2024 Crypto Market Review and 2025 Outlook

2024 is an important year in the history of cryptocurrency. Focusing on two core topics: ETFs and the US elections, the crypto industry has made breakthroughs, leveraging Bitcoin as the primary tool. Publicly listed companies, traditional financial institutions, and even national governments have entered this field, significantly enhancing its mainstream acceptance and recognition. The regulatory environment has also become clearer and more lenient with the new government taking office. Mainstream integration, path differentiation, and regulatory evolution have become the main themes of the industry this year.

2024 Year in Review

Bitcoin is undoubtedly the core narrative of this year. The ETF and national reserves have propelled Bitcoin to break through the $100,000 barrier, marking its evolution beyond the crypto market, becoming a globally recognized anti-inflation asset and a means of value storage. Bitcoin is transitioning from digital gold to a super-sovereign currency. Meanwhile, the Bitcoin ecosystem is expanding, with continuous developments in DeFi, NFT, gaming, and social applications. The total locked value of Bitcoin DeFi (TVL) has grown over 20 times throughout the year, reaching $6.755 billion.

Ethereum faces challenges this year. Compared to other assets, it has performed poorly, with a decline in value capture and user activity, and its narrative strength has decreased. Although the call for a DeFi revival is loud, actual investment is clearly insufficient, except for the TVL nesting craze triggered by re-staking. However, the derivatives platform Hyperliquid has emerged strongly by the end of the year, bringing new hope to DeFi. On the other hand, the competition within Ethereum Layer 2 has accelerated, continuously eating into the market share of the mainnet, leading to a major discussion about Ethereum's mechanisms.

Solana has risen strongly this year, becoming the second largest public chain after Ethereum in terms of TVL. With its advantages of low cost and high efficiency, Solana targets core liquidity positioning, relying on Degen culture to become the king of MEME and a hub for retail investors. Solana's daily on-chain fees have repeatedly surpassed those of Ethereum, and the growth of new developers has also outpaced Ethereum, showing a clear trend of catching up.

TON and SUI have also stood out this year. Telegram has invigorated the blockchain gaming field, opening up a new entry point for Web3 traffic, and TON has finally entered a fast growth lane. SUI has completely impressed with its price increase, and the Move language public chain is making rapid progress. In contrast, Aptos has shown weaker price performance but is more favored by traditional capital, and may encounter opportunities in the new round of RWA and BTCFI cycles.

From an application perspective, MEME is the main driving force in the market this year. The rise of MEME marks a shift in the market landscape, where VC tokens are no longer favored, and excess liquidity flows toward sectors with stronger fairness and profit-seeking. The connotation of MEME is also constantly expanding, gradually evolving from a single speculative target to a representative of cultural finance. Although its market capitalization is not high, the trading volume of MEME continues to account for 6-7%, recently reaching as high as 11%, making it the main track with the most concentrated liquidity.

The infrastructure surrounding MEME is also continually improving. The fair launch platform Pump.fun has emerged, not only reshaping the MEME landscape but also becoming one of the most profitable and successful applications of this year. In November, Pump.fun became the "first Solana protocol in history to exceed $100 million in monthly revenue."

Affected by the U.S. elections, the prediction market Polymarket has emerged strongly. In October, Polymarket's website traffic reached 35 million visits, double that of popular betting sites, and its monthly trading volume skyrocketed from $40 million in April to $2.5 billion. A new fusion model of media and betting is starting to take shape.

At the end of the year, AI has once again become a dark horse in the Web3 field. MEME took the lead in igniting the market, and Truth Terminal brought a series of hot tokens, sparking a frenzy of AI Agent applications. Currently, almost all mainstream institutions are optimistic about AI Agents, believing they are another phenomenal track following DeFi.

PayFi, as a bridge connecting traditional finance and Web3, has also garnered significant attention. Stablecoins have truly achieved large-scale application this year, not only experiencing rapid growth in the encryption field but also securing a place in the global payments and remittances market. Currently, the circulating value of stablecoins exceeds $210 billion, and in the first half of 2024 alone, the settlement value of stablecoins has surpassed $2.6 trillion. RWA( real-world assets) were ignited after BlackRock announced its entry, with the scale expanding to $14 billion, covering multiple sectors such as lending, real estate, stablecoins, and bonds.

Despite the overall improvement, the crypto field has also faced difficult tests under the dual pressures of macro tightening and industry downturn. Innovative applications are hard to display, internal conflicts are intensifying, and restructuring and mergers and acquisitions are ongoing. Weakening liquidity has led to the differentiation of industry paths, forming a pattern where Bitcoin's core inflow continuously siphons other currencies. The altcoin market has been in a slump for most of this year, only rebounding towards the end of the year under Wall Street's attention.

Outlook for 2025

As the new government ushers in a new era of encryption, well-capitalized institutions are poised to take action. Many institutions hold an optimistic view of the market prospects for 2025:

• Price Prediction: Most institutions expect the price of Bitcoin to reach $150,000 to $200,000, with some even predicting it could exceed $500,000. ETH is expected to reach $6,000 to $7,000, and Solana is expected to rise to $500 to $750. The total market capitalization of encryption is expected to reach $7.5 to $8 trillion.

• Macroeconomic Environment: It is widely believed that the U.S. economy will achieve a soft landing, the macroeconomic environment is improving, and crypto regulation will tend to loosen. Several institutions predict that at least one sovereign nation and numerous listed companies will include Bitcoin in their reserves.

• Key focus areas: stablecoins, tokenized assets, and AI are the fields of greatest interest to institutions. The settlement volume of stablecoins is expected to reach $300-450 billion. The value of tokenized securities is expected to exceed $50 billion. The integration of AI and encryption will deepen further, with the total market value of AI-related tokens expected to grow by more than 5 times.

• Other directions: The revival of DeFi, application chains and L2 integration, the popularity of ZK technology, growth in the DEPIN industry, and the resurgence of NFTs are also viewed positively by various institutions.

Investor Outlook

• The prices of mainstream coins are expected to continue to rise, especially as the first quarter of 2025 will see a series of favorable policies.

• The crypto market will continue to differentiate, with projects that have strong compliance more likely to attract funding.

• Ethereum will face challenges in value capture and narrative, but external capital inflows may alleviate some pressure. Technical scalability and account abstraction will become important breakthroughs.

• Solana's growth momentum remains, but excessive reliance on MEME poses risks. New public chains like Monad and Berachain may join the market competition.

• Consumer-grade applications will be a key focus in the future, and application chains and chain abstraction may become the primary development methods.

• The consensus of DeFi revival has been formed, but it is still mainly concentrated on top projects like AAVE. The centralized sector, on the other hand, focuses on the payment track.

• Speculation on MEME will continue in the short term, but the pace will slow down. The infrastructure surrounding MEME is expected to improve further.

• The institutional-favored tracks such as stablecoins, AI, RWA, and DePin are expected to accelerate development.

• On-chain liquidity tools and protocols that can provide leverage may be favored.

A new cycle is about to arrive, and investors need to discover and adapt to the cycle. In-depth research and participation are necessary to seize opportunities.