2024 is undoubtedly an important year in the history of encryption.

This year, centered on the two core narratives of ETFs and the US election, with Bitcoin as the main lever, the encryption industry successfully achieved a breakthrough this year. Listed companies, traditional Financial institutions have even poured in, and mainstreaming and recognition have been greatly improved. The regulatory environment has also moved towards a clear and relaxed path with the new appointment. Mainstream collision, path differentiation and regulatory evolution have become the main theme of the industry this year.

01 Review of 2024: Bitcoin reaches the top, Ethereum is being chased, and MEME Casino attracts attention

Looking at the major developments in the industry this year, Bitcoin is undoubtedly the core narrative.

ETFs and reserves have allowed Bitcoin to successfully reach US$100,000, officially announcing that Bitcoin has surpassed the connotation of cryptocurrency and has become a strong global anti-inflation asset. The value store has been recognized, and BTC has begun to gradually move from digital gold to a super-sovereign currency, marking the staged victory of this grand financial experiment that began with Satoshi Nakamoto. On the other hand, the Bitcoin ecology has expanded this year. Although Inscription, Rune and even L2 are in a state of fire and ice, the diversified Bitcoin ecology has been initially formed, and applications such as BTCFi, NFT, games, and social networking continue to Development, Bitcoin DeFi TVL soared from US$300 million at the beginning of the year to US$6.755 billion, growing more than 20 times throughout the year. Among them, Babylon has become the largest protocol on the Bitcoin chain. As of December 20, Babylon’s TVL has reached US$5.564 billion, accounting for 82.37% of the total. The broad BTCFI has performed particularly well this year. The share of Bitcoin spot ETFs has soared, and MicroStrategy, which was selected to be included in the Nasdaq 100, has been imitated, all reflecting Bitcoin's overwhelming success in the Cefi field.

Back to the public chain field, life is not so easy for this year’s leading Ethereum . Compared with other assets, the performance is poor, value capture and user activity have declined, and the narrative is not as good as before. The "theory of value" has made Ethereum suffer. Although the Defi renaissance slogan has taken shape, except for the TVL matryoshka craze caused by re-staking, it seems that only Aave is responsible for it all, and the actual investment is obviously insufficient. However, late-year derivatives dark horse HyperliquidThe emergence of CEX not only revolutionized half the life of CEX, but also sounded the clarion call for DeFi to counterattack. On the other hand, after the Dencun upgrade, the involution of Ethereum Layer 2 accelerated and continued to eat up the main network share, so that the market started a big discussion about the Ethereum mechanism, and there were endless doubts. Even the rapid growth of Base made the market With Ethereum’s future is Coinbase rumored.

Solana’s strong rise is in sharp contrast. From the perspective of TVL, Ethereum's market share in the public chain has dropped from 58.38% at the beginning of this year to 55.59%, but Solana has jumped from zero at the beginning of the year to 6.9% at the end of the year, becoming the second largest public chain after Ethereum. SOL has created a growth miracle, soaring from US$6 two years ago to US$200 today. This year alone, it has also increased by more than 100%. From the perspective of recovery path, with the unique advantages of low cost and high efficiency, Solana aims at the core liquidity positioning, relying on Degen culture to rise to the well-deserved king of MEME, becoming this year's retail concentration camp. This year, Solana’s daily on-chain fees have exceeded Ethereum many times, and the growth of new developers has also surpassed Ethereum, which is a significant catching-up trend.

TON and SUI also stand out this year. Telegram, with 900 million users, has single-handedly ignited the blockchain gaming field and opened up a new entrance for Web3 traffic, giving a strong stimulus to the market that had been dormant for a long time before September. TON, which had been backed by a big tree to enjoy the shade, finally changed from its long-standing status quo. On the eve of the dawn of the outbreak, China entered the fast lane of growth. According to Dune data, there are currently more than 38 million users on the TON chain, and the cumulative transaction volume exceeds US$2.1 billion. SUI is completely convinced by its popularity. The Move language public chain is progressing rapidly, with a three-pronged approach of hardware development, protocol diversification, and the introduction of airdrops. The future seems bright. Compared with the price-driven SUI, the public chain Aptos, despite its relatively weak price performance during the same period, was more favored by traditional capital. This year it successfully established cooperation with BlackRock, Franklin Templeton, and Libre. Its compliance with regulations may allow it to compete in the new era. The dawn of the RWA and BTCFI cycle is coming.

