2024 Crypto Market Review and 2025 Outlook

2024 is an important year in the history of encryption. Centered around the two core narratives of ETFs and the U.S. elections, the crypto industry has successfully broken through with Bitcoin as the main lever. Publicly listed companies, traditional financial institutions, and even national governments have flocked in, significantly enhancing mainstream acceptance and recognition. The regulatory environment is also moving towards a clearer and more relaxed path with the new government in power. Mainstream collisions, path differentiation, and regulatory evolution have become this year's industry main theme.

01 2024 Review: Bitcoin Reaches New Heights, Ethereum is Chased, MEME Becomes the Focus

Bitcoin has become the core narrative

Bitcoin is undoubtedly the core narrative of this year. ETFs and national reserves have pushed Bitcoin to 100,000 USD, officially declaring that Bitcoin transcends the concept of crypto and has become a robust global anti-inflation asset, with its value storage being recognized. BTC is gradually moving from digital gold towards a super-sovereign currency, marking a significant victory in this financial experiment that began with Satoshi Nakamoto.

The Bitcoin ecosystem has expanded this year. Although inscriptions, runes, and even L2 are experiencing a dramatic rise and fall, a diverse ecosystem for Bitcoin has initially formed. Applications such as BTCFi, NFTs, gaming, and social networking continue to develop, with Bitcoin DeFi TVL skyrocketing from 300 million USD at the beginning of the year to 6.7555 billion USD, an increase of over 20 times throughout the year. Babylon has become the largest protocol on the Bitcoin chain, with a TVL of 5.564 billion USD, accounting for 82.37% of the total. The broader BTCFi performance is impressive, with Bitcoin spot ETF shares soaring and the imitated MicroStrategy reflecting Bitcoin's success in the CeFi field.

Ethereum faces challenges

Ethereum has not had a good year. Compared to other assets, its performance has been poor, with a decline in value capture and user activity, and the narrative is not as strong as before. The "value theory" has made Ethereum suffer greatly. Although the slogan for the revival of DeFi is loud, apart from the TVL nesting craze triggered by re-staking, it seems that only Aave has shouldered everything, while actual investment is clearly insufficient. At the end of the year, the dark horse in derivatives, Hyperliquid, emerged, not only taking a significant toll on centralized exchanges but also sounding the horn for DeFi's counterattack.

After the Dencun upgrade, the Ethereum Layer 2 internal competition has accelerated, continuously eroding the mainnet's share, and the market has sparked a major discussion about the Ethereum mechanism, with questions arising one after another. The rapid growth of a certain well-known Layer 2 has led to rumors in the market that Ethereum's future belongs to a certain trading platform.

Solana's strong rise

The strong rise of Solana stands in stark contrast to Ethereum. In terms of TVL, Ethereum's market share in the public blockchain dropped from 58.38% at the beginning of the year to 55.59%, while Solana surged from being nonexistent at the start of the year to 6.9% by the end of the year, becoming the second largest public blockchain after Ethereum. SOL has created a growth miracle, skyrocketing from 6 dollars two years ago to 200 dollars now, with over 100% growth just this year.

Solana aims at core liquidity positioning, relying on Degen culture to become the undisputed king of MEME, making it the retail camp this year. Solana's daily on-chain fees have repeatedly exceeded those of Ethereum, and the growth of new developers has also surpassed Ethereum, with a significant trend of catching up.

TON and SUI have also broken through. A well-known social platform has single-handedly ignited the blockchain gaming sector, creating a new entry point for Web3 traffic, providing a strong stimulus to a market that had been dormant for a long time before September. TON has finally transitioned from the long-standing eve of dawn into a fast growth lane. Currently, TON has accumulated over 38 million on-chain users and a total transaction volume exceeding $2.1 billion. SUI, on the other hand, has completely won people over, with rapid advancements in the Move language public chain, hardware breakthroughs, diversified protocols, and airdrop introductions all working in tandem, presenting a bright future.

