2024 Crypto Market Review and 2025 Outlook

2024 is a milestone year in the history of cryptocurrency. The approval of Bitcoin ETFs and the U.S. elections have become the two core narratives driving breakthroughs in the crypto industry. Public companies, traditional financial institutions, and even national governments have entered the market, significantly enhancing the mainstream acceptance and recognition of crypto assets. After the new government takes office, the regulatory environment is also evolving towards greater clarity and looseness. Mainstream integration, path differentiation, and regulatory evolution have become the main themes of the industry in 2024.

2024 Review: Bitcoin Reaches New Heights, Ethereum Chased, MEME Popularity Unabated

Looking at the development of the industry in 2024, Bitcoin is undoubtedly the core. Factors such as ETF approvals and national reserves have driven the price of Bitcoin to break through the $100,000 mark, marking Bitcoin's transcendence beyond the crypto market, becoming a globally recognized anti-inflation asset and a means of storing value. Bitcoin is gradually moving from digital gold to a super-sovereign currency.

The Bitcoin ecosystem has also expanded in 2024. Although applications like inscriptions and runes have risen and fallen, a diverse Bitcoin ecosystem has initially formed, covering areas such as DeFi, NFT, gaming, and social. The total locked value (TVL) of DeFi on the Bitcoin chain has surged from $300 million at the beginning of the year to $6.755 billion, increasing more than 20 times over the year. Among them, Babylon has become the largest protocol, with a TVL of $5.564 billion. The broader Bitcoin finance is performing brilliantly, with ETF shares skyrocketing and listed companies like MicroStrategy attracting much attention.

Ethereum faces challenges in 2024. Compared to other assets, Ethereum's performance is mediocre, with a decline in value capture and user activity, and its narrative strength is not as strong as before. Although there is a strong call for a DeFi revival, actual investment is insufficient aside from the increase in TVL caused by re-staking. However, by the end of the year, the derivatives project Hyperliquid has emerged, bringing new opportunities to DeFi. On the other hand, the Layer 2 ecosystem is developing rapidly, continuously eating into the mainnet's market share, raising doubts about Ethereum's mechanisms.

Solana has risen strongly in 2024, forming a stark contrast with Ethereum. Solana's TVL market share has surged from almost zero at the beginning of the year to 6.9%, making it the second-largest public chain after Ethereum. The price of SOL has skyrocketed from $6 two years ago to $200, with an increase of over 100% just in 2024. With its advantages of low cost and high efficiency, Solana has become a hub for MEME culture and retail investors. On-chain fees and developer growth have repeatedly surpassed Ethereum, showing a clear trend of catching up.

TON and SUI are also emerging strongly in 2024. Telegram is promoting TON as a new entry point for Web3 traffic, with over 38 million on-chain users and a trading volume exceeding $2.1 billion. SUI is attracting attention with its strong upward momentum, and the Move public chain ecosystem is expanding rapidly. Meanwhile, although Aptos has shown relatively weak price performance during the same period, it has gained the favor of traditional capital and established partnerships with institutions like BlackRock.

From an application perspective, MEME remains a major driving force in the market for 2024. The connotation of MEME continues to extend, evolving from a purely speculative label to a representative of cultural finance. Although its market capitalization share is not high, the trading volume of MEME consistently accounts for 6-7%, once surging to 11%, making it the most concentrated liquidity track. Themes such as presale fundraising, celebrity tokens, zoo battles, political finance, and AI MEME have taken turns in the spotlight.

The infrastructure surrounding MEME continues to improve, and the fair launch platform Pump.fun has emerged. The platform's revenue exceeded $100 million in November alone, making it one of the most profitable applications in the Solana ecosystem. However, the platform's profitability does not mean that retail investors will profit; considering the low probability of rare surges and the institutional trend of MEME, users still face high risks. To address this, some projects have begun to add fundamentals to MEME, but short-term speculation remains the mainstream.

Affected by the U.S. elections, the prediction market platform Polymarket has emerged as a dark horse. In October, the monthly visit count reached 35 million, double that of traditional betting websites, with trading volume skyrocketing from $40 million in April to $2.5 billion. A new integrated model of media and betting is gradually taking shape.

