In its latest Q2 2024 investment report, well-known venture capital firm 1confirmation highlighted the growing influence of cryptocurrencies in traditional finance and government sectors. The report analyzes the success of Bitcoin and Ethereum ETFs, the impact of the political situation on the crypto industry, and the key technology trends that may drive market growth in the future.
Cryptocurrency integration: ETFs and political influence
2024 will undoubtedly be a banner year for the cryptocurrency industry. Cryptocurrencies have become an important part of traditional finance as Bitcoin and Ethereum ETFs find success on Wall Street. As of now, the Bitcoin ETF has assets under management (AUM) of over $78 billion, while the Ethereum ETF has $8 billion. In addition, as U.S. President Joe Biden’s anti-crypto policies are generally rejected, both parties have gradually come to realize that their anti-cryptocurrency stance is unsustainable. Crypto businesses have donated $119 million this election cycle, accounting for 48% of total corporate donations.
Not enough innovation: Duplicate use cases and new user challenges
While the cryptocurrency industry has made significant progress in policy and finance, the report notes that no new consumer use cases have emerged in the near term.
Recent popular products like meme coins on Solana and NFTs on Bitcoin are actually repetitions of past DeFi and NFT concepts. These products attract existing users and funding, but fail to bring in large numbers of new users. The report emphasizes that the core question that every crypto investor needs to think about now is: What kind of positive-sum product can truly attract more than one billion users into the crypto world?
Ethereum’s market capitalization will surpass Bitcoin’s in five years
1confirmation firmly believes that Ethereum’s market capitalization will surpass that of Bitcoin within the next five years. Although the current market capitalization of Bitcoin (approximately $1.2 trillion) is four times that of Ethereum ($321 billion), Ethereum has greater potential for practical applications and technological innovation in the blockchain field. The report believes that Ethereum is a decentralized network platform built by the world's best developers, and ETH is the "digital oil" that supports the operation of this ecosystem. As the market value of Ethereum is recognized by more institutions, its market value will grow rapidly.
Prediction Markets: Breakout Applications of 2024
The report pointed out that the prediction market will become the biggest highlight in 2024, and its market size may increase 100 times in the next few years. Polymarket is considered the best tool right now for following the US presidential election and other global events, and is the first crypto product that people use every day without even knowing it. This year, Polymarket’s trading volume has exceeded $1.1 billion, and this growth has relied on stablecoins on Ethereum. After the election, prediction markets will usher in greater development potential in fields such as news, culture, and sports.
The future prospects of DeFi, NFTs and emerging applications
The report predicts that decentralized finance (DeFi) and NFT will make a strong comeback, and new applications such as SocialFi will also emerge through application chains, second- and third-layer networks. Non-custodial products will continue to expand, allowing users to trade, lend, mint, and earn without relying on third parties. With the rise of second-layer networks and specialized application chains such as Base, the user experience and scalability of cryptocurrency will be significantly improved, further expanding the market size. The report emphasizes that tribalism among L1 chains will gradually fade, and good developers will build where they have the most value and control.
This article 1confirmation Q2 2024 Investment Report: Insufficient innovation, Ethereum’s market capitalization will surpass Bitcoin in five years first appeared on Chain News ABMedia.
