Author: DWF Ventures; Translation: Golden Clean Xiaozou
2024 will be a key year for the crypto world—whether from institutional participation or the growth of on-chain activity.
Let's summarize this year with the following data.
1. Healthy Growth
With the total cryptocurrency market capitalization exceeding the historical peak of 2021, the market has rebounded significantly, reaching $3.7 trillion. Not only is liquidity increasing, but the number of users and trading volume are also rising, pointing to healthy growth and utilization.
2. ETF & Institutional Capital Inflows
The significant catalysts this year were the launch of the BTC ETF in January and the ETH ETF in July. In addition to lowering the barrier to entry, these inflows indicate a tremendous interest from traditional investors in crypto assets, and this interest continues to grow. The total on-chain Bitcoin ETF holdings have also grown to 1.1 million BTC, doubling from the beginning of the year.
Many large companies (including non-crypto companies) are also increasing their exposure to Bitcoin and other crypto assets. Saylor's MicroStrategy has continually doubled its Bitcoin holdings, which have now increased to 439,000 BTC.
3. Stablecoin Opportunities
Stablecoins are crucial to cryptocurrencies as they enable seamless entry and exit of assets and trading, and are often viewed as an indicator of new capital inflows. The total supply of stablecoins has reached 187.5 billion, setting a historical high. The number of transactions and trading volume have also grown by over 30-40%. Notably, despite a volatile market environment, trading volume has remained stable, indicating strong use cases beyond trading.
TRON DAO, Ethereum Foundation, BNB Chain, and Solana handle the highest on-chain transaction volumes for stablecoins. L2s like Arbitrum and Base are also experiencing huge growth in USDC transaction volume/user numbers. The activity of CEXs (centralized exchanges) has surpassed that of DEXs (decentralized exchanges), but this trend may be changing.
The recently launched BlackRock and Ethena Labs USDtb allows traditional funds to easily access DeFi while keeping funds secure. As access becomes regulated, we can expect to see more capital flowing on-chain.
In the past year, the stablecoin market in Latin America and Africa has grown by over 40-50%. In these regions, the stablecoin market is thriving due to a strong demand for trustless currency hedging. More investment is flowing into these areas, such as Tether launching educational programs and Circle expanding its payment services to Latin America. Therefore, we expect significant growth in this sector in the new year.
4. On-Chain Activity
L2s like Base, Arbitrum, and Optimism, along with non-EVM chains like Solana, have the highest net inflows as users are shifting to lower-cost, faster chains. The fastest-growing sectors are perpetual contracts and decentralized exchanges, with trading volume increasing by over 150% and TVL growing 2-3 times.
pump.fun ignited the meme coin craze, driving a significant increase in trading volume, with Raydium benefiting from this, creating a ripple effect on other ecosystems. This also led to the growth of trading bots, such as Photon and BONKbot, whose usage rates continue to rise, ranking among the highest revenue-generating protocols in the crypto space.
Considering that only 5-10% of cryptocurrency owners actively participate in on-chain transactions, there is still significant room for growth in on-chain activity.
Mobile-friendly interfaces, such as the TON mini app, have proven successful, attracting over 50 million users to the TON chain. Therefore, user experience and user retention mechanisms will be key to the protocol's advancement.
5. Summary
2024 is going to be an incredible year, and we believe that in 2025, the crypto market will experience strong tailwinds.