From an application perspective, MEME is the main driver of the market this year. In essence, The rise of MEME is a sign of the changes in the current market structure. VC tokens are not being bought up, and excess liquidity has no bid. It is ultimately poured into sectors with stronger fairness and profit-seeking. Among this, the connotation of MEME is also constantly expanding, gradually evolving from a single target of speculation toGradually developing into a typical representative of cultural finance, "Everything is OK MEME" is happening in reality. Although MEME only accounts for less than 3% of the top 300 cryptocurrencies (excluding stablecoins) in terms of market capitalization, its trading volume continues to account for 6-7%, and recently reached 11%. It is liquidity. The most concentrated main track. According to data from Coingecko, MEME accounted for 30.67% of investors’ attention this year, ranking first among all tracks. Wherever the attention is, the money will naturally be there, and this is indeed the case. Looking at this year's MEME, pre-sale fundraising, celebrity tokens, Zoo Wars, PolitFi and AI, all of them are top-notch in the industry.

In this context, the infrastructure surrounding MEME continues to be consolidated, and the fair launch platform Pump .fun came into being, not only reshaping the MEME landscape, but also successfully becoming one of the most profitable and successful applications this year. In November, Pump.fun became "the first Solana protocol in history to earn more than $100 million in monthly revenue." ". According to Dune data, as of December 22, pump.fun’s cumulative revenue exceeded US$320 million, and the total number of deployed tokens was approximately 4.93 million.

Of course, making money on the platform does not mean that retail investors make money. Considering that the probability of a golden dog is one in 100,000, and only 3% of users can make money on Pump The profit on .fun exceeds US$1,000, coupled with the increasingly prominent trend of MEME institutionalization. From the user's perspective, no matter how fair it seems, cutting and being cut are inevitable. Perhaps it is precisely because of this that adding fundamentals to MEME has become a new development model for projects. Most relatively long-term projects such as Desci and AIMEME have adopted this model, but from the current point of view, short-lived projects are still the mainstream. The importance of "running fast to live well" is still rising.

Affected by the US election, another god-level application has surfaced. Polymarket surpasses all betting platforms on the market and became an instant hit in the prediction market with its high accuracy. In October alone, the Polymarket website received 35 million visits, twice that of popular betting sites such as FanDuel, and its monthly transaction volume surged from $40 million in April to $2.5 billion. A wide range of users and real needs equal clear value applications, but Buterin is full of praise for it. The only pity is that it has not achieved large-scale encryption user conversion. But the new integration of media + gambling is undoubtedly coming slowly.

At the end of the year, large models have leapt from technology to application, and have shown a fierce competition. After AI has been swaying in the Web3 hotspot for a year, it finally counterattacked again and became the dark horse of the year. MEME took the lead in detonating it, and Truth Terminal came quickly with Golden Dog GOAT, ACT, and Fartcoin, and the hundred-fold myth reappeared, launching a craze for the niche application of AI Agent. At present, almost all mainstream institutions are optimistic about AI. Agent believes that it is the second phenomenal track after Defi. However, as of now, the infrastructure in this field is not yet complete, and applications are mostly concentrated on the surface such as MEME and Bot. There is less in-depth integration of AI and blockchain. , but newness also means opportunities, and cyber-style currency speculation remains to be seen.

On the other hand, from the perspective of the core driving institutions of this bull market, PayFi, which seamlessly connects traditional finance and Web3, will definitely bear the brunt. Stablecoins and RWA are typical representatives. Stablecoins are really what everyone is looking forward to this year. Large-scale applications have emerged, not only growing rapidly in the field of encryption, but also beginning to occupy a position in the global payment and remittance market. Sub-Saharan Africa, Latin America and Eastern Europe have begun to bypass the traditional banking system and directly use stablecoins for transaction settlement, with a year-on-year scale. grew more than 40%. The current value of stablecoins in circulation is more than $210 billion, significantly higher than the billions of dollars in 2020, and an average of more than 20 million addresses conduct stablecoin transactions on public blockchains in the first half of 2024 alone. The settlement value of the currency exceeds 2.6 trillion US dollars. From the perspective of new products, Ethena is the most outstanding performance among stable currency projects this year. , and further spawned the craze for interest-bearing stablecoins, which is also the main driver of AAVE's revenue this year. RWA, however, was completely ignited after BlackRock officially announced its entry, with a market value of less than US$2 billion three years ago. The scale of RWA has expanded to US$14 billion this year, covering multiple fields such as lending, real estate, stable coins, and bonds.

