Taking stock of 8 states and 6 narrative trends of current encryption development

Author: @arndxt_xo

Compiled by: Vernacular Blockchain

In this article, I will conduct an in-depth analysis of 8 key states of the crypto industry, extract important insights into market development, and explore 6 trends that are shaping the future of the crypto industry.

We’ll discuss everything from the rise of AI agents, to memecoin’s resurgence, to Bitcoin’s consolidation and Solana’s explosive performance.

Next, we’ll break this down into 8 important observations and 6 eye-catching trends that reveal key changes in the market.

8 states of the crypto industry

The figure below is a brief summary of the catalog.

1) The AI ​​agent market is still small

While the market cap of Virtuals, an AI agent startup platform, has soared to about $4 billion, the total market cap of the AI ​​agents themselves is only about $1 billion. Although AI agents have been one of the hottest topics recently, the market still has plenty of room to grow as adoption and attention continue to rise.

2) The transaction volume of decentralized exchanges (DEX) and centralized exchanges (CEX) has surged

Perpetual DEXs are particularly popular, while an increasing number of projects are achieving multi-billion dollar valuations without relying on centralized exchanges for listing. This is a big step towards a truly decentralized trading ecosystem and shows the broader prospects of DeFi.

3) Decentralized Science (DeSci) has soared in attention

Interest in decentralized science (DeSci) has grown significantly, attracting more developers and researchers. Although some narratives (such as Liquid Heavy Collateral, BRC-20, Modular, L2 and RWA) have weakened, DeSci’s rapid rise may mean new opportunities for innovation.

4) Bitcoin supply continues to decline on trading platforms

The share of BTC (and ETH) on trading platforms continues to decline, indicating that large and long-term holders are increasing their positions. Reduced supply on trading platforms typically alleviates selling pressure, driving bullish momentum in the market, especially for Bitcoin.

5) Programmable Bitcoin via sBTC on Stacks

Stacks has launched sBTC, a 1:1 Bitcoin-backed asset designed to unlock approximately $2 trillion in Bitcoin liquidity for DeFi. Holders of sBTC can obtain basic returns (such as about 5% of Bitcoin returns) and can borrow them on platforms like Zest, with annualized returns of about 6%, and more investment opportunities are about to open. This provides a practical way to “make Bitcoin work” and may drive more Bitcoin-centric DeFi innovation.

6) Stablecoin supply exceeds record high of US$200 billion

The supply of stablecoins has increased from $125 billion in early 2024 to $200 billion. Stablecoins have surpassed Visa in annual trading volume, continuing to prove they are a trillion-dollar opportunity in the making.

7) Monthly Crypto Fund Growth

Although still below the peak in 2021, the amount of investment capital raised has increased significantly. Historically, capital inflows have typically occurred at market tops, and the current growth trend suggests that we are still in the early stages of the growth cycle and have not yet reached a period of extreme optimism in the market.

8) Extra: Solana’s rapid rise

In December 2024, Solana generated $43.1 billion in transaction fee revenue in a short period of time, surpassing all other L1s combined. Solana’s activity rivals Ethereum on several key metrics, and the upcoming Firedancer upgrade may further boost its scalability and network usage. It is becoming increasingly clear that Ethereum and Solana can (and likely will) coexist in a multi-chain future.

6 Narrative Trends

1) Bitcoin consolidation and potential bottom

Bitcoin has been trading within a range of $94,000 to $95,000, with frequent dips below $94,000 and touching $93,000, much to the dismay of traders. Currently, Bitcoin price is hovering near $97,000. The recent cluster around $94,000 suggests a possible bottom, but a retest of $88,000 to $92,000 remains possible. If Bitcoin rises, expect altcoins to perform better, similar to the 2021 bull run.

2) AI agents dominate the market narrative

Key performer: VIRTUAL, an AI agent startup platform on the Base platform, doubled its market cap from $2.5 billion to $5 billion in just 10 days. Key projects in the ecosystem: AIXBT: a Twitter-based proxy, grew from $300 million to $600 million. GAME: Nearly reaching a market value of US$400 million. AI16Z (based on Solana): From $1 billion to $2.5 billion. Other notable projects include $ZEREBRO ($800 million), $GRIFFAIN ($470 million), and $ARC ($400 million). AI agents are leading a new trend in innovation, attracting a lot of attention and investment.

3) The return of Memecoin and Murad Coin

Emerging star projects: $$SPX$$GIGA both hit record highs, $SPX exceeded US$1 billion, and $GIGA reached a market value of US$800 million. KEKIUS: After Elon Musk changed his Twitter avatar, the market value soared to US$400 million, but soon fell back by 75%. Memecoins like WIF, POPCAT, and FWOG are likely to see a resurgence.

4) Altcoin market highlights

Dinocoin: $$XRP (+15%) $$XLM (+35%) continues its strong performance. Fantom to Sonic Network: $$FTM is rebranding $$S, with a sharp drop to $0.66 before a rebound that could signal a potential long-term opportunity. CEXToken: BGB: Up 4x since December and now has a market cap of $7.5 billion. GT: Up 50% since December.

5) Noteworthy performers and new releases

Fuel Network ($FUEL): A new L2 network that shows great potential. MORPHO: Keep hitting new highs. Other new coins worth watching: $$PEAQ$$USUAL (strong), VANA, XION (bottoming).

6) Weird price fluctuations

UXLINK: Extremely volatile, with a sharp rise (+140%) followed by a rapid retracement. MOCA: After BN went public, it experienced a crazy pull-up and sell-off pattern.

3. Some new projects this week

Finally, here are some emerging projects. If you are interested, you can follow up and learn more about them by yourself.

@AlwaysBeenChoze

@marvellousdefi_

@Trong0322

@YashasEdu

@0xHvdes

@defi_ant_degen

@meekdonald_

@twindoges

@belizardd

@0xelonmoney

@0xAndrewMoh

@the_smart_ape

@andrewtalksdefi

@Foxi_xyz

@0xxbeacon

@Karamata2_2

@izu_crypt

@Mars_DeFi

@TheDeFiPlug

@cchungccc

@zordcrypt

@DeRonin_

@ahboyash

@Flowslikeosmo

@CryptoStreamHub

@stacy_muur

@crypthoem

@momochenming

@nihaovand

@0xcryptowizard

@Alvin0617

@0xWatell

@wsdxbz1

@Frogling68

@jackvi810