2024 Crypto Market Review and 2025 Outlook

2024 is a milestone year in the history of cryptocurrency. Centered around the two core narratives of ETFs and the US elections, the crypto industry has made breakthrough developments, leveraging Bitcoin as the main tool. Public companies, traditional financial institutions, and even national governments have all entered this field, greatly enhancing the mainstream acceptance and recognition of crypto assets. 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 Review: Bitcoin Reaches New Heights, Ethereum Faces Competition, MEME Gains Attention

Looking at the major developments in the industry this year, Bitcoin is undoubtedly the core narrative.

ETFs and national reserves have driven Bitcoin to break through the $100,000 mark, marking Bitcoin's transcendence beyond the concept of cryptocurrencies, becoming a globally recognized anti-inflation asset and a means of value storage. Bitcoin is moving from digital gold towards a supranational currency, achieving a significant victory in the financial experiment initiated by Satoshi Nakamoto. On the other hand, the Bitcoin ecosystem has expanded this year. Although applications such as inscriptions and runes have seen fluctuations, a diverse Bitcoin ecosystem has initially formed, with applications in BTCFi, NFTs, gaming, social networking, and more continuing to develop. Bitcoin DeFi TVL surged from $300 million at the beginning of the year to $6.755 billion, growing over 20 times throughout the year. Babylon has become the largest protocol on the Bitcoin chain, with a TVL of $5.564 billion as of December 20, accounting for 82.37% of the total. The broader BTCFi has performed remarkably, with Bitcoin spot ETF shares skyrocketing, and MicroStrategy, included in the Nasdaq 100, being emulated, reflecting Bitcoin's overwhelming advantage in the CeFi field.

Ethereum has had a tough year. Compared to other assets, its performance has been poor, with a decline in value capture and user activity, and its narrative strength is not what it used to be. The "value theory" has made Ethereum suffer. Although the slogan for DeFi revival is loud, actual investment is clearly insufficient except for the TVL nesting frenzy caused by re-staking. The emergence of Hyperliquid, a dark horse in derivatives at the end of the year, has not only shaken the position of CEX but also sounded the counterattack horn for DeFi. On the other hand, after the Dencun upgrade, the internal competition of Ethereum Layer 2 has accelerated, continuously eroding the market share of the mainnet, triggering a large discussion about Ethereum's mechanism, with a lot of skepticism. The rapid growth of Base has even led to market rumors that the future of Ethereum is in the hands of Coinbase.

Solana's strong rise stands in stark contrast. From the perspective of TVL, Ethereum's market share in the public chain has dropped from 58.38% at the beginning of the year to 55.59%, while Solana has surged from nearly zero at the beginning of the year to 6.9% by the end of the year, becoming the second largest public chain after Ethereum. The price of SOL has skyrocketed from $6 two years ago to $200 now, with an increase of over 100% just this year. With its low cost and high efficiency advantages, Solana targets core liquidity positioning and has become the undisputed king of MEME, thanks to Degen culture, and has become a gathering place for retail investors this year. Solana's daily on-chain fees have repeatedly exceeded those of Ethereum, and the growth of new developers has also surpassed Ethereum, showing a clear trend of catching up.

TON and SUI have also stood out this year. The 900 million users of Telegram have driven the popularity of blockchain gaming, opening up a new entry point for Web3 traffic and providing strong stimulation to a market that had been silent for a long time before September. TON has finally entered a growth fast lane after a long period of stagnation. Currently, TON has accumulated over 38 million on-chain users and a cumulative trading volume exceeding $2.1 billion. SUI, on the other hand, has won purely through its price increase, with the Move language public chain developing rapidly, achieving hardware expansion, protocol diversification, and airdrop traffic generation simultaneously, showing promising prospects. During the same period, although the public chain Aptos has shown weaker price performance, it has been favored by traditional capital, establishing partnerships with BlackRock, Franklin Templeton, and Libre this year. Its compliance positioning may bring opportunities in the new round of RWA and BTCFI cycles.

From an application perspective, MEME is the main driving force in this year's market. The rise of MEME signifies a shift in the current market landscape, with VC tokens falling out of favor and excess liquidity moving towards sectors that are fairer and more profit-driven. The connotation of MEME is also continuously expanding, evolving from a purely speculative target to a typical representative of cultural finance, with "everything can be MEME" happening in reality. Although MEME accounts for less than 3% of the top 300 cryptocurrencies by market capitalization, excluding stablecoins (, its trading volume consistently accounts for 6-7% of the market share, reaching as high as 11% recently, making it the main track with the most concentrated liquidity. This year, MEME has captured 30.67% of investor attention, ranking first among all tracks. Pre-sale fundraising, celebrity tokens, zoo battles, PolitFi, and AI are all top trending topics within the industry.

In this context, the MEME infrastructure continues to improve, and 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 the year. In November, Pump.fun became "the first Solana protocol in history to earn over $100 million in a month." As of December 22, pump.fun's cumulative revenue exceeded $320 million, with a total of approximately 4.93 million tokens deployed.

However, platform profitability does not equate to retail investor profits. Considering the slim odds, and with only 3% of users making over $1000 in profit on Pump.fun, along with the increasingly apparent trend of MEME institutionalization, from a user perspective, no matter how fair it appears on the surface, the phenomenon of being "cut" (losing money) is still hard to avoid. Perhaps this is why adding fundamentals to MEME has become a new development model for projects. Most relatively long-cycle projects like Desci and AIMEME have adopted this model, but it seems that fleeting trends are still mainstream, and "quick in and out" operations still dominate.