In fact, PayFi's development is consistent with the market pace. It is precisely because the internal market growth has encountered bottlenecks. The mainstream institutional market is at the beginning of a new cycle. In order to seek for incremental space, PayFi has entered a critical process at this stage. It is worth noting that due to its integration with the traditional financial system, this field is also the Web3 competition most favored by institutions. Tao, such as Hong Kong has listed stablecoins and RWA as important areas for development next year.

Of course, although things seem to be improving, it cannot be denied that the situation is approaching. Two years of macro-tightening and industry downturn cycleAgainst this dual background, the encryption field has also experienced extremely difficult stress tests. Innovative applications are difficult to implement, internal disputes are intensifying, restructuring and mergers are ongoing, and the weakening of liquidity has led to the differentiation of the encryption industry, forming a pattern of Bitcoin core inflows and continuous siphoning of other currencies. The copycat market has been in garbage time for most of this year. Shenyu's "there are no copycats in this bull market" has been repeatedly confirmed and falsified. It was not until the end of the year that it bottomed out and rebounded under the attention of Wall Street, and the copycat season kicked off. Judging from the current situation, path differentiation will continue in the short term and will become more and more intense.

02 Looking forward to 2025: new cycle, new application, new direction

Back to the present, the New Year’s bell is about to ring. Looking forward to 2025, as Trump opens a new era of encryption, institutions with strong capital are also eager to try it. As of now, more than 15 institutions have released market forecasts for next year.

In terms of price prediction, all institutions are optimistic about the value of Bitcoin. 150,000-200,000 is the peak price of Bitcoin considered by 6 of the institutions. part. Among them, VanEck and Dragonfly believe that the price will reach US$150,000 next year, while Presto Research, Bitwise, and Bitcoin Suisse believe that it will reach US$200,000. On the basis of strategic reserves, Unstoppable Domains and Bitwise have proposed US$500,000 or more. High judgment. As for other currencies, VanEck, Bitwise and Presto Research have given predictions, believing that ETH will be around US$6,000-7,000, while Solana will be between US$500-750, and SUI may also rise to US$10. Presto and Forbes believe that the total market value of crypto It will reach 7.5-8 trillion, and Bitcoin Suisse said that the total market value of altcoins will increase five times.

Price forecasts are naturally supported. Almost all institutions believe that the U.S. economy will usher in a soft landing next year, the macro environment will improve, and crypto regulation will follow. Let go, more than 5 institutions have a positive view on the Bitcoin strategic reserve, believing that at least one sovereign and many listed companies will include Bitcoin in the reserve. All institutions believe that the increase in ETF inflows will become an objective fact.

From a specific track perspective, stablecoins, tokenized assets and AI are the areas that institutions are most concerned about. From the perspective of stablecoins, VanEck believes that stablecoin settlement volume will beIt will reach US$300 billion next year, while Bitwise said that driven by accelerated legislation, accelerated financial technology applications, and global settlement, the scale of stablecoins will reach US$400 billion. Blockworks Mippo is more optimistic, giving an estimate of US$45 million. A16z also believes that enterprises will increasingly accept stablecoins as a payment method. Coinbase also pointed out in the report that the next wave of real adoption of cryptocurrencies (killer applications) may come from stablecoins and payments.

In terms of tokenized assets, A16z, VanEck, Coinbase, Bitwise, Bitcoin Suisse and Framework are all optimistic about the track. A16z’s prediction mentioned that as the cost of blockchain infrastructure decreases, the tokenization of non-traditional assets will become a new source of revenue and further promote the decentralized economy. VanEck gave a specific value, believing that tokenized securities are worth more than $50 billion, which coincides with Bitwise’s forecast data. Messari gave a differentiated conclusion based on actual conditions. He believes that as interest rates decline, tokenized government bonds are expected to face resistance, but idle on-chain funds may gain more favor, and the focus may shift from traditional financial assets to on-chain Chance.

