Author: DWF Ventures
Compiled by: Deep Tide TechFlow
2024 is a key turning point for cryptocurrency development—from the active participation of institutional investors to significant growth in on-chain activity, this year has showcased the industry's important progress.
Here is a review of the data from 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 sync—these data indicate the healthy development of the market and an increase in actual usage rates.
Inflow of ETFs and institutional funds
One of the biggest market drivers in 2024 is the Bitcoin ETF launched in January and the Ethereum ETF launched in July. These financial products not only lower the barriers for investors to enter the crypto market, but also reflect the rapidly growing demand for crypto assets from traditional investors.
It is estimated that the on-chain holdings of Bitcoin ETFs have grown to 1.1 million BTC, doubling since the beginning of the year.
Not only companies in the crypto field but also many traditional businesses are continually increasing their investments in Bitcoin and other crypto assets. For example, @MicroStrategy, led by Saylor, continues to accumulate Bitcoin, with its holdings now reaching 439,000 BTC.
The potential of stablecoins
Stablecoins are a core tool of the cryptocurrency ecosystem, enabling quick exchanges between assets and serving as an important indicator of new capital inflows.
In 2024, the total supply of stablecoins reached $187.5 billion, setting a new historical high. Meanwhile, the number of transactions and trading volume of stablecoins grew by 30%-40%.
It is worth mentioning that even amid market fluctuations, the trading volume of stablecoins remains at a high level—indicating that stablecoins have important practical applications beyond trading.
In terms of on-chain stablecoin trading volume, @trondao, @ethereum, @BNBCHAIN, and @solana continue to dominate. L2 networks like @arbitrum and @base are also showing 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.
The USDtb product recently launched by @BlackRock and @ethena_labs provides a safe and convenient way for traditional funds to enter DeFi. With the emergence of these regulated entry points, we may see more capital flowing into the on-chain ecosystem in the future.
The rise of the stablecoin market in Latin America and Africa
In the past year, the stablecoin market size in Latin America and Africa has grown by 40%-50%. There is a strong demand for currency hedging tools that do not require third-party trust in these regions, so the stablecoin market is rapidly developing here.
An increasing number of resources are flowing into these regions, such as the educational programs launched by @Tether_to and @circle's expansion plans for payment services in Latin America. Therefore, we expect this sector to maintain strong growth momentum through 2025.
Trends in on-chain activity
L2 networks (such as @base, @arbitrum, and @Optimism) and non-EVM chain @solana have performed outstandingly in net capital inflows this year. Users are more inclined to choose blockchain networks with lower transaction fees and faster speeds, 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 value locked (TVL) has also achieved 2-3 times growth. The memecoin craze triggered by @pumpdotfun has significantly driven up trading volume, with @RaydiumProtocol being one of the major beneficiaries, also boosting the development of other ecosystems. Additionally, this trend has given rise to the widespread use of trading bots (such as @tradewithPhoton and @bonkbot_io). These bots are not only frequently used but have also become some of the highest fee-generating protocols in the current crypto industry.
Nevertheless, there is still huge growth potential for 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 apps) have achieved significant results in user growth. For instance, the mini applications of @ton_blockchain have successfully attracted over 50 million users. Therefore, the development of protocols in the future will increasingly rely on optimizing user experience (UX) and mechanisms to improve user retention.
