens are struggling, aside from a few standout tokens. The initial 'failure' (or lack of liquidity) after the mid-year launch of spot ETH liquidity exacerbated these dilemmas. Much of the story in 2024 revolves around gloomy market sentiment and infighting.
However, after the November presidential election, the crypto industry finally saw a glimmer of hope. Changes in market sentiment and risk appetite over the past few weeks have reflected this.
Cycle strategies are on track
At the end of 2022, Delphi Digital outlined the reasons for the bear market bottom, expressing confidence in the upcoming bull market cycle over 15 months ago. In last year's report, it predicted that Bitcoin would break new highs in the fourth quarter of 2024.
On a macro level, reality has always met expectations. So far, Bitcoin halving has not been the main catalyst for the cryptocurrency market cycle, but rather the liquidity cycle.
At the end of last year, Delphi Digital listed favorable conditions for Bitcoin to perform strongly in the first quarter, one of which is a surge in global liquidity. It also warned of a higher risk of market pullbacks from the end of the first quarter of 2024 to the beginning of the second quarter due to signs of weakening liquidity momentum.
So far this year, Bitcoin has risen over 130%, and this has been achieved without much support from the Federal Reserve. In fact, liquidity from the Fed has been steadily declining over the past 9-10 months.
Optimism is returning
2024 is a strange year for the crypto market. On one hand, most mainstream currencies have recovered to historical highs, while the broader altcoin market has also seen a revival.
However, the crypto community (like Twitter) has been embroiled in infighting for most of this year. The gloomy sentiment of 2024 stands in stark contrast to the positive price trends.
The reasons for poor market sentiment start with Bitcoin's dominance. Bitcoin has surged 130% since the beginning of the year, reaching a three-year high in dominance.
The second factor is decentralization: some token prices are rising, some are slightly up, but most token prices are falling or consolidating.
The classic 'road to altcoin season' that many have taken for granted has not materialized.
Supply and demand imbalance
As mentioned in many reports over the past year, the crypto market is facing a significant supply and demand imbalance. In short, the demand for cryptocurrencies has not kept pace with the overall supply.
Too many tokens
The aggregator has launched over 10,000 tokens, compared to about 1,500 in 2017, growing tenfold.
Applications like pump.fun have made token creation easy: over 4 million tokens have been issued since January 2024, with over 50 million tokens entering Solana's Raydium.
Continuation of Memecoins
2024 has given rise to a Major-Memecoin barbell investment portfolio.
Will these market dynamics remain unchanged, with memecoins dominating for a year? Or will the crypto market return to fundamentals?
The reality is more complex, influenced by speculative enthusiasm and changing market trends.
Accelerated development of Solana
In the last cycle, SOL rose from $1 to $260 in a year. Although the ecosystem is still in its infancy, it has attracted teams like Jito, Drift, and Helium. All of these teams will become foundational parts of the network.
Solana ultimately rose too high. Following the FTX collapse, the bear market, and doubts about chain stability, SOL fell by 96%.
On Christmas 2022, Bonk airdropped 50% of its supply to the Solana community. The trading price of SOL was $11, and the outlook was not optimistic. Days later, SOL dropped to a low of $8, ending a brutal year.
Solana was reborn from the ashes in 2023. The core team, focusing on loyal user service through Drift Protocol, Jito, and Tensor Foundation, steadily innovates to drive recovery.
As we enter 2025, there are still some issues:
Has the SOL rally come to an end?
Will memecoins disappear?
Can Base capture market share?
Will Ethereum strike back?
While these concerns are valid, they do not capture the essence. Solana's performance in 2025 will be based on two core beliefs:
Solana's data shows SOL/ETH is being repriced. Lower-level activity shows strong fundamentals, suggesting more upside compared to ETH.
Leadership and Culture: Solana's relentless innovation and thriving ecosystem give it a unique advantage in the cryptocurrency space.
2024 can be seen as a turning point for the industry, but no one knows exactly how 2025 will unfold.