In the direction of AI, A16z, which has already made heavy bets in the field of AI, remains highly optimistic about the combination of AI and encryption. It believes that AI’s autonomous agent capabilities will be greatly Enhanced, artificial intelligence can have a dedicated wallet to achieve subjective behavior, and decentralized autonomous chatbots will become the first truly autonomous high-value network entities. Coinbase also acknowledged this, pointing out that artificial intelligence (AI) agents equipped with crypto wallets will be the forefront of disruption. VanEck said that there are more than 1 million on-chain activities of AI agents, and Robot Ventures also believes that the total market value of AI agent-related tokens will increase by at least five times. Although Dragonfly agrees that the token will rise significantly, it still holds a relatively conservative view on practical applications, believing that the application of the underlying protocol may be relatively limited.

Bitwise and Defiprime pointed out the core usage scenarios. The former believes that AI Agent will lead the explosion of Meme, while the latter said that DeFi is the deep integration scenario. Messari gave a more specific path, believing that the combination of AI and encryption has three major directions. One is new AI casinos, such as Bittensor and Dynamic TAO, and the other is the field where blockchain technology will be used for small and professional model fine-tuning. The third is the combination of AI Agent and MEME.

In other aspects, institutional forecasts have different focuses. For example, YBB believes that DeFi renaissance will be the main theme in 2025, Robot Ventures believes that there will be a wave of integration in application chains and L2 tracks, and Messari predicts that almost all basic Facility protocols will all adopt ZK technology by 2025. The DEPIN industry will achieve 8-digit to sub-9-digit revenue by 2025. VanEck and Bitcoin Suisse believes that NFT will return, etc. Since there are too many words, I will not go into details here.

03Conclusion: Where do investors go?

Although the arguments are slightly different and there are differences in the subdivisions, it is not difficult to see that all institutions have optimistic and positive expectations for next year, whether it is price increase, ecological expansion or mainstream adoption , are expected to continue to climb to the peak in 2025.

It is foreseeable that from a price perspective, it is inevitable that the price of mainstream currencies will rise, especially in Q1 next year. , will be dense Positive period. The altcoin market will continue to be differentiated. Affected by ETFs, altcoins that comply with compliance will be more likely to receive capital inflows and narrative continuation, while other currencies will slowly shrink. If macro liquidity becomes tight, the risks of altcoins will More and more prominent

From an industry point of view, although the strong old public chains still occupy the leading ecological advantage, the impact from new public chains is also inevitable. Ethereum’s value capture and narrative methods will continue to ferment, but optimistically, the growth of external funds The inflow may alleviate this, and the expansion of technology and the popularization of account abstraction will also become An important breakthrough for Ethereum in 25 years. Solana still has growth momentum due to its capital voice, but there are hidden risks in its high reliance on MEME. Base's competition with it will become increasingly fierce. In addition, it is expected that a number of new public chains will join the market competition. For example Monad and Berachain

From infrastructure construction to application development is the general direction of future industrial development. Consumer-level applications will be the focus of applications in the following years. Application chains and chain abstractions may become the main focus of DAPP construction. Method. From the perspective of the track, the renaissance of DeFi has become a consensus, but at this stage it is still projected on AAVE. As for the focus of centralization, Hyperliquid and Ethena are still worthy of focus.

MEME's speculative wave in the short termThere is a high probability that it will continue, but the pace will slow down significantly, especially under the influence of the copycat season. However, key directions such as Politifi still have a relatively long narrative to follow. Despite this, the infrastructure surrounding MEME is still expected to be improved, the user experience can be optimized, and the lowering of usage thresholds and the institutionalization of MEME are inevitable trends. It is worth noting that new ways of launching tokens will cause a new wave of excitement at any time.

Since the incremental market comes from institutions, the tracks that institutions are optimistic about are expected to accelerate development, and stablecoins, AI, RWA, and DePin will still become the focus of the next round. narrative. In addition, in the context of tight liquidity, any on-chain liquidity tools and protocols that can increase leverage will most likely be favored.

A new cycle is coming, and as an investor, the only choice is to get rid of the old and welcome the new, discover the cycle, adapt to the cycle, and conduct in-depth research and participation.