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
Looking at the major developments in the industry this year, Bitcoin is undoubtedly the core narrative.
ETF and national reserves have successfully allowed Bitcoin to reach $100,000, officially announcing that Bitcoin has surpassed the connotation of cryptocurrency and has become a strong anti-inflation asset in the world. The value storage has been recognized, and BTC has begun to gradually move from digital gold to super-sovereign currency, marking the staged victory of this grand financial experiment that began with Satoshi Nakamoto. On the other hand, the Bitcoin ecosystem has been expanded this year. Although inscriptions, runes and even L2 are in a state of ice and fire from hot to dead, Bitcoin's diversified ecosystem has been initially formed. BTCFi, NFT, games, social and other applications continue to develop. Bitcoin DeFi TVL has soared from $300 million at the beginning of the year to $6.755 billion, an increase of more than 20 times throughout the year. Among them, Babylon has become the largest protocol on the Bitcoin chain. As of December 20, Babylon's TVL has reached $5.564 billion, accounting for 82.37% of the total. The broad BTCFI has performed even better this year. The share of Bitcoin spot ETFs has soared, and MicroStrategy, which was selected into the Nasdaq 100, has been imitated by many, all of which reflect the overwhelming success of Bitcoin in the Cefi field.
Back to the public chain field, Ethereum, the leader this year, is not having such a good time. Compared with the poor performance of other assets, the value capture and user activity have declined, and the narrative is not as good as before. Ethereum is suffering from the "theory of value". Although the Defi revival slogan, which has already formed a consensus, is loud, except for the TVL nesting doll craze set off by re-staking, it seems that only Aave has taken it all, and the actual investment is obviously insufficient. However, the emergence of the derivatives dark horse Hyperliquid at the end of the year not only revolutionized half of CEX's life, but also sounded the clarion call for DeFi to counterattack. On the other hand, after the upgrade of Dencun, Ethereum Layer 2 has accelerated its internal circulation and continued to eat up the main network share, so that the market has set off a big discussion on the Ethereum mechanism, and doubts have emerged in an endless stream. Even the rapid growth of Base has made the market have rumors that the future of Ethereum is Coinbase.
The strong rise of Solana is in sharp contrast. From the perspective of TVL, Ethereum's market share in the public chain has dropped from 58.38% at the beginning of this year to 55.59%, but Solana has jumped from no such person at the beginning of the year to the end of the year. 6.9%, becoming the second largest public chain after Ethereum. SOL has created a growth miracle, rising from $6 two years ago to $200 today. This year alone, it has also increased by more than 100%. From the perspective of recovery path, with the unique advantages of low cost and high efficiency, Solana aims at the core liquidity positioning, relying on Degen culture to rise to the well-deserved king of MEME, becoming this year's retail concentration camp. This year, Solana’s daily on-chain fees have exceeded Ethereum many times, and the growth of new developers has also surpassed Ethereum, which is a significant catching-up trend.
TON and SUI also stood out this year. Telegram, which has 900 million users, has single-handedly brought the blockchain gaming field to the forefront, opened up a new entrance for Web3 traffic, and strongly stimulated the market that had been silent for a long time before September. TON, which has been enjoying the shade under the big tree, has finally entered the fast lane of growth from the eve of the long-stopping dawn. According to Dune data, TON currently has more than 38 million users on the chain and a cumulative transaction volume of more than 2.1 billion US dollars. SUI completely convinced people with its growth. The Move language public chain has made rapid progress, with hardware development, protocol diversification, and airdrop introduction. The prospects seem bright. Compared with the price-driven SUI, the public chain Aptos in the same period, although its price performance is relatively weak, is more favored by traditional capital. This year, it has successfully established cooperation with BlackRock, Franklin Templeton, and Libre. Its compliance tone may bring it a new round of RWA and BTCFI cycles.