By the end of 2024, AI applications have once again become the focus. AI MEME has ignited the market, and tokens such as GOAT and ACT launched by Truth Terminal have created a myth of hundred-fold increases, sparking a craze for niche applications of AI Agent. Currently, the infrastructure in this field is still not perfect, and applications are concentrated on the surface, but institutions generally have a positive outlook on its prospects.

On the other hand, the PayFi sector, which connects traditional finance with Web3, has attracted significant attention. Stablecoins occupy a place in the global payment and remittance market, with a total circulation value exceeding $210 billion. New stablecoin projects like Ethena have shown impressive performance. After BlackRock entered the market, RWA was ignited, with its market value expanding from less than $2 billion three years ago to $14 billion, covering multiple fields such as lending, real estate, and bonds.

Despite an overall positive outlook, the crypto field has still undergone severe tests against the backdrop of macroeconomic tightening and industry downturns. Innovative applications are hard to come by, internal disputes are intensifying, and mergers and acquisitions are frequent. Weakening liquidity has led to a divergence in industry paths, resulting in Bitcoin siphoning off other currencies. The altcoin market was mostly sluggish until a rebound occurred at the end of the year under Wall Street's attention. This trend of divergence is expected to continue in the short term.

2025 Outlook: New Cycle, New Applications, New Directions

Looking ahead to 2025, with the new government opening a new era of encryption, well-capitalized institutions are eager to try. Several institutions have released their market forecasts for next year:

In terms of price, Bitcoin is generally viewed positively, with a high point range predicted by most institutions between $150,000 and $200,000. Some institutions even provide an optimistic expectation of $500,000. Ethereum is expected to be between $6,000 and $7,000, while Solana may reach $500 to $750. The total crypto market capitalization is expected to reach $7.5 to $8 trillion.

In terms of the macro environment, most institutions expect a soft landing for the U.S. economy and a relaxation of encryption regulation. At least one sovereign nation and multiple publicly listed companies will incorporate Bitcoin into their reserves. ETF inflows will continue to increase.

In terms of specific sectors, stablecoins, tokenized assets, and AI are the most关注.

• Stablecoins: The settlement volume is expected to reach 300-450 billion USD. Increased corporate adoption may become the next killer application.

• Tokenized assets: Non-traditional asset tokenization has become a new source of revenue, with a total value potentially exceeding $50 billion. However, the tokenization of traditional assets such as government bonds may face resistance.

• AI: AI agents will have exclusive wallets to achieve autonomous behavior. On-chain AI activities are expected to exceed 1 million, and the market value of related tokens may grow by more than 5 times. Major application scenarios include MEME, DeFi, and others.

Other predictions include: the revival of DeFi, L2 integration, the popularization of ZK technology, growth in DEPIN revenue, and the return of NFTs.

Overall, institutions are optimistic about 2025, expecting price increases, ecological expansion, and mainstream adoption to further advance.

For investors, the appreciation of mainstream cryptocurrencies seems to be a foregone conclusion, especially as Q1 2025 will welcome a series of favorable policies. The differentiation in the altcoin market continues, with coins that have strong compliance more likely to attract capital. In terms of industry, established public chains still hold an advantage, but the impact from new public chains is intensifying. The narrative around Ethereum continues to develop, but external funds may alleviate some pressure. Solana still has growth momentum, but there is a risk of over-reliance on MEME.

The application layer will become a key focus for future development, with consumer-level applications highly anticipated. The consensus on the revival of DeFi has been established, but AAVE remains dominant. The speculation trend around MEME is expected to continue, albeit at a slower pace, with the improvement of infrastructure being a major trend. Stablecoins, AI, and RWA are tracks favored by institutions that are expected to accelerate development. In addition, any tools and protocols that can enhance on-chain leverage may be in high demand.

As the new cycle is about to arrive, investors should gain insight into the cycle, follow the trends, conduct in-depth research, and actively participate to seize the opportunity.