2024 Crypto Market Review and 2025 Outlook

2024 is a milestone year in the history of cryptocurrency. Centered around two core events: ETFs and the U.S. elections, the crypto industry, led by Bitcoin, has successfully achieved breakthroughs. Publicly listed companies, traditional financial institutions, and even national governments have entered the market, significantly increasing the level of mainstream acceptance and recognition. The regulatory environment is also becoming clearer and more lenient with the new government taking office, with mainstream integration, path differentiation, and regulatory evolution becoming the main themes of the industry this year.

2024 Review: Bitcoin Hits New Highs, Ethereum Faces Challenges, MEME Popularity Remains Strong

Looking back at the major developments in the 2024 crypto market, Bitcoin is undoubtedly the core focus.

The approval of ETFs and the inclusion of them in the reserves by some countries have propelled Bitcoin to surpass the $100,000 mark. This signifies that Bitcoin has transcended the realm of cryptocurrencies, becoming a globally recognized anti-inflation asset and a means of value storage. Bitcoin is transitioning from digital gold to a super-sovereign currency, marking a phased success for Satoshi Nakamoto's financial experiment. On the other hand, the Bitcoin ecosystem is also expanding. Despite the stark contrast in applications like inscriptions and runes, a diversified ecosystem has begun to take shape. Applications in BTCFi, NFT, gaming, and social sectors continue to develop, with the total locked value of Bitcoin DeFi reaching (TVL), skyrocketing from $300 million at the beginning of the year to $6.755 billion, an increase of over 20 times throughout the year. Among them, Babylon has become the largest protocol, with a TVL of $5.564 billion, accounting for 82.37% of the total. The broader BTCFi performance is even more impressive, with a surge in Bitcoin ETF shares as companies like MicroStrategy follow suit, reflecting Bitcoin's overwhelming advantage in the CeFi space.

Ethereum is facing significant challenges this year. Compared to other assets, its performance has been poor, with a decline in value capture and user activity, and its narrative power is not as strong as before. The "value theory" has put Ethereum under great pressure. Despite the loud calls for a DeFi revival, actual investments are significantly lacking, apart from the re-staking that has sparked a TVL nesting frenzy. However, the emergence of the dark horse in derivatives, Hyperliquid, at the end of the year, has not only impacted centralized exchanges but also brought new opportunities to DeFi. On the other hand, after the Dencun upgrade, the competition within Layer 2 has intensified, continuously eating into the mainnet's share, triggering a major discussion in the market about Ethereum's mechanism. Doubts have arisen one after another, and there are even rumors that Ethereum's future is in the hands of Coinbase.

Solana has risen strongly, forming a stark contrast. In terms of TVL, Ethereum's market share in the public chain has decreased from 58.38% at the beginning of the year to 55.59%, while Solana has surged from negligible levels to 6.9%, becoming the second-largest public chain after Ethereum. The price of SOL has created miracles, skyrocketing from $6 two years ago to $200, with an increase of over 100% just this year. With its low-cost and high-efficiency advantages, Solana has locked in liquidity positioning, leveraging Degen culture to become the king of MEME, attracting a large number of retail investors. This year, Solana's average daily on-chain fees have repeatedly surpassed Ethereum, and the number 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 ignited the chain games with its 900 million users, opening a new entry point for Web3 traffic and injecting strong momentum into the long-dormant market. TON has finally exploded, with over 38 million cumulative on-chain users and a trading volume exceeding 2.1 billion USD. SUI, on the other hand, speaks entirely through its price. The Move language public chain is developing rapidly, with hardware expansion, protocol diversification, and airdrop traffic driving it forward, showing promising prospects. In contrast, the public chain Aptos, which underperformed in price during the same period, is more favored by traditional capital. This year, it established partnerships with institutions such as BlackRock, and its compliance tuning may provide opportunities in the new 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, with VC tokens falling out of favor and excess liquidity flowing into sectors with stronger fairness and profitability. The connotation of MEME continues to expand, evolving from a simple speculative development to a typical representative of cultural finance, and "everything can be MEME" is becoming a reality. Although its market capitalization share is not high, MEME's trading volume continues to account for 6-7% of the total, recently reaching as high as 11%, making it one of the most concentrated liquidity tracks. According to Coingecko data, MEME has captured 30.67% of investor attention this year, ranking first among all tracks. From presale fundraising to celebrity tokens, from zoo battles to PolitFi and AI, MEME projects repeatedly become the focus of the industry.