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Affected by the U.S. elections, another god-tier application, Polymarket, has emerged. It stands out in the prediction market with high accuracy, surpassing all traditional betting platforms. In just October, the Polymarket website received 35 million visits, double that of popular betting sites like FanDuel, with monthly trading volume skyrocketing from $40 million in April to $2.5 billion. A broad user base and genuine demand equate to clear value applications, so it's no wonder that Vitalik Buterin speaks highly of it. The only regret is the failure to achieve large-scale conversion of crypto users. However, the new fusion model of media and betting is undoubtedly progressing steadily.

At the end of the year, large models transitioned from technology to application, presenting a heated competitive landscape. After a year of ups and downs in the AI space within Web3, it has once again become the dark horse of the year. MEME led the way, while Truth Terminal quickly rose with golden dog GOAT, ACT, and Fartcoin, bringing back the myth of hundredfold returns and igniting a frenzy for the niche application of AI Agent. Currently, almost all mainstream institutions are optimistic about AI Agent, believing it to be the second phenomenal track following DeFi. However, as of now, the infrastructure in this field is still not fully developed, and applications are largely concentrated on superficial aspects like MEME and Bot, with little deep integration of AI and blockchain. Nevertheless, emerging fields also signify opportunities, and the prospects of cyber-style coin trading are worth looking forward to.

On the other hand, from the perspective of the core driving forces of this bull market, the seamless integration of traditional finance and Web3 through PayFi is bound to be at the forefront. Stablecoins and RWA are typical representatives of this trend. This year, stablecoins have truly achieved large-scale application, not only growing rapidly in the crypto field but also securing a place in the global payment and remittance market. Sub-Saharan Africa, Latin America, and Eastern Europe have begun to bypass traditional banking systems, directly using stablecoins for transaction settlements, with a year-on-year growth of over 40%. The current circulation value of stablecoins exceeds $210 billion, far higher than the tens of billions in 2020, with an average of over 20 million addresses conducting stablecoin transactions on public blockchains monthly. In just the first half of 2024, the settlement value of stablecoins has surpassed $2.6 trillion. In terms of new products, Ethena is the most outstanding stablecoin project this year, further giving rise to a surge in interest-bearing stablecoins, and is also the main driver of AAVE's revenue this year. Meanwhile, the RWA sector was completely ignited after BlackRock announced its entry, with RWA's market capitalization expanding from less than $2 billion three years ago to $14 billion this year, covering various fields including lending, real estate, stablecoins, and bonds.

In fact, the development of PayFi is consistent with the pace of the market. It is precisely because the internal market growth has encountered bottlenecks, and the mainstream institutional market, as an increment, is at the beginning of a new cycle that PayFi has entered a critical process at this stage in search of growth space. It is worth noting that due to its integration 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 areas for development next year.

Despite the promising outlook, it cannot be denied that the crypto field has also undergone severe tests under the dual pressure of macroeconomic tightening and the industry's downturn cycle over the past two years. Innovative applications are difficult to emerge, internal conflicts are intensifying, and constant restructuring and mergers are occurring. The weakening liquidity has led to path differentiation in the crypto industry, forming a pattern where Bitcoin's core inflows continuously siphon off other cryptocurrencies. The altcoin market has been in a sluggish state for most of this year, until it rebounded sharply at the end of the year under Wall Street's attention, marking the beginning of the altcoin season. From the current perspective, path differentiation is likely to continue in the short term and may intensify.

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2025 Outlook: New Cycle, New Applications, New Directions

With the new government ushering in a new era of encryption, well-capitalized institutions are eager to try their hands. Currently, more than 15 institutions have released market forecasts for next year.

According to price predictions, all institutions are optimistic about Bitcoin's prospects, with a high point range of $150,000 to $200,000 predicted by six institutions. Among them, VanEck and Dragonfly believe the price will reach $150,000 next year, while Presto Research, Bitwise, and Bitcoin Suisse predict it will reach $200,000. Considering strategic reserve factors, Unstoppable Domains and Bitwise even proposed predictions of $500,000 or higher. For other cryptocurrencies, VanEck, Bitwise, and Presto Research provided predictions, estimating ETH to be around $6,000 to $7,000, Solana at $500 to $750, and SUI potentially rising to $10. Presto and Forbes expect the total market cap of the crypto market to reach $7.5 to $8 trillion, while Bitcoin Suisse indicated that the total market cap of altcoins will increase fivefold.

These price predictions are based on corresponding evidence. Almost all institutions expect that the U.S. economy will achieve a soft landing next year, the macro environment will improve, and crypto regulations will also be relaxed accordingly. More than five institutions hold a positive attitude towards Bitcoin's strategic reserves, believing that at least one sovereign nation and several listed companies will incorporate Bitcoin into their reserves. All institutions believe that an increase in ETF capital inflows will become a certain event.

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In terms of specific sectors, stablecoins, tokenized assets, and AI are the areas of greatest concern for institutions. Regarding stablecoins, VanEck expects the settlement volume to reach $300 billion next year, Bitwise predicts that with accelerated legislation, the rapid application of fintech, and global settlement promotion, the scale will reach $400 billion, while Blockworks Mippo is even more optimistic, giving an estimate of $450 billion. A16z believes that enterprises will more widely accept stablecoin payments, and Coinbase also points out that the next wave of real adoption of cryptocurrency ) killer applications ( may come from the stablecoin and payments sector.

In terms of tokenized assets, A16z, VanEck