Although the public chain Aptos performed weakly in terms of price, it is more favored by traditional capital. This year, it successfully established partnerships with several well-known asset management institutions, and its compliance attributes may bring it new opportunities in the upcoming RWA and BTCFI cycles.

MEME has become a major driving force in the market.

MEME is the main driving force in the market this year. The rise of MEME marks a shift in the market landscape, with VC tokens losing their appeal, excess liquidity finding no targets, and ultimately being poured into sectors that are fairer and more profit-driven. The connotation of MEME is also continuously expanding, evolving from a single speculative target into a typical representative of cultural finance, and "everything can be MEME" is happening in reality.

Although in terms of market capitalization, MEME accounts for less than 3% of the top 300 cryptocurrencies ( excluding stablecoins ), its trading volume continues to occupy 6-7% share, recently surging to 11%, making it the main track with the most concentrated liquidity. MEME has accounted for 30.67% of investors' attention this year, ranking first among all tracks. Pre-sale fundraising, celebrity tokens, zoo battles, PolitFi, and AI are all top streams in the industry.

The infrastructure surrounding MEME continues to be solidified, and the fair launch platform Pump.fun has emerged, reshaping the MEME landscape and successfully becoming one of the most profitable and successful applications of the year. In November, Pump.fun became the "first Solana protocol in history to exceed $100 million in monthly revenue." As of December 22, Pump.fun's cumulative revenue has exceeded $320 million, with a total of approximately 4.93 million tokens deployed.

Making money on the platform does not mean retail investors make money. Considering the one in a hundred thousand chance of a golden dog, and only 3% of users on Pump.fun profit over $1000, coupled with the increasingly prominent institutionalization trend of MEME, from the user's perspective, regardless of how fair it seems, both being cut and cutting others are difficult to avoid. Adding fundamentals to MEME has also become a new development model for projects, with most relatively long-cycle projects like Desci and AIMEME adopting this model, but currently, fleeting opportunities remain mainstream, and the value of "running fast to live well" is still on the rise.

The rise of prediction markets

Influenced by the U.S. elections, another legendary application has emerged. A certain prediction market platform has surpassed all existing gambling platforms on the market, gaining widespread popularity with a high accuracy rate in the prediction market. In October alone, the platform's website received 35 million visits, double that of popular gambling sites, and its monthly trading volume surged from $40 million in April to $2.5 billion. A broad user base and real demand equal clear value applications, which is echoed by a well-known figure's praise for it. The only regret is that it has not achieved large-scale encryption user conversion. However, the new hybrid of media and gambling is undoubtedly on its way.

AI and Web3 combine to become a dark horse

At the end of the year, large models have transitioned from technology to application, seemingly presenting a heated competitive landscape. After a year of AI wandering around the Web3 hotspots, it has once again made a comeback to become the dark horse of the year. MEME has ignited the trend first, with Truth Terminal quickly bringing in Golden Dog GOAT, ACT, and Fartcoin, reviving the myth of hundredfold returns, and unveiling a wave of niche applications for AI Agents. Currently, almost all mainstream institutions are optimistic about AI Agents, considering them the second phenomenal track after DeFi.

As of now, the infrastructure in this field has not yet been perfected, and applications are mostly concentrated on superficial aspects like MEME and Bot, with little deep integration of AI and blockchain. However, new also means opportunity; we still need to wait and see for the cyber-style speculation in cryptocurrencies.

PayFi has become a core driving force

From the perspective of the core driving institutions of this bull market, the seamless connection between traditional finance and Web3, known as PayFi, will undoubtedly be at the forefront. Stablecoins and RWA are typical representatives in this regard. This year, stablecoins have shown the potential for large-scale application that many have been looking forward to, experiencing rapid growth not only in the encryption field but also starting to take a place in the global payment and remittance market. Regions such as Africa, Latin America, and Eastern Europe are beginning to bypass traditional banking systems, directly using stablecoins for transaction settlements, with a year-on-year growth of over 40%.