Against this backdrop, the MEME infrastructure continues to improve. The fair launch platform Pump.fun has emerged, reshaping the MEME landscape and becoming one of the most profitable and successful applications this year. In November, Pump.fun became the "first Solana protocol to generate over $100 million in monthly revenue." As of December 22, Pump.fun has accumulated over $320 million in revenue and has deployed approximately 4.93 million tokens.

However, platform profitability does not equate to retail investor gains. Considering the extremely low success probability and the increasingly apparent trend of institutionalization, the phenomenon of "cutting leeks" is difficult to avoid. Therefore, adding fundamentals to MEME has become a new trend for projects, with most long-cycle projects like Desci and AIMEME adopting this model. However, it currently seems that fleeting moments remain mainstream, and "quick in and quick out" is still the winning strategy.

Influenced by the U.S. elections, the prediction market platform Polymarket has emerged strongly. In October, the Polymarket website had 35 million visits, double that of mainstream betting sites, with monthly trading volume surging from $40 million in April to $2.5 billion. Its wide user base and real demand highlight its value, and Vitalik Buterin has praised it highly. Although it has not achieved large-scale conversion of crypto users, the new fusion model of media and betting is starting to take shape.

At the end of the year, AI has shifted from technological breakthroughs to practical applications, entering a fiercely competitive phase. After a year of silence in the Web3 spotlight, AI has once again become the dark horse of the year. MEME was the first to ignite interest, while Truth Terminal introduced hundredfold coins like GOAT, ACT, and Fartcoin, sparking a wave of niche applications for AI Agents. Currently, mainstream institutions generally have a positive outlook on AI Agents, believing they are likely to become the second phenomenon after DeFi. Although the infrastructure in this field is not yet fully developed, applications are mostly concentrated on superficial aspects like MEME and Bots, with limited deep integration of AI and blockchain. However, emerging fields often contain opportunities, and the cyber speculation model for cryptocurrencies is worth anticipating.

On the other hand, as the core driving force of this bull market, PayFi, which connects traditional finance and Web3, has attracted much attention. Stablecoins and RWA are typical representatives. Stablecoins have rapidly grown in the crypto field this year and have secured a place in the global payment and remittance markets. Regions such as Africa, Latin America, and Eastern Europe are beginning to bypass traditional banking systems and directly adopt stablecoins for settlement, with a year-on-year growth of over 40%. Currently, the circulating value of stablecoins exceeds 210 billion USD, significantly higher than levels in 2020. An average of over 20 million addresses transact stablecoins on public chains each month, and in just the first half of 2024, the settlement value of stablecoins has surpassed 2.6 trillion USD. In terms of new products, Ethena has performed the best, sparking a surge in yield-bearing stablecoins, which has also become a major source of income for AAVE this year. RWA has rapidly gained momentum after BlackRock announced its entry, with its scale expanding from less than 2 billion USD three years ago to 14 billion USD, covering various fields such as lending, real estate, stablecoins, and bonds.

In fact, the development of PayFi is in line with the pace of the market. Due to bottlenecks in internal market growth, the mainstream institutional market, as an increment, is at the starting point of a new cycle, and PayFi is entering a critical stage in search of growth space. It is worth noting that, due to its connection with the traditional financial system, this field is also the most favored Web3 track by government agencies, such as Hong Kong, which has listed stablecoins and RWA as key development focuses for next year.

