2024 Annual Report on the Encryption Industry: Market Recovery and Emerging Trends

In 2024, the cryptocurrency market welcomed its fourth bull market, although its development trajectory differed from many expectations. The fourth Bitcoin halving event, adjustments in macroeconomic policies, and changes in the political landscape of the United States jointly drove significant growth in the market. This year, cryptocurrency once again became the focus of mainstream attention, with the total market capitalization reaching a new high of $3.91 trillion.

This report provides an in-depth analysis of the major development trends in the encryption industry for 2024, covering market dynamics, the performance of major cryptocurrencies, the evolution of decentralized finance (DeFi) and non-fungible token (NFT) ecosystems, as well as the development status of trading platforms.

The following are the seven key points of the report:

1. In the fourth quarter of 2024, the total market capitalization of the cryptocurrency market will grow by 45.7%, reaching $3.91 trillion by the end of the year, with an annual increase of 97.7%.

2. Bitcoin further solidified its market dominance, accounting for 53.6% of the total market capitalization.

3. Bitcoin outperformed other major asset classes throughout 2024 and in the fourth quarter.

4. The market value of artificial intelligence agent categories grew significantly by 322.2% in the fourth quarter, increasing from $4.8 billion to $15.4 billion.

5. In the fourth quarter of 2024, the trading volume of Ethereum Layer 2 solutions increased by 48.3%, with a certain emerging platform accounting for 48.3% of the market share.

6. Centralized exchange (CEX) spot trading volume in the fourth quarter reached a historic high of $6.45 trillion, a quarter-on-quarter increase of 111.7%.

7. Solana has surpassed Ethereum to become the dominant chain for decentralized exchange (DEX) trading, accounting for over 30% of all DEX transactions.

Detailed Analysis

1. Market Overview: Strong Recovery

In the fourth quarter of 2024, the total market capitalization of the cryptocurrency market increased by 45.7% (approximately $1.07 trillion), ending the year at $3.40 trillion. Although market momentum weakened in the third quarter, after a brief adjustment, the market began to rebound in the middle of the fourth quarter, especially after the announcement of the U.S. election results. For the entire year, the total market capitalization nearly doubled, growing by 97.7%. In mid-December, the market cap reached a historical peak of $3.91 trillion, before slightly retreating. The average daily trading volume in the fourth quarter was $200.7 billion, an increase of 128.2% compared to the previous quarter.

2. The dominance of Bitcoin is increasing.

Bitcoin's market share continues to rise, albeit at a slower pace, with a growth of 0.9% in the fourth quarter. XRP has performed outstandingly, with its market share increasing to 3.5% (up 2.0%), jumping from 7th to 4th place. Notably, a well-known stablecoin has fallen out of the top seven for the first time, replaced by Dogecoin. Ethereum's market share continues to decline, dropping to 11.8%, hitting a new low since April 2021.

3. Bitcoin performs excellently.

In the fourth quarter of 2024, Bitcoin first broke the $100,000 mark, reaching a historical high of $108,135 on December 9, and closing the year at $93,508, with an annual increase of 121.5%. The surge in Bitcoin began from the low of $54,000 in the third quarter and accelerated again after the results of the U.S. presidential election were announced. Expectations of interest rate cuts by the Federal Reserve and the outlook for loose monetary policy further boosted the market. In the fourth quarter, the average daily trading volume surged from $31.1 billion to $62.6 billion, a quarter-on-quarter increase of 101.3%.

4. The Rise of Artificial Intelligence Agent Categories

Artificial intelligence agents have shown impressive performance as an emerging category in the fourth quarter of 2024, with market capitalization skyrocketing from $4.8 billion to $15.5 billion, an increase of 322.2%. This trend began in early October when a well-known project launched on Solana. Currently, the main artificial intelligence agent projects are concentrated on Solana and a certain Layer 2 platform. Although market shares have fluctuated, this category overall displays a strong growth trend.

5. Layer 2 solutions are thriving

In the fourth quarter of 2024, the average daily transaction volume of major Ethereum Layer 2 solutions reached 15 million, a month-on-month increase of 48.3%. A certain emerging platform performed particularly well, with its average daily transaction volume rising from 4 million to 7.2 million, accounting for 48.3% of the total Layer 2 transaction volume. Another emerging Layer 2 platform also showed impressive results, becoming the second most active network, surpassing a well-known Layer 2 project.

6. Centralized Exchange Hits New High

In the fourth quarter of 2024, the spot trading volume of major centralized exchanges (CEX) reached $6.45 trillion, a quarter-on-quarter increase of 111.7%, setting a new historical high. The annual trading volume reached $17.4 trillion, significantly up from $7.2 trillion in 2023. A leading exchange continues to maintain its market dominance, with a market share of 34.7% in December. Notably, a certain South Korean exchange saw the most rapid growth in the fourth quarter, with a quarter-on-quarter trading volume increase of 314.8%.

7. Changes in the decentralized trading landscape

In the fourth quarter of 2024, Solana surpassed Ethereum to become the dominant chain for decentralized exchange platforms (DEX), with a market share exceeding 30%. Solana's trading volume in the fourth quarter reached $219.2 billion, a quarter-on-quarter increase of 152.0%. Although Ethereum still led Solana for the entire year, its market share fell to between 25% and 28% in the fourth quarter. A certain Layer 2 solution performed exceptionally well in the fourth quarter, achieving a market share of over 14%, reaching 19.0% by the end of the year, a quarter-on-quarter increase of 206.5%.

Overall, the cryptocurrency market in 2024 shows a strong recovery trend, with the rapid development of emerging technologies and platforms injecting new vitality into the industry. As the market continues to mature and innovate, we expect 2025 to be an even more exciting year for the encryption industry.