From the application perspective, MEME is the main driver of the market this year. In essence, the rise of MEME is a sign of the current market landscape change. VC tokens are not bought, and there is no target for excess liquidity, which is ultimately poured into sectors with stronger fairness and profit-seeking. In the meantime, the connotation of MEME is also constantly expanding, gradually developing from a single hype target to a typical representative of cultural finance, and "everything can be MEME" is happening in reality. Although in terms of market value, MEME accounts for less than 3% of the top 300 cryptocurrencies (excluding stablecoins), its trading volume continues to account for 6-7% of the share, and recently it has reached 11%, making it the main track with the most concentrated liquidity. According to Coingecko data, MEME has occupied 30.67% of investors' attention this year, ranking first among all tracks. Where the attention is, the money is naturally there, and this is indeed the case. Looking at this year's MEME, pre-sale fundraising, celebrity tokens, zoo wars, PolitFi and AI, all of them are top streamers in the circle.
In this context, the infrastructure around MEME continues to be consolidated, and the fair launch platform Pump.fun came into being. It not only reshaped the MEME landscape, but also successfully became one of the most profitable and successful applications this year. In November, Pump.fun became the "first Solana protocol to have a monthly revenue of more than $100 million in history." According to Dune data, as of December 22, pump.fun has accumulated revenue of more than $320 million, and the total number of deployed tokens is about 4.93 million.
Of course, the platform making money does not mean that retail investors make money. Considering the one in 100,000 chance of winning a gold dog, and only 3% of users can make more than $1,000 on Pump.fun, coupled with the increasingly prominent MEME institutionalization trend, from the user's perspective, no matter how fair it seems, it is difficult to avoid being cut or being cut. Perhaps it is precisely for this reason that adding fundamentals to MEME has become a new development model for projects. Most relatively long-term projects such as Desci and AIMEME have adopted this model, but from the current perspective, short-lived is still the mainstream, and the value of "running fast to live well" is still rising.
Affected by the US election, another god-level application has surfaced. Polymarket surpassed all gambling platforms on the market and became a hit in the prediction market with high accuracy. In October alone, the Polymarket website received 35 million visits, twice as many as popular gambling websites such as FanDuel, and the monthly trading volume also surged from US$40 million in April to US$2.5 billion. A wide range of users and real needs equal clear value applications. V God is full of praise for it. The only pity is that it has not achieved large-scale crypto user conversion. But the new fusion of media + gambling is undoubtedly coming slowly.
At the end of the year, the big model has already shown a white-hot competition pattern from technology to application. After a year of wandering in the Web3 hotspot, AI has finally counterattacked and become the dark horse of the year. MEME was the first to explode, and Truth Terminal quickly came with the golden dogs GOAT, ACT, and Fartcoin. The 100-fold myth reappeared, opening up the niche application craze of AI Agent. At present, almost all mainstream institutions are optimistic about AI Agent and believe that it is the second phenomenal track after Defi. However, as of now, the infrastructure in this field has not been perfected, and applications are mostly concentrated on the surface such as MEME and Bot. The deep integration of AI and blockchain is less, but new also means opportunities, and cyber-style speculation in coins remains to be seen.
On the other hand, from the perspective of the core driving institutions of this bull market, PayFi, which seamlessly connects traditional finance and Web3, will definitely bear the brunt. Stablecoins and RWA are typical representatives. Stablecoins have really come to the fore this year in the large-scale applications that everyone is looking forward to. Not only are they growing rapidly in the encryption field, but they are also beginning to occupy a place in the global payment and remittance market. Sub-Saharan Africa, Latin America and Eastern Europe began to bypass the traditional banking system and directly use stablecoins for transaction settlement, with the scale growing by more than 40% year-on-year. The current value of stablecoins in circulation exceeds 210 billion US dollars, significantly higher than the billions of dollars in 2020. On average, more than 20 million addresses conduct stablecoin transactions on the public blockchain every month. In the first half of 2024 alone, the number of stablecoins The settlement value alone exceeds US$2.6 trillion. From the perspective of new products, Ethena is the most eye-catching stablecoin project this year, and has further spawned the craze for interest-bearing stablecoins. It is also the main driving force for AAVE's revenue this year. RWA, on the other hand, was completely ignited after BlackRock officially announced its entry. RWA, which had a market capitalization of less than US$2 billion three years ago, has expanded to US$14 billion this year, with targets covering lending, real estate, stable coins, bonds, etc. fields.