Despite the optimistic outlook, it is undeniable that the crypto field has undergone severe tests under the dual pressure of macroeconomic tightening and industry downturn over the past two years. Innovative applications have struggled to break through, internal disputes have intensified, and restructuring and mergers and acquisitions have continued. The weakening liquidity has led to a divergence in the crypto industry's path, forming a pattern where Bitcoin core attracts and absorbs other cryptocurrencies. The altcoin market has been in a sluggish state for most of this year, with the narrative "this bull market has no altcoins" repeatedly validated, until it rebounded at the end of the year under Wall Street's attention, marking the start of the altcoin season. From the current perspective, the path divergence is expected to continue in the short term and may intensify.

2025 Outlook: New Cycle, New Applications, New Directions

As the new government ushers in a new era of encryption, well-funded institutions are eager to participate. Currently, more than 15 institutions have released market forecasts for 2025.

In terms of price predictions, institutions are generally optimistic about Bitcoin. $150,000 to $200,000 is the high point range that six institutions believe Bitcoin will reach. VanEck and Dragonfly expect it to reach $150,000, while Presto Research, Bitwise, and Bitcoin Suisse anticipate it will hit $200,000. If strategic reserve factors are considered, Unstoppable Domains and Bitwise even propose a target of $500,000 or higher. For other cryptocurrencies, VanEck, Bitwise, and Presto Research expect ETH to reach $6,000 to $7,000, Solana to reach $500 to $750, and SUI may rise to $10. Presto and Forbes predict the total market cap of the crypto market will reach $7.5 to $8 trillion, while Bitcoin Suisse believes the total market cap of altcoins will grow fivefold.

There is supporting logic behind these predictions. Most institutions believe that the U.S. economy will achieve a soft landing in 2025, with an improving macro environment and a subsequent relaxation of crypto regulation. Over five institutions are optimistic about Bitcoin as a strategic reserve, expecting at least one sovereign nation and several listed companies to include Bitcoin in their reserves. All institutions agree that the inflow of ETF funds is an inevitable trend.

In specific sectors, stablecoins, tokenized assets, and AI are the most favored by institutions. Regarding stablecoins, VanEck expects the settlement volume to reach $300 billion by 2025, Bitwise anticipates a scale of $400 billion, and Blockworks Mippo is even more optimistic, providing an estimate of $450 billion. A16z believes that enterprises will increasingly accept stablecoin payments, and Coinbase points out that the next killer application for cryptocurrency may come from stablecoins and the payments sector.

In terms of tokenized assets, A16z, VanEck, Coinbase, Bitwise, Bitcoin Suisse, and Framework all express optimism. A16z predicts that as the cost of blockchain infrastructure decreases, tokenization of non-traditional assets will become a new source of revenue. VanEck and Bitwise expect the value of tokenized securities to exceed $50 billion. Messari believes that falling interest rates may hinder the development of tokenized government bonds, but idle on-chain funds may receive more favor, with the focus potentially shifting from traditional financial assets to on-chain opportunities.

In terms of AI, A16z remains highly optimistic about the integration of AI and encryption, expecting that the autonomous agent capabilities of AI will be significantly enhanced, with dedicated wallets enabling主体行为. Coinbase also agrees with this view, believing that AI agents equipped with encryption wallets will be the most disruptive frontier. VanEck predicts that on-chain activities of AI agents will exceed 1 million, while Robot Ventures expects the total market capitalization of AI-related tokens to grow at least 5 times. Dragonfly agrees that tokens will surge, but holds a relatively conservative view on practical applications, believing that the application of underlying protocols may be limited. Bitwise and Defiprime point out core use cases; the former believes that AI Agents will lead the Meme explosion, while the latter is optimistic about the deep integration with DeFi. Messari outlines three development directions: new types of AI casinos, blockchain for fine-tuning small specialized models, and the combination of AI Agents and MEME.

![Looking back at the gains and losses in the crypto market of 2024, where is the road heading in 2025?](