Crypto market review in 2024 and outlook for 2025

2024 is a milestone year in the history of cryptocurrency. The approval of ETFs and the U.S. elections have become the two core narratives, leading to breakthrough developments in the crypto industry centered around Bitcoin. Mainstream institutions, traditional finance, and even governments have entered this field, significantly increasing the recognition of crypto assets. With the new government in power, the regulatory environment is gradually becoming clearer and more lenient. Mainstream integration, path differentiation, and regulatory evolution have become the main themes of the industry in 2024.

2024 Review: Bitcoin Reigns Supreme, Ethereum Faces Challenges, MEME Popularity Unabated

Bitcoin is undoubtedly the core of 2024. The approval of ETFs and national reserves have pushed Bitcoin past the $100,000 mark, officially declaring that Bitcoin has transcended the definition of cryptocurrency and become a globally recognized anti-inflation asset. The Bitcoin ecosystem has also expanded; although projects like inscriptions and runes have seen ups and downs, a diverse ecosystem has begun to take shape. The total locked value of Bitcoin DeFi has surged from $300 million at the beginning of the year to $6.755 billion, growing more than 20 times over the year.

The situation for Ethereum is not very optimistic. It has underperformed compared to other assets, with a decline in value capture and user activity, and its narrative power is not what it used to be. The "value theory" has put Ethereum under severe strain. Despite the loud calls for a DeFi revival, substantial investment is insufficient except for the TVL nesting frenzy caused by re-staking. However, the emergence of the dark horse Hyperliquid in the derivatives market at the end of the year has brought new hope to DeFi. On the other hand, after the Dencun upgrade, the internal competition within Ethereum Layer 2 has intensified, continuously eroding the mainnet's market share, and doubts about Ethereum's mechanisms have also risen.

In contrast, Solana's strong rise is in stark contrast. Solana's TVL jumped from almost zero at the beginning of the year to 6.9% at the end of the year, making it the second largest public chain after Ethereum. The price of SOL has created a miracle of growth, from $6 two years ago to $200 today, and will rise by more than 100% in 2024 alone. With the advantages of low cost and high efficiency, Solana has successfully positioned liquidity, relying on Degen culture to become the king of MEME, attracting a large number of retail investors.

TON and SUI are also emerging in 2024. Telegram has led to the prosperity of the blockchain game field and opened up a new traffic portal for Web3. TON has finally ushered in explosive growth, with more than 38 million on-chain users and a cumulative transaction volume of more than $2.1 billion. SUI has attracted market attention with its amazing gains, and the Move language public chain has developed rapidly. In contrast, although the price performance of the public chain Aptos was weaker in the same period, it was more favored by traditional capital and established cooperative relations with a number of well-known financial institutions.

MEME has become the main driving force of the market in 2024. The rise of MEME signifies a shift in the market landscape, with excess liquidity flowing into sectors with stronger fairness and profit-seeking potential. The connotation of MEME is also continuously expanding, evolving from a purely speculative target to a representative of cultural finance. Although the market capitalization of MEME only accounts for about 3% of the top 300 cryptocurrencies, its trading volume consistently occupies 6-7% of the share, once surging to 11%, making it the most concentrated track for liquidity.

The infrastructure surrounding MEME is also continuously improving. The fair launch platform Pump.fun has emerged, reshaping the MEME landscape and becoming one of the most profitable and successful applications of 2024. In November, Pump.fun became "the first Solana protocol to exceed $100 million in monthly revenue." As of December 22, its cumulative revenue has surpassed $320 million.

However, the platform's profits do not equate to user gains. Given the extremely low success probability and the increasingly prominent institutionalization trend of MEME, losses seem inevitable for ordinary users. To this end, some projects have begun attempting to add fundamentals to MEME, but short-term speculation remains the mainstream.

Affected by the U.S. election, Polymarket, a prediction market platform, has sprung up. In October alone, Polymarket received 35 million visits, twice as many as major gambling sites, and monthly transactions surged to $2.5 billion from $40 million in April. Although it has not been able to achieve large-scale crypto user conversion, a new convergence model of media + gaming has begun to emerge.

At the end of the year, AI technology has transitioned from concept to application, becoming a hotspot once again in the Web3 field. MEME was the first to ignite this trend, while Truth Terminal has rapidly risen with a series of AI-related tokens, sparking a wave of AI Agent applications. Currently, most mainstream institutions are optimistic about AI Agents, believing they have the potential to become another phenomenal track following DeFi. Although the infrastructure in this field is not yet完善, and applications are mainly focused on surface-level areas such as MEME and Bot, emerging fields often contain enormous opportunities.

PayFi serves as a bridge connecting traditional finance and Web3, becoming a core driving force in this round of the bull market. Among them, stablecoins and RWA are typical representatives. In 2024, stablecoins are expected to grow rapidly in the crypto market, while also occupying a place in the global payment and remittance market. Regions such as Africa, Latin America, and Eastern Europe are starting to bypass traditional banking systems and directly adopt stablecoins for transaction settlements, with a year-on-year growth exceeding 40%. Currently, the circulating value of stablecoins exceeds $210 billion, significantly higher than the tens of billions in 2020. RWA was completely ignited after BlackRock announced its entry, expanding from less than $2 billion three years ago to $14 billion, covering multiple fields such as lending, real estate, stablecoins, and bonds.

