Crypto market review in 2024 and outlook for 2025

2024 is an important year in the history of cryptocurrency. Bitcoin ETFs and the U.S. election became the core drivers of the market, and the crypto industry achieved breakthrough development. Mainstream institutions, traditional financial companies, and even governments have entered the market, and the recognition of crypto assets has increased significantly. The regulatory environment has also become clearer and more relaxed with the arrival of a new government. Mainstream convergence, path differentiation and regulatory evolution have become the main themes of the industry this year.

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2024 Market Review

Bitcoin is undoubtedly a core asset in 2024. The launch of ETFs and the need for national reserves pushed the price of Bitcoin above $100,000, marking the official transcendence of Bitcoin as a cryptocurrency and a globally recognized inflation-resistant asset and store of value. Bitcoin is moving from digital gold to a super-sovereign currency, and this financial experiment that began with Satoshi Nakamoto has achieved a phased victory.

The Bitcoin ecosystem has also been expanded this year. While the performance of inscriptions, runes, and L2 projects has been uneven, a diversified ecosystem has taken shape, covering applications such as DeFi, NFTs, gaming, and social networking. The total lock-up volume of Bitcoin DeFi soared from $300 million at the beginning of the year to $6.755 billion, an increase of more than 20 times for the year. Among them, Babylon became the largest protocol, with a lock-up volume of $5.564 billion, accounting for 82.37%. Bitcoin finance in the broad sense has also performed well in the traditional financial sector, with a surge in shares of Bitcoin ETFs and MicroStrategy, which is included in the Nasdaq 100, being widely emulated.

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Ethereum is facing a lot of challenges this year. Compared with other assets, Ethereum’s value capture and user activity have declined, and the narrative power is not as good as before. Despite the strong calls for a DeFi revival, there has been a lack of actual investment other than the TVL growth sparked by restaking. However, the sudden emergence of derivatives protocol Hyperliquid at the end of the year has brought new opportunities to DeFi. At the same time, the continuous development of the Ethereum Layer 2 ecosystem has sparked market discussions on Ethereum’s mechanism.

Solana has risen strongly this year, jumping from obscurity at the beginning of the year to the second largest public chain. The price of SOL has risen from $6 two years ago to $200, and has risen by more than 100% this year alone. With the advantages of low cost and high performance, Solana has become a liquidity center and a gathering place for retail investors, surpassing Ethereum’s average daily on-chain fees many times.

TON and SUI also stood out this year. Telegram helps TON bring fire chain to the track and open up a new entrance to Web3 traffic. SUI attracts attention with its Move language and price performance. In contrast, although the price performance of Aptos, which is also a Move public chain, is weaker, it is more favored by traditional capital and may have development opportunities in areas such as RWA.

MEME emerged as one of the main drivers of the market this year. The rise of MEMEs reflects a shift in the market landscape, with excess liquidity flocking to more fair and profit-seeking sectors. The connotation of MEME is also constantly expanding, from simple speculation to cultural and financial representatives. Although the proportion of market capitalization is not high, the trading volume of MEME continues to account for 6-7%, once reaching 11%, becoming one of the most liquid tracks. There are endless MEME projects with pre-sale fundraising, celebrity tokens, zoo wars, political finance, and AI themes.

The infrastructure around MEMEs is also improving. The Fair Launch platform Pump.fun sprung up as one of the most profitable and successful apps of the year. In November, Pump.fun became “the first Solana protocol to surpass $100 million in monthly revenue.” As of December 22, Pump.fun has accumulated more than $320 million in revenue and has deployed nearly 5 million tokens.

However, making money on the platform does not mean that retail investors are generally profitable. Considering the extremely low probability of success and the increasingly prominent trend of institutionalization, the phenomenon of cutting leeks in the MEME field still exists. To this end, some projects have begun to try to add fundamentals to MEME, such as relatively long-term projects such as Desci and AIMEME. But for now, short-term hype is still the mainstream.

Affected by the U.S. election, Polymarket, a prediction market platform, has also shone this year. In October, Polymarket received 35 million visits to its website, twice as many as major gambling sites, and monthly trading volume surged to $2.5 billion from $40 million in April. A broad user base and real needs bring clear value to it. Although large-scale crypto user conversion has not yet been achieved, a new convergence model of media + gaming is gradually taking shape.

At the end of the year, AI applications moved from technology to implementation and became a hot topic again in the Web3 field. MEME took the lead in detonating the AI boom, and Truth Terminal brought popular projects such as GOAT, ACT, and Fartcoin, triggering a frenzy in the application of AI Agent. At present, mainstream institutions are generally optimistic about AI Agent, believing that it is expected to become a phenomenal track after DeFi. Although the infrastructure in this field is not yet perfect, and the application is concentrated in the surface layer such as MEME and Bot, new tracks often mean new opportunities.

As a bridge between traditional finance and Web3, PayFi plays an important role in this bull market. Stablecoins and RWA are typical examples of this. Stablecoins have made breakthroughs in the payments and remittances market this year, especially in Africa, Latin America, and Eastern Europe. At present, the circulating scale of stablecoins exceeds 210 billion US dollars, and the average monthly transaction exceeds 20 million addresses. Emerging projects such as Ethena have performed well, giving rise to a boom in interest-bearing stablecoins. RWA has grown rapidly since BlackRock’s entry, with the market expanding from less than $2 billion three years ago to $14 billion, covering a wide range of sectors, including lending, real estate, stablecoins, and bonds.

It is worth noting that due to its integration with traditional finance, PayFi is also the Web3 track that the government pays the most attention to. For example, Hong Kong, China, has listed stablecoins and RWA as key development areas next year.

