DWF Ventures: Review of the crypto market in 2024 from 4 major dimensions

Author: DWF Ventures; Translation: golden wipe xiaozou

2024 is shaping up to be a pivotal year for the crypto world – both in terms of institutional participation and growth in on-chain activity.

Let's summarize the year with the following data.

1. Healthy growth

The market rebounded sharply as total crypto market capitalization surpassed 2021’s all-time high, reaching $3.7 trillion. Not only is liquidity increasing, but the number of users and transaction volume are also rising respectively, pointing to healthy growth and utilization.

2. ETF & institutional fund inflows

The bigger catalysts this year are the BTC ETF launched in January and the ETH ETF launched in July. In addition to lower barriers to entry, these inflows demonstrate that traditional investors have huge and growing interest in cryptoassets. The total on-chain holdings of Bitcoin ETFs have also grown to 1.1 million BTC, which is triple the amount at the beginning of this year.

Many large companies, including non-crypto ones, are also increasing their exposure to Bitcoin and other crypto assets. Saylor’s MicroStrategy’s Bitcoin holdings continue to double, with current holdings increasing to 439,000 BTC.

3. Stablecoin opportunities

Stablecoins are crucial to cryptocurrencies as they enable seamless movement in and out of assets and are often seen as an indicator of new money inflows. The total supply of stablecoins has reached 187.5 billion, a new all-time high. The number of transactions and transaction volume have also increased by more than 30-40%. Notably, trading volumes have remained stable despite volatile market conditions, indicating strong use cases beyond trading.

TRON DAO, Ethereum Foundation, BNB Chain, and Solana handle the stablecoins with the largest transaction volume on the chain. L2s like Arbitrum and Base are also experiencing huge growth in USDC trading volume/number of users. CEXs (centralized exchanges) are more active than DEXs (decentralized exchanges), but that trend may be changing.

The recent launch of BlackRock and Ethena Labs USDtb allows traditional funds to easily access DeFi while keeping their funds safe. As access becomes regulated, we could see more money flow into the chain.

The stablecoin market size in Latin America and Africa has grown by more than 40-50% in the past year. In these regions, stablecoin markets are booming due to strong demand for trustless currency hedging. More investment is flowing to these regions, such as Tether launching an education program and Circle expanding its payments business into Latin America. Therefore, we expect significant growth in this segment as well in the new year.

4. On-chain activities

L2 chains such as Base, Arbitrum, and Optimism, as well as non-EVM chains such as Solana, have the highest net inflows as users are switching to lower-cost and faster chains. The fastest-growing areas are perpetual contracts and decentralized exchanges, with trading volume increasing by more than 150% and TVL increasing by 2-3 times.

pump.fun ignited the meme coin craze and drove a huge increase in transaction volume, which benefited Raydium and had a trickle-down effect on the rest of the ecosystem. This has also led to the growth of trading bots, such as Photon and BONKbot, which continue to grow in usage and rank among the highest fee- generating protocols in the crypto space.

Considering that only 5-10% of cryptocurrency owners actively participate in on-chain transactions, there is still huge room for growth in on-chain activity.

Mobile-friendly interfaces such as the TON mini app have proven successful, attracting more than 50 million users to the TON chain. Therefore, user experience and user retention mechanisms will be key to the protocol moving forward.

5. Summary

2024 is an incredible year, and we believe that 2025 will bring strong tailwinds to the crypto market.