Original source: DWF Ventures
Original text translated by: Shenchao TechFlow
2024 has become a key node in cryptocurrency development—from the active participation of institutional investors to significant growth in on-chain activity, this year showcases important progress in the industry.
Here is a review of the data for this year:
Continuation of growth in 2023
The market has rebounded strongly this year, with the total market capitalization surpassing the historical high (ATH) of 2021, reaching $3.7 trillion.
In addition to a significant increase in liquidity, the number of users and transaction volumes are also growing in tandem—these data indicate healthy market development and an increase in actual usage rates.
The influx of ETFs and institutional funds
One of the biggest market drivers of 2024 is the launch of the Bitcoin ETF in January and the Ethereum ETF in July. These financial products not only lower the barrier for investors to enter the crypto market but also reflect the rapidly growing 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 compared to the beginning of the year.
Not only companies in the crypto field, but many traditional enterprises are also continuously increasing their investments in Bitcoin and other crypto assets. For example, @MicroStrategy, led by Saylor, has continuously increased its Bitcoin holdings, which now stand at 439,000 BTC.
The potential of stablecoins
Stablecoins are a core tool in the cryptocurrency ecosystem, enabling rapid exchanges between assets and being viewed as important indicators of new capital inflows.
In 2024, the total supply of stablecoins reached $187.5 billion, setting a new historical high. Meanwhile, the number of stablecoin transactions and trading volumes increased by 30%-40%, respectively.
It is worth mentioning that even in the face of market volatility, the trading volume of stablecoins remains high—indicating that stablecoins have important practical applications beyond trading.
In terms of on-chain stablecoin transaction volume, @trondao, @ethereum, @BNBCHAIN, and @solana continue to dominate. L2 networks like @arbitrum and @base also show strong momentum in USDC trading volume and user growth.
Although trading activity on centralized exchanges (CEX) still leads decentralized exchanges (DEX) at present, this pattern is changing.
@BlackRock and @ethena_labs recently launched the USDtb product, providing a safe and convenient way for traditional funds to enter DeFi. With the emergence of these regulated entry points, we may see more funds flowing into the on-chain ecosystem in the future.
The rise of stablecoin markets in Latin America and Africa
Over the past year, the stablecoin market in Latin America and Africa has grown by 40%-50%. There is a strong demand in these regions for currency hedging tools that do not require third-party trust, leading to rapid growth of the stablecoin market.
An increasing number of resources are pouring into these regions, such as the educational programs launched by @Tether_to and @circle's payment service expansion plans in Latin America. Therefore, we expect this field to continue to maintain strong growth momentum in 2025.
Trends in on-chain activity
L2 networks (like @base, @arbitrum, and @Optimism) and non-EVM chain @solana have performed prominently in this year's net capital inflow. Users tend to choose blockchain networks with lower transaction fees and faster speeds, thereby attracting more users.
The fastest-growing sectors are perpetual contracts and decentralized exchanges (DEX). The trading volume in these two areas has increased by over 150%, and the total locked value (TVL) has also seen 2-3 times growth. The memecoin craze driven by @pumpdotfun has significantly boosted trading volumes, with @RaydiumProtocol being one of the main beneficiaries, also driving the development of other ecosystems. Additionally, this trend has led to widespread use of trading bots (like @tradewithPhoton and @bonkbot_io), which are not only frequently used but have also become one of the highest fee-earning protocols in the current crypto industry.
Nevertheless, on-chain activity still has huge growth potential. Currently, only 5%-10% of cryptocurrency holders are actively participating in on-chain operations, meaning there is a large untapped user base.
Mobile-friendly interfaces (like the TON mini app) have achieved significant results in user growth. For instance, the mini application of @ton_blockchain has successfully attracted over 50 million users. Therefore, the future development of protocols will increasingly rely on mechanisms that optimize user experience (UX) and improve user retention.
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