Currently, the value of circulating stablecoins exceeds 210 billion USD, significantly higher than the billions of USD in 2020, with an average of over 20 million addresses conducting stablecoin transactions on public blockchains each month. In just the first half of 2024, the settlement value of stablecoins has surpassed 2.6 trillion USD. Among new products, Ethena stands out as the most remarkable stablecoin project this year, further spurring the trend of interest-bearing stablecoins, which also serves as a major driver of revenue for a certain lending platform this year.

RWA was completely ignited after being officially announced by a giant asset management company; three years ago, the market value of RWA was less than $2 billion, and this year it has expanded to $14 billion, covering multiple fields including lending, real estate, stablecoins, and bonds.

PayFi's development is in line with market trends, as the internal market growth has hit a bottleneck. The mainstream institutional market, as an incremental growth area, is at the beginning of a new cycle. To seek incremental space, PayFi is currently entering a critical process. It is worth noting that due to its alignment with the traditional financial system, this field is also the most favored Web3 track by government agencies. For example, Hong Kong has listed stablecoins and RWA as important development areas for next year.

The market is facing challenges.

Despite appearing to be on the upswing, it cannot be denied that the crypto sector has undergone an exceptionally tough pressure test under the dual backdrop of nearly two years of macro tightening and an industry downturn. Innovative applications are hard to show, internal conflicts are intensifying, and continuous restructuring and mergers are taking place, with weakened liquidity giving rise to path differentiation in the crypto industry, forming a pattern where Bitcoin core inflows continuously siphon off other currencies. The altcoin market has been in a garbage time for most of this year, with "this bull market having no altcoins" being repeatedly confirmed and refuted, only to rebound at the end of the year under Wall Street's attention, marking the beginning of the altcoin season. From the current perspective, path differentiation will continue in the short term and is likely to intensify.

02 2025 Outlook: New Cycle, New Applications, New Directions

The New Year's bell is about to ring, looking forward to 2025, as the new government opens a new era of encryption, well-capitalized institutions are also eager to try. So far, more than 15 institutions have released market forecasts for next year.

price prediction

All institutions are optimistic about the value of Bitcoin, with 150,000 to 200,000 USD being the peak price range according to six institutions. Among them, a well-known institution believes the price will reach 150,000 USD next year, while several others believe it will reach 200,000 USD. Based on strategic reserves, some institutions have even proposed predictions of 500,000 USD or higher.

In terms of other cryptocurrencies, some institutions have predicted that ETH will be around 6000-7000 dollars, while SOL is expected to be between 500-750 dollars, and SUI could also rise to 10 dollars. Some institutions believe the total market capitalization of encryption will reach 7.5-8 trillion dollars, and others indicate that the total market capitalization of altcoins will increase by 5 times.

Macroeconomic Environment Forecast

Almost all institutions believe that the U.S. economy will experience a soft landing next year, with a better macro environment and a loosening of encryption regulations. More than five institutions hold a positive view on Bitcoin as a strategic reserve, believing that at least one sovereign nation and numerous listed companies will incorporate Bitcoin into their reserves. All institutions agree that increased ETF inflows will become an objective fact.

Key Track Prediction

Stablecoins, tokenized assets, and AI are the areas of greatest focus for institutions.

In terms of stablecoins, some institutions believe that the settlement volume will reach $300 billion next year, while others indicate that with accelerated legislation, faster application of financial technology, and global settlement promotion, the scale will reach $400 billion. One institution has provided an estimate of $450 billion. Some entities believe that enterprises will increasingly accept stablecoins as a payment method. Additionally, some institutions point out that the next wave of true adoption of cryptocurrency killer applications may come from stablecoins and payments.

In terms of tokenized assets, multiple institutions are optimistic about the sector. Some institutions predict that as