Original source: DWF Ventures
Original translation: TechFlow
2024 is shaping up to be a critical juncture in the development of cryptocurrencies - from the active participation of institutional investors to a significant increase in on-chain activity, the year showcases important advancements in the industry.
Here is a review of the year’s statistics:
Growth to continue in 2023
The market has rebounded strongly this year, with total market capitalization breaking its all-time high (ATH) in 2021 and reaching $3.7 trillion.
In addition to the significant increase in liquidity, the number of users and transaction volume are also growing simultaneously - these data indicate the healthy development of the market and the actual increase in usage.
ETFs and the influx of institutional money
One of the biggest market drivers in 2024 was the launch of the Bitcoin ETF in January and the Ethereum ETF in July. These financial products not only lowered the barriers for investors to enter the crypto market, but also reflected the rapid growth of demand for crypto assets among traditional investors.
It is estimated that the total on-chain holdings of Bitcoin ETFs have grown to 1.1 million BTC, doubling from the beginning of the year.
Not only companies in the crypto space, but many traditional companies are also increasing their investments in Bitcoin and other crypto assets. For example, @MicroStrategy, led by Saylor, continues to increase its Bitcoin holdings, and its current holdings have reached 439,000 BTC.
The potential of stablecoins
Stablecoins are a core tool in the cryptocurrency ecosystem. Not only do they enable quick conversions between assets, they are also seen as an important indicator of new capital inflows.
In 2024, the total supply of stablecoins reached $187.5 billion, a record high. At the same time, the number and volume of stablecoin transactions increased by 30%-40% respectively.
It is worth mentioning that even in the face of market fluctuations, the trading volume of stablecoins remains at a high level - this shows that stablecoins have important practical application scenarios beyond trading.
In terms of on-chain stablecoin transaction volume, @trondao, @ethereum, @BNBCHAIN, and @solana continue to dominate. L2 networks like @arbitrum and @base are also showing strong momentum in USDC transaction volume and user growth.
While centralized exchanges (CEXs) still lead decentralized exchanges (DEXs) in trading activity, this landscape is changing.
The recent launch of USDtb by @BlackRock and @ethena_labs provides a safe and convenient way for traditional funds to enter DeFi. As these regulated on-ramps emerge, we may see more funds flow into the on-chain ecosystem in the future.
The rise of the stablecoin market in Latin America and Africa
The stablecoin market in Latin America and Africa has grown by 40%-50% over the past year. These regions have a strong demand for currency hedging tools that do not require third-party trust, so the stablecoin market has developed rapidly here.
More resources are being funneled into these regions, such as @Tether_to’s educational initiatives and @circle’s expansion of payments services in Latin America, so we expect this space to continue to grow strongly in 2025.
Trends in on-chain activity
L2 networks like @base, @arbitrum, and @Optimism, as well as non-EVM chain @solana, have been the standouts in net inflows this year. Users are choosing blockchains with lower transaction fees and faster speeds, which has attracted more users.
The fastest growing sectors are perpetual contracts and decentralized exchanges (DEX). Both sectors have seen a growth of over 150% in trading volume and a 2-3x increase in total value locked (TVL). The memecoin craze, sparked by @pumpdotfun, has greatly boosted trading volume, with @RaydiumProtocol being one of the main beneficiaries, while also driving the development of other ecosystems. In addition, this trend has led to the widespread use of trading bots such as @tradewithPhoton and @bonkbot_io. These bots are not only used frequently, but have also become one of the protocols with the highest fee income in the current crypto industry.
Despite this, there is still huge potential for growth in on-chain activity. Currently, only 5%-10% of cryptocurrency holders are actively participating in on-chain operations, which means there is a large untapped user base.
Mobile-friendly interfaces, such as TON’s mini-app, have already achieved significant results in terms of user growth. For example, @ton_blockchain’s mini-app has successfully attracted more than 50 million users. Therefore, the development of future protocols will increasingly rely on mechanisms to optimize the user experience (UX) and improve user retention.
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