2024 Crypto Market Review and 2025 Outlook

The year 2024 is a milestone year for the encryption industry. ETFs and the U.S. elections have become the two core narratives, with Bitcoin dominating, and the encryption industry has successfully achieved breakthroughs. Publicly traded companies, traditional financial institutions, and even national governments have entered this field, significantly enhancing the mainstreaming and recognition of crypto assets. The regulatory environment has also become clearer and more relaxed with the new government coming to power. Mainstream integration, path differentiation, and regulatory evolution have become this year's main themes in the industry.

2024 Review

Bitcoin is undoubtedly the core narrative this year. The ETF and national reserves have driven Bitcoin to break through $100,000, marking its transcendence beyond the crypto market connotation, becoming a globally recognized anti-inflation asset and store of value. The Bitcoin ecosystem has also been significantly expanded, including inscriptions, runes, and Layer 2, initially forming a diverse ecosystem. The total locked value in Bitcoin DeFi has grown over 20 times throughout the year, reaching $6.7555 billion. The broader Bitcoin finance performs impressively, with Bitcoin ETF shares skyrocketing, and MicroStrategy, which entered the NASDAQ 100 index, being emulated by many.

Ethereum has had a poor year, with asset performance lacking and declines in value capture and user activity. Aside from the TVL frenzy sparked by re-staking, the call for a DeFi revival is loud but actual investment is insufficient. Towards the end of the year, the derivatives project Hyperliquid emerged as a dark horse, bringing hope to DeFi. The competition within Ethereum's Layer 2 has intensified, continuously eating into the mainnet's share, raising questions about the mechanisms of Ethereum in the market.

Solana has risen strongly, forming a sharp contrast. From being marginalized at the beginning of the year to becoming the second largest public chain by the end of the year, it has reached a market share of 6.9%. The price of SOL has increased from 6 dollars to 200 dollars within two years, with an increase of over 100% this year. Solana, leveraging its low cost and high efficiency advantages, targets core liquidity positioning and has become the king of MEME, relying on Degen culture.

TON and SUI have also stood out this year. Telegram has ignited the blockchain gaming sector, opening a new gateway for Web3 traffic. TON has accumulated over 38 million on-chain users and a trading volume exceeding $2.1 billion. SUI has completely triumphed with its growth rate, and the Move language public chain is developing rapidly. Although Aptos's price performance is relatively weak, it is more favored by traditional capital and has established partnerships with multiple institutions.

MEME has become a major driving force in the market this year, reflecting a shift in market dynamics. MEME has evolved from a singular speculative asset to a representative of cultural finance, accounting for 6-7% of trading volume. Infrastructure for MEME, such as Pump.fun, is continuously being improved, reshaping the MEME landscape. Considering the institutional trend of MEME, adding fundamentals to MEME represents a new development model for projects.

Affected by the U.S. elections, the prediction market Polymarket has emerged as a dark horse, with trading volume skyrocketing to $2.5 billion. AI has made a comeback at the end of the year, with MEME leading the way in igniting the AI Agent craze. Almost all mainstream institutions are optimistic about AI Agents, believing they have the potential to become the second phenomenon after DeFi.

PayFi has been thriving this year. Stablecoins occupy a place in the global payment and remittance market, with a circulation scale exceeding $210 billion. RWA has been ignited by the entry of BlackRock, expanding its scale to $14 billion. PayFi has become a favored Web3 track for government agencies.

Despite appearing to improve, the encryption field has also undergone a difficult stress test. Innovative applications are hard to showcase, internal disputes are intensifying, and restructuring and mergers are ongoing. Weakening liquidity has led to path differentiation, forming a pattern where Bitcoin's core is inflowing while siphoning off other cryptocurrencies. The altcoin market remained sluggish for over half a year, only rebounding at the end of the year under Wall Street's attention.

2025 Outlook

Looking ahead to 2025, with the improvement of the policy environment, well-capitalized institutions are eager to try. Several institutions are optimistic about the price of Bitcoin, expecting it to reach $150,000 to $200,000. ETH is expected to be around $6,000 to $7,000, SOL between $500 to $750, and SUI may rise to $10. The total market capitalization of the crypto market is expected to reach $7.5 to $8 trillion.

Stablecoins, tokenized assets, and AI are the areas of greatest concern for institutions. The settlement volume of stablecoins is expected to reach $300-450 billion. The value of tokenized securities may exceed $50 billion. The combination of AI and encryption is widely optimistic, with the total market capitalization of AI-related tokens expected to grow more than five times.

The revival of DeFi, integration of application chains, popularization of ZK technology, and the development of DEPIN are also areas of interest for institutions. The NFT market is expected to make a comeback.

Overall, the crypto market is expected to continue its upward trend in 2025. The price increase of mainstream coins seems to be a fait accompli, while the altcoin market will continue to show differentiation. Strong old public chains occupy ecological advantages, but the impact of new public chains should not be underestimated. Consumer-level applications will become a focus, and application chains and chain abstraction may become the main ways to build DAPPs. The consensus on the revival of DeFi has been reached, but attention is still needed on specific implementations. The speculative wave around MEME may continue but at a slower pace, and the infrastructure surrounding MEME is still expected to improve. Stablecoins, AI, RWA, and DePin remain key narrative directions.

For investors, seizing opportunities in the new cycle, aligning with trends, and conducting in-depth research participation is a wise choice.