2023 Crypto Assets Industry Review and 2024 Outlook

In 2023, the total market capitalization of the Crypto Assets market returned to 1.7 trillion USD, with a year-on-year growth of over 110%, marking that the industry has passed the cyclical winter. Several key events stood out during this year:

1. A major trading platform reached a settlement with U.S. regulators, pushing the compliance of Crypto Assets companies to become a mainstream trend.

2. The Bitcoin ecosystem leads a new model for the fair issuance of inscriptions, which is mainly attributed to the possibilities brought by the Taproot upgrade.

3. Ethereum's LSD/LSDFi defines "risk-free yield" in the industry, with ETH staking rewards considered similar to "Crypto Assets government bond yields."

4. Layer 2 networks are gradually taking over Ethereum ecosystem applications, with the total locked value of Layer 2 now reaching $2 billion, close to Ethereum's $2.9 billion.

5. A certain public chain has once again become a hot topic, and the DePIN and MEME projects within its ecosystem have regained market attention.

6. Real-world asset returns have become an important pillar of profitability for DeFi lending protocols, with a leading DeFi protocol generating 58.1% of its revenue from RWAs (mainly government bonds).

Looking ahead to 2024, the Crypto Assets industry may present the following ten major development trends:

1. After the approval of the Bitcoin spot ETF, it is expected to bring in more than $30 billion in incremental funds.

2. The total market value of the Bitcoin ecosystem's inscriptions may exceed $20 billion, among which the truly fairly issued top MEME coins may gain medium to long-term consensus.

3. The Bitcoin second layer network will develop rapidly, benefiting the growth of the Bitcoin ecological infrastructure.

4. The total locked value of Ethereum's second-layer network is expected to surpass that of the Ethereum mainnet, potentially reaching over $100 billion.

5. Although the scale of zero-knowledge rollups still struggles to compete with optimistic rollups, the modular combination of zero-knowledge classes in Ethereum's second layer components will tend to improve.

6. A certain cross-chain project is expected to issue coins in the first half of the year, which may trigger a surge in the interoperability track across all chains.

7. Parallel EVM has become a new narrative, which may drive certain public chains that support this technology to experience a second growth.

8. The market size of the decentralized physical infrastructure network ( DePIN ) may grow 10 times.

9. There may emerge popular autonomous worlds or full-chain games with strong social attributes.

10. The integration of AI and Crypto Assets in multiple application scenarios could produce star cases, such as using Bitcoin as an AI payment currency, or utilizing zero-knowledge machine learning for sensitive data training and model evaluation.

These trends reflect that the Crypto Assets industry is moving towards a more mature and diversified direction, while also continuously exploring the potential for integration with other emerging technologies.