A Comprehensive Review of the Crypto Market from the Macroeconomic Environment to Vertical Tracks in the Second Half of 2024

1. Market Overview

1.1 crypto market fundamentals

In 2024, the cryptocurrency market performed strongly, with the total market value growing from $2.31 trillion to $3.33 trillion, an increase of 44.2%. This growth was attributed to favorable factors such as the approval of spot Bitcoin ETFs and Donald Trump's election as President of the United States. Bitcoin's dominance rose to 56.8%, and the assets under management for ETFs doubled. Ethereum ETFs performed modestly, while institutional investors continued to prefer Bitcoin. Solana had a bright performance, with a price increase of 29.3% and a net inflow of $2 billion into its ecosystem.

The share of the DeFi market has expanded, with the total locked value ( TVL ) doubling. The ratio of DEX/CEX trading volume has increased to 11.05%, with an annual trading volume reaching 2.67 trillion USD. Solana and Base have seen their DeFi TVL market shares grow to 7.17% and 3%, respectively.

The market capitalization of stablecoins increased by 26.8%, reaching a new high of over $205 billion. New entrants like Ethena further drove this trend. The potential approval of ETFs for assets like XRP and SOL in the future will have a positive impact.

1.2 Macroeconomic Environment and Politics

politics

Trump won the US election, and the Republican Party secured a majority in both houses of Congress. Trump's policies may bring uncertainty to the international situation. He was friendly towards encryption during his campaign, but actual policies still need to be observed.

Europe is affected by the Russia-Ukraine war, with the discourse power of right-wing parties strengthening. Regulation of the crypto market is becoming stricter, implementing the MiCA legislation.

The situation in the Middle East is volatile, with ongoing conflict between Israel and Hamas. Several countries in South America are advancing legislation on encryption.

economy

In 2024, global GDP growth is 2.6% and the inflation rate is 2.5%. The US economy is experiencing a soft landing, the Eurozone is growing slowly, and China is facing deflationary pressures.

The Indian stock market performed the best, rising by 18.5%. The US stock market increased by 15.2%, and the Nikkei index rose by 12.1%. The Chinese stock market fell by 2.3%.

U.S. tech stocks performed well, and the AI sector is developing rapidly. Japan's stock market hit a 30-year high, thanks to the depreciation of the yen and carry trades.

2. Bitcoin

2.1 Product and Protocol Design

Bitcoin Core implements V3 transactions, supporting zero-fee transaction forwarding. Discussions on soft fork proposals continue, including OP_CTV, OP_CAT, and others. The BitVM cross-chain bridge is progressing smoothly.

2.2 Layer 2 - Lightning Network

The number of Lightning Network channels is stable, with a total locked amount of about 5000 BTC. New features like BOLT12 enhance user experience. Some Layer 1 networks are developing Layer 2 solutions compatible with the Lightning Network.

2.3 Layer 2 - Side Chains

The performance of sidechain projects is uneven. BTCFi faces sustainability challenges and needs to build a robust ecosystem.

2.4 on-chain assets

BRC20, Runes and other meta-protocol assets have underperformed. The integration of RGB and the Lightning Network is progressing smoothly. Taproot Assets has received support from Tether.

2.5 BTCFi

The total locked value of BTCFi has increased. Staking, liquid staking, and other methods are popular. Projects like Babylon attract a large amount of TVL.

3. Ethereum

The performance of the ETH ETF was below expectations, and the ETH/BTC ratio has decreased. Layer 2 transaction fees are significantly lower than those of the Ethereum mainnet, with funds flowing towards projects like Base.

3.1 L2s

After the Dencun upgrade, rollup transaction fees have decreased by over 90%. Base, OP Mainnet, and Arbitrum have achieved net inflows of 3.5 billion, 2.1 billion, and 1.7 billion USD respectively. Layer 2 daily transaction volume has increased by more than 325%.

3.2 Re-staking

The re-staked TVL has decreased from 5.11 million ETH to 4.44 million ETH. Symbiotic TVL has increased more than 5 times, reaching 2.12 billion USD.

3.3 Ethereum Future Roadmap and EIP Proposals

The Pectra upgrade is expected to be completed in Q1 2025, including key EIPs such as expanded Blobs capacity and EOA smart contract functionality. The long-term roadmap has been reorganized, with the goal of introducing zero-knowledge proofs and post-quantum cryptography by 2029.

4. Solana

Solana price increased by 75%, and the SOL/ETH ratio improved. Competitiveness in DeFi, NFT, and payment sectors has strengthened. The market cap of stablecoins has grown over 3 times, reaching 5.1 billion USD. The number of new developers has surpassed Ethereum for the first time.

DePIN

Top projects like Helium and Render Network are performing strongly. New projects such as Hivemapper, Cudis, and Grass are attracting much attention.

Meme

Platforms like Pump.fun are driving a surge in Solana meme coin trading volume. Analysis tools like GMGN.ai are assisting investors.

PayFi

Solana Pay collaborates with Shopify and VISA to expand payment channels.

Looking to the future

Firedancer activation will further enhance network performance. The Solana plugin enhances the flexibility of token issuance. Factors such as ETF approval potential, stablecoin growth, and institutional adoption will drive ecosystem development.

5. Alt-L1s

Berachain

Innovative PoL consensus mechanism, compatible with EVM. TVL exceeded $1.5 billion before launch, and jumped to the eighth largest network after launch.

TON

The deep integration of Telegram brings competitive advantages. The daily active users have increased to 293,000, and the DeFi TVL has grown more than tenfold. However, the enthusiasm has declined after Q4.

Kaia

Merged from Klaytn and Finschia, integrating LINE and KakaoTalk. Launched the Kaia Wave plan to promote ecological development.

Move

The number of Move language developers has increased to over 1,500. Sui is leading Aptos in several metrics. Movement has launched the Move-based Ethereum scaling solution M2.

MegaETH

Innovative node specialization architecture aims to provide high throughput and low latency trading.

Monad

Optimize transaction execution and data storage through MonadBFT and MonadDB. The goal is to achieve 10,000 transactions per second.

6. Other Tracks

6.1 Meme

The Meme sector increased by 218%, becoming the best-performing area. Ethereum, Base, and Solana are the three most active public chains.

6.2 AI

AI + encryption applications are thriving, especially in the field of Agents. Projects like Virtuals Protocol are performing remarkably.

6.3 RWA

The RWA market value increased by 63%, reaching $13.67 billion. Private credit and U.S. Treasuries are the main asset classes.

6.4 trading robot

The market share of projects like Trojan and GMGN.AI is growing rapidly. Competition is intensifying, and the market landscape continues to change.

6.5 DeSci

Nearly 100 DeSci projects are distributed across fields such as biotechnology and space. They still face challenges such as a lack of funding.

6.6 DePIN

The total market value of DePIN has reached $50 billion, an increase of 176%. Sub-sectors such as energy networks, wireless networks, geospatial networks, and computing networks are worth paying attention to.

6.8 game

The daily active wallet count exceeded 7.6 million, a year-on-year increase of 5 times. opBNB, Ronin, and others have become the main gaming public chains. Financing difficulties still exist, but the industry remains resilient.