It is worth noting that, due to its integration with the traditional financial system, PayFi has also become the most favored Web3 track for government agencies. For example, Hong Kong has identified stablecoins and RWA as key areas for development in 2025.

Despite the overall positive outlook, the crypto sector has also experienced a severe test under the dual pressure of macro tightening and the downward cycle of the industry in the past two years. 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, forming a pattern in which Bitcoin continues to absorb the liquidity of other currencies. The copycat market has been in the doldrums for most of 2024, only to bottom out at the end of the year under the watchful eye of Wall Street, and the copycat season kicks off. In the short term, this trend of path divergence is likely to continue to 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)

2025 Outlook: New Cycle, New Applications, New Directions

Looking ahead to 2025, as the new government ushers in a new era of encryption, well-capitalized institutions are eager to participate. Currently, over 15 institutions have released market forecasts for 2025.

Judging from the price predictions, institutions are generally bullish on the value of Bitcoin. Most institutions expect the peak price of Bitcoin to be between $15 and $200,000. If strategic reserves are taken into account, some institutions even give forecasts of $500,000 or more. For other currencies, the agency expects ETH to reach $6,000-7,000, Solana to $500-750, and SUI to $10. The total crypto market capitalization is expected to reach $7.5-8 trillion, and the total market capitalization of altcoins could increase by 5 times.

Institutions generally believe that the US economy will experience a soft landing in 2025, with an improved macro environment, and encryption regulation will also be relaxed accordingly. Many institutions hold a positive attitude towards Bitcoin as a strategic reserve, expecting that at least one sovereign nation and numerous listed companies will incorporate Bitcoin into their reserves. The increase in ETF fund inflows will become an objective fact.

From a specific track perspective, stablecoins, tokenized assets, and AI are the areas of greatest concern for institutions. In terms of stablecoins, institutions expect the settlement volume to reach $300-450 billion by 2025. Enterprises will increasingly accept stablecoins as a payment method, which could become the next killer application for encryption.

In terms of tokenized assets, a number of institutions expressed optimism. As the cost of blockchain infrastructure falls, the tokenization of non-traditional assets will become a new source of revenue. Tokenized securities are expected to be worth more than $50 billion. However, some institutions pointed out that as interest rates fall, tokenized treasury bonds may face headwinds, and the focus may shift from traditional financial assets to on-chain opportunities.

In the AI sector, institutions generally hold an optimistic attitude. It is expected that the autonomous agency capabilities of AI will be greatly enhanced, and AI agents equipped with encryption wallets may become a disruptive frontier. Some institutions predict that on-chain activities of AI agents will exceed 1 million, and the total market value of tokens related to AI agents may grow by at least 5 times. Specific application scenarios may include new types of AI casinos, MEME, DeFi, etc.

On other aspects, institutions have different focuses in their predictions. Some institutions believe that the revival of DeFi will become the main theme of 2025; some institutions expect a wave of consolidation in the application chain and L2 track; other institutions predict that almost all infrastructure protocols will adopt ZK technology, the DEPIN industry's revenue will reach 8-9 digits, and the NFT market may rise again, among other things.

Conclusion: Opportunities and Challenges for Investors

Overall, institutions are generally optimistic and positive about 2025, and are expected to continue to improve in terms of price, ecology and mainstream adoption.

From a price perspective, the rise in mainstream coin prices has become inevitable, especially in the first quarter of 2025, which will welcome a series of favorable policy measures. The altcoin market may continue to differentiate, with compliant altcoins more likely to attract capital inflows and narrative support, while other coins may face contraction. If macro liquidity tightens, the risks of altcoins will become more pronounced.

From an industrial perspective, although the established public chains still hold ecological advantages, the challenges posed by new public chains cannot be ignored. The value capture and narrative of Ethereum will continue to ferment, and external capital inflows may provide some relief. Technical expansion and the popularization of account abstraction will become important breakthrough points for Ethereum. Solana still has growth momentum with capital support, but excessive reliance on MEME presents potential risks. It is expected that new public chains such as Monad and Berachain will join the market competition.

The industry as a whole will shift from infrastructure to application development, and consumer-grade applications are likely to become the focus in the next few years. APPCHAINS AND CHAIN ABSTRACTIONS ARE LIKELY TO BECOME THE MAIN WAY DAPP IS DEVELOPED. There is a consensus on the revival of DeFi, but it is currently mainly reflected in AAVE. The centralized space is focused on payments, with Hyperliquid and Ethena worth keeping an eye on.

The speculative frenzy around MEME may continue in the short term, but the pace will slow down. The infrastructure surrounding MEME is expected to be further improved, user experience will be optimized, and the barriers to entry will be lowered. The institutionalization of MEME is an inevitable trend, but new token issuance methods may still trigger a new wave of excitement.

Since the incremental market comes from institutions, the tracks that institutions are optimistic about, such as stablecoins, AI, RWA, DePin, etc., may accelerate their development. In addition, against the backdrop of tight liquidity, any on-chain liquidity instrument and protocol that can increase leverage may be favored.

A new market cycle is about to arrive. As investors, the key lies in identifying the cycle, adapting to it, conducting in-depth research, and actively participating to seize new opportunities.

! [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-ac6a62e947eb6d1a932814748f82cef7.webp)