In fact, PayFi's development is in line with the market. It is precisely because the internal market growth has reached a bottleneck and the mainstream institutional market as an incremental market is at the beginning of a new cycle that PayFi has entered a critical process at this stage in order to seek incremental space. It is worth noting that due to its integration with the traditional financial system, this field is also the most favored Web3 track by government agencies. For example, Hong Kong, China, has already listed stablecoins and RWA as important areas for development next year.
Of course, although it seems to be a positive trend, it cannot be denied that the crypto field has also experienced an extremely difficult stress test under the dual background of nearly 2 years of macro tightening and industry downturn. Innovative applications are difficult to show, internal disputes are intensifying, and restructuring and mergers and acquisitions are ongoing. The weakening of liquidity has led to the differentiation of paths in the crypto industry, forming a pattern of Bitcoin core inflow and continuous siphoning of other currencies. The cottage market has been in garbage time for most of this year. Shenyu's "no cottage in this bull market" has been repeatedly confirmed and falsified. It was not until the end of the year that it bottomed out and rebounded under the attention of Wall Street, and the cottage season kicked off. Judging from the current situation alone, path differentiation will continue in the short term and will intensify.
02 Outlook 2025: New cycle, new applications, new directions
Now, the New Year is about to ring. Looking ahead to 2025, as the Trump administration opens a new era of encryption, well-capitalized institutions are also eager to try. So far, more than 15 institutions have released market forecasts for next year.
In terms of price prediction, all institutions are optimistic about the value of Bitcoin, and 150,000-200,000 is the peak price range of Bitcoin considered by 6 institutions. Among them, VanEck and Dragonfly believe that the price will reach 150,000 US dollars next year, while Presto Research, Bitwise, and Bitcoin Suisse believe that it will reach 200,000 US dollars. If based on strategic reserves, Unstoppable Domains and Bitwise have proposed a judgment of 500,000 US dollars or even higher. As for other currencies, VanEck, Bitwise and Presto Research have given predictions that ETH will be around 6,000-7,000 US dollars, while Solana will be 500-750 US dollars, and SUI may also rise to 10 US dollars. Presto and Forbes believe that the total market value of cryptocurrencies will reach 7.5-8 trillion, and Bitcoin Suisse said that the total market value of altcoins will increase fivefold.
Price predictions are naturally supported. Almost all institutions believe that the US economy will have a soft landing next year, the macro environment will improve, and crypto regulation will be relaxed accordingly. More than 5 institutions have a positive view on Bitcoin strategic reserves, believing that at least one sovereign state and many listed companies will include Bitcoin in their reserves. All institutions believe that increased ETF inflows will become an objective fact.
From the perspective of specific tracks, stablecoins, tokenized assets and AI are the areas that institutions pay the most attention to. From the perspective of stablecoins, VanEck believes that the settlement volume of stablecoins will reach US$300 billion next year, while Bitwise said that with the acceleration of legislation, the acceleration of financial technology applications and global settlement, the scale of stablecoins will reach US$400 billion. Blockworks Mippo is more optimistic and gave an estimate of US$45 million. A16z also believes that companies will increasingly accept stablecoins as a payment method, and Coinbase also pointed out in the report that the next wave of real adoption of cryptocurrencies (killer applications) may come from stablecoins and payments.
In terms of tokenized assets, A16z, VanEck, Coinbase, Bitwise, Bitcoin Suisse and Framework are all optimistic about the track. A16z's forecast mentioned that as the cost of blockchain infrastructure decreases, the tokenization of non-traditional assets will become a new source of income, further promoting the decentralized economy. VanEck gave a specific number, believing that the value of tokenized securities exceeds US$50 billion, which coincides with Bitwise's forecast data. Messari gave a differentiated conclusion based on actual conditions. It believes that as interest rates fall, tokenized treasury bonds are expected to face resistance, but idle on-chain funds may gain more favor, and the focus may shift from traditional financial assets to on-chain opportunities.
