2024 Crypto Market Review and 2025 Outlook

2024 is a significant year in the history of cryptocurrencies. Centered around the two core narratives of ETFs and the U.S. elections, Bitcoin leads the industry to breakthroughs, with a large influx of mainstream institutions and a significant increase in industry recognition. The regulatory environment is also becoming clearer and more relaxed with the new government in power, with mainstream integration, path differentiation, and regulatory evolution becoming the main themes of the year.

2024 Review

Bitcoin is undoubtedly the core narrative. The approval of ETFs and national reserves have pushed its value past $100,000, officially transcending the crypto market category to become a globally recognized anti-inflation asset. The Bitcoin ecosystem has also expanded, with DeFi TVL growing over 20 times throughout the year to $6.755 billion.

Ethereum is facing challenges, with a decline in value capture and user activity. The Layer 2 competition intensifies, eroding the market share of the mainnet and raising doubts about Ethereum's mechanism. In contrast, Solana has risen strongly, with its TVL market share jumping from nearly zero at the beginning of the year to 6.9%, becoming the second-largest public chain after Ethereum.

MEME has become the main driving force in the market, accounting for 30.67% of investors' attention. The infrastructure surrounding MEME is constantly improving, with the fair launch platform Pump.fun emerging as a strong contender, accumulating over $320 million in revenue.

Affected by the U.S. election, the prediction market Polymarket has become a legendary application, with 35 million visits in October, twice that of mainstream betting platforms.

At the end of the year, AI makes another comeback in the Web3 field. Truth Terminal ignites the AI Agent craze, with projects like GOAT and ACT seeing astonishing increases. Institutions generally have a positive outlook on AI Agents, believing they are likely to become the next phenomenon after DeFi.

Stablecoins and RWAs are shining in the PayFi sector as a connection between traditional finance and Web3. Stablecoins hold a significant place in the global payment and remittance market, with a total circulation value exceeding $210 billion. The scale of RWAs has expanded to $14 billion, covering multiple fields such as lending and real estate.

2025 Outlook

Many institutions are optimistic about 2025. There is a general expectation that the price of Bitcoin will reach $150,000 to $200,000, with some institutions even predicting it could surpass $500,000. Ethereum is expected to be between $6,000 and $7,000, while Solana may reach $500 to $750. The total market capitalization of crypto is expected to climb to $7.5 to $8 trillion.

Stablecoins, tokenized assets, and AI are the areas of greatest concern for institutions. It is expected that the settlement volume of stablecoins will reach $300 billion to $450 billion, and the value of tokenized securities may exceed $50 billion. The integration of AI and encryption will accelerate, and AI agents may become the first truly autonomous high-value network entities.

Other hot topics include the resurgence of DeFi, application chains and L2 integration, the popularization of ZK technology, and the rapid growth of the DEPIN industry. The NFT market is also expected to recover.

Investment Strategy

1. The prices of mainstream cryptocurrencies are expected to continue rising, especially during the policy favorable period in Q1 2025.

2. The differentiation in the crypto market is intensifying, and projects with stronger compliance are more likely to attract funding.

3. Ethereum faces challenges, but external capital inflows may ease the pressure. Solana's growth momentum remains, but there are risks associated with over-reliance on MEME.

4. Consumer-grade applications will become a focus, and application chains and chain abstraction may become the main development methods.

5. The consensus on DeFi revival has been reached, and AAVE is worth paying attention to. Hyperliquid and Ethena have huge potential in the payment sector.

6. The MEME speculation craze may continue, but the pace is slowing down. Niches like Politifi still have room for growth.

7. The tracks favored by institutions such as stablecoins, AI, RWA, and DePin are expected to accelerate development.

8. On-chain liquidity tools and protocols may be favored in the context of liquidity tightening.