Despite the overall positive outlook, the crypto industry has also experienced tough times under the dual pressures of macro tightening and industry downturns. It is difficult to break through innovative applications, internal disputes are intensifying, and restructuring and mergers and acquisitions are continuous. The weakening of liquidity has led to a divergence in the path of the crypto industry, and Bitcoin has become the target of core capital inflows, constantly siphoning other currencies. The copycat market has been in the doldrums for most of the year, only to bottom out at the end of the year with Wall Street in the spotlight and the copycat season kicking off. In the short term, this divergence is likely to persist or even intensify.

! [Looking back at the “gains and losses” of the crypto market in 2024, where is the road ahead in 2025?] ](https://img-cdn.gateio.im/webp-social/moments-564840a04df838371ea74a3496d6d827.webp)

Market outlook for 2025

Looking ahead to 2025, the crypto market is expected to usher in new development opportunities as new governments govern and institutional funds enter the market. So far, more than 15 institutions have released their market forecasts for 2025.

Judging from the price predictions, institutions are generally bullish on the prospects of Bitcoin. $15-$200,000 is the range of bitcoin highs predicted by several institutions. Some institutions such as VanEck and Dragonfly expect bitcoin to reach $150,000, while Presto Research, Bitwise, and Bitcoin Suisse predict that it could hit $200,000. When strategic reserves are factored in, Unstoppable Domains and Bitwise even give forecasts of $500,000 or more. For other coins, VanEck, Bitwise, and Presto Research expect Ethereum to reach $6,000-7,000, Solana to $500-750, and SUI to $10. Presto and Forbes expect the total crypto market capitalization to reach $7.5-8 trillion, while Bitcoin Suisse predicts that the total altcoin market capitalization could grow by 5 times.

Behind these optimistic forecasts, institutions generally believe that the U.S. economy is expected to achieve a soft landing in 2025, the macro environment will improve, and crypto regulation will be gradually liberalized. Several institutions have a positive attitude towards Bitcoin as a strategic reserve, and it is expected that at least one sovereign state and multiple listed companies will include Bitcoin in the reserve. The continuous inflow of ETF funds is regarded as a high probability event.

From the perspective of specific tracks, stablecoins, tokenized assets and AI are the areas that institutions pay the most attention to.

In terms of stablecoins, VanEck expects settlements to reach $300 billion in 2025, Bitwise predicts $400 billion, and Blockworks Mippo gives an optimistic forecast of $450 billion. A16z believes that businesses will accept stablecoins more as a form of payment, and Coinbase notes that stablecoins could be the next killer app for cryptocurrency.

In terms of tokenized assets, institutions such as A16z, VanEck, Coinbase, Bitwise, Bitcoin Suisse, and Framework are generally bullish. A16z expects tokenization of non-traditional assets to become a new source of revenue as blockchain infrastructure costs fall. VanEck and Bitwise predict that tokenized securities will be worth more than $50 billion. Messari believes that tokenized treasury bonds may face headwinds as interest rates fall, but idle on-chain funds may gain more favor.

In terms of AI, A16z is highly optimistic about the combination of AI and encryption, and it is expected that the AI proxy capability will be greatly enhanced, and it can have an exclusive wallet to achieve autonomous behavior. Coinbase also believes that AI proxies will be a disruptive frontier. VanEck predicts that the on-chain activity of AI agents will exceed 1 million, and Robot Ventures expects the total market capitalization of AI agency-related tokens to increase by at least 5x. Bitwise and Defiprime are bullish on the application of AI in the Meme and DeFi fields, respectively. Messari pointed out three major directions for the combination of AI and encryption: new AI casinos, blockchain for fine-tuning small professional models, and the combination of AI Agent and MEME.

In addition, YBB expects the DeFi renaissance to be the main theme in 2025, Robot Ventures predicts a wave of integration between the appchain and L2 tracks, Messari expects most infrastructure protocols to adopt ZK technology, and VanEck and Bitcoin Suisse are bullish on the resurgence of the NFT market.

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Investor Strategy Recommendations

Looking ahead to 2025, the crypto market is expected to continue its positive momentum. The rise in the price of mainstream currencies has become a high probability event, especially in the first quarter of 2025, which will usher in intensive policy benefits. The fragmentation of the altcoin market is likely to continue, with projects with stronger compliance more likely to receive funding, while other currencies may face the risk of contraction.

From an industrial point of view, although the old public chain still occupies an ecological advantage, the impact of the new public chain cannot be ignored. Ethereum’s value capture and narrative will continue, and external inflows may alleviate some of the pressure. Scaling and account abstraction at the technical level will be an important breakthrough point for Ethereum. Solana still has growth momentum driven by capital, but there are hidden dangers of over-reliance on MEME, and the competition with Base will become increasingly fierce. New public chains such as Monad and Berachain may also join the market.

At the application level, consumer applications will become the focus in the next few years. Appchains and chain abstractions may become the main way DAPPs are built. The revival of DeFi has become a consensus in the market, but it is currently mainly concentrated in top projects such as AAVE. The centralized field focuses on the payment track, and Hyperliquid and Ethena are worth paying attention to.

MEME speculation is likely to continue in the short term, but at a slower pace. There is still room for a longer narrative in certain directions such as Politifi. The MEME infrastructure is expected to be further improved, the user experience will be optimized, and the threshold for use will be lowered and institutionalized is an inevitable trend. New ways of issuing tokens are still likely to spark a boom.

Tracks such as stablecoins, AI, RWA, and DePin are expected to accelerate. In addition, in the context of tight liquidity, on-chain liquidity instruments and protocols that can increase leverage may be favored.

For investors, seizing the opportunities of the new cycle, discovering and adapting to market trends, in-depth research and active participation will be the key to success in 2025.

! [Looking back at the “gains and losses” of the crypto market in 2024, where is the road ahead in 2025?] ](