In the AI direction, A16z, which has already made a heavy bet in the field of AI, is highly optimistic about the combination of AI and encryption. It believes that AI's autonomous agent capabilities will be greatly enhanced, artificial intelligence can have exclusive wallets to achieve subjective behavior, and decentralized autonomous chatbots will become the first truly autonomous high-value network entities. Coinbase also agrees with this, pointing out that artificial intelligence (AI) agents equipped with encrypted wallets will be the most cutting-edge field of disruption. VanEck said that there are more than 1 million on-chain activities of AI agents, and Robot Ventures also believes that the total market value of AI agent-related tokens will increase by at least 5 times. Although Dragonfly agrees that the token will rise sharply, it still holds a relatively conservative view on practical applications and believes that the application of the underlying protocol may be relatively limited.
Bitwise and Defiprime pointed out the core use scenarios. The former believes that AI Agent will lead the outbreak of Meme, while the latter said that DeFi is the deep integration scenario. Messari gave a more specific path, believing that the combination of AI and encryption has three major directions. The first is a new type of AI casino, such as Bittensor and Dynamic TAO. The second is that blockchain technology will be used in the field of small and professional model fine-tuning. The third is the combination of AI Agent and MEME.
In other aspects, the predictions of institutions vary. For example, YBB believes that the DeFi revival will be the main theme in 2025, Robot Ventures believes that there will be a wave of integration in the application chain and L2 tracks, Messari expects that almost all infrastructure protocols will adopt ZK technology in 2025, and the DEPIN industry will achieve revenues of 8 to less than 9 figures by 2025. VanEck and Bitcoin Suisse believe that NFT will return, etc. Due to too much text, I will not elaborate on them one by one here.
03 Conclusion: Where is the future for investors?
Although the arguments vary slightly and there are differences in the sub-sectors, it is not difficult to see that all institutions are optimistic and positive about 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 predicted that, from the perspective of price alone, the price of mainstream coins will inevitably rise, especially in Q1 next year, which will be a period of intensive policy benefits. The altcoin market will continue to differentiate. Affected by ETFs, altcoins that meet the compliance tone will be more likely to obtain capital inflows and narrative continuation, while other currencies will slowly shrink. If macro liquidity becomes tight, the risks of altcoins will become more prominent.
From the perspective of the industry, although the strong old public chain still occupies the leading advantage in the ecology, the impact from the new public chain is also inevitable. Ethereum's value capture and narrative will continue to ferment, but the optimistic thing is that the inflow of external funds may alleviate this, and the expansion of the technical level and the popularization of account abstraction will also become an important breakthrough for Ethereum in 25 years. Solana still has growth momentum under the discourse power of capital, but there is a hidden crisis in its high dependence on MEME, and the competition between Base and it will become increasingly fierce. In addition, it is expected that a number of new public chains will join the market competition, such as Monad and Berachain.
The development from infrastructure to applications is the general direction of future industrial development. Consumer-level applications will be the application focus in the next few years, and application chains and chain abstraction may become the main way to build DAPP. From the perspective of the track, the revival of DeFi has become a consensus, but at this stage it is still projected on AAVE. As for centralization, the focus is on the payment track. Hyperliquid and Ethena are still worthy of attention.
The speculative wave in MEME will most likely continue in the short term, but the pace will slow down significantly, especially under the influence of the copycat season. However, key directions such as Politifi still have a relatively long narrative to follow. Despite this, the infrastructure surrounding MEME is still expected to be improved, the user experience can be optimized, and the lowering of usage thresholds and the institutionalization of MEME are inevitable trends. It is worth noting that new ways of launching tokens will cause a new round of excitement at any time.
Since the incremental market comes from institutions, the tracks favored by institutions are expected to accelerate development, and stablecoins, AI, RWA, and DePin will still be the key narratives in the next round. In addition, 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 coming, and as an investor, the only option is to get rid of the old and welcome the new, discover the cycle, follow the cycle, and conduct in-depth research and participation.
