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In 2024, the crypto industry experienced significant growth, with market capitalization rising by 96.2% year-on-year (YoY), driven by strong gains in the first and fourth quarters. The launch of spot BTC ETFs in the U.S. in January marked a pivotal moment, boosting market sentiment and attracting new capital. Favorable macro conditions, including the U.S. Federal Reserve's interest rate cut in September and positive regulatory expectations post-U.S. Presidential election, further propelled the market. Key narratives included the points meta, restaking, memecoins, AI agents, and stablecoins. Looking ahead, we are monitoring global monetary policies, regulatory changes, new ETF approvals, and the emergence of crypto-specific narratives.
Bitcoin had an eventful 2024, bookmarked by the U.S. spot ETF approvals in January, and the breaking of the long-anticipated US$100K mark in December. The ETFs proved historically successful, attracting around US$35B in net inflows and boasting over US$105B in total assets. Bitcoin dominance exceeded 60%, a level unseen since 2021. Performance versus traditional assets remained extremely impressive, leading almost all traditional investments. On the demand side, the 4th Halving event halved annual Bitcoin issuance, while the Bitcoin ecosystem bloomed, including a 2,000%+ rise in DeFi total value locked. As we look ahead, the growing maturity of the ETFs, the incoming Donald Trump administration (perhaps aided by a Strategic Bitcoin Reserve or further corporate Bitcoin adoption), and a growing Bitcoin ecosystem around Layer 2s (L2s), Decentralized Finance (DeFi), and more, are some factors that excite us.
In 2024, Ethereum led alt-L1s in metrics like market cap, trading volume, and DeFi TVL, while activity metrics such as daily transactions and active addresses were dominated by Solana, which also offers the lowest average transaction fee. In 2025, the U.S. Ether ETFs, the potential for more dApps in launching their own chain, the Pectra Upgrade, and Ethereum's prioritization dilemma are key stories to consider. Solana broke fee and DEX volume all-time highs multiple times in 2024 and developer interest grew significantly, however, stablecoins on the chain remained relatively low. Their new upcoming client, Firedancer, network extensions (i.e., Solana L2s), and SVM stack chains are important stories to follow. BNB chain saw scalability progress with opBNB and data storage development with Greenfield. Sui outgrew Aptos, while Avalanche saw its largest update yet with Avalanche9000. Tron was strong in stablecoin transactions (although saw its position challenged). TON, which slowed in H2 2024, remains important to watch, alongside the launches of Berachain and Monad.
For L2s, 2024 was earmarked by a plethora of token generation events across both the optimistic and zero knowledge types, with over nine major L2 token launches taking place over the course of the year. It was, however, the Base L2 that stole the limelight in 2024. Despite its lack of a token, Base grew to capture 39% and 67% of the market in terms of total value locked (TVL) and daily active users respectively, making it the top L2 in both metrics. With many of the airdrop rewards now behind us, 2025 will tell which L2s can sustain user activity and capital without relying heavily on token incentives.
2024 has marked a robust recovery for DeFi, driven by a substantial influx of capital that propelled total value locked up by 119.7% year-to-date (YTD) to US$119.3B. This resurgence has sparked a renaissance across DeFi sub-sectors, with core areas like Money Markets and Decentralized Exchanges (DEXes) reaching new milestones. The year has been defined by the emergence of previously inaccessible on-chain financial primitives, the narrowing gap between DeFi and Centralized Exchange (CEX)-like experiences, increased adoption by both consumers and institutions, and heightened protocol competition. Together, these developments are paving the way for DeFi to find product-market fit and deliver tangible impact in the real-world.
The stablecoins market experienced remarkable growth in 2024, reaching an all-time high market cap of US$205B and ended the year just slightly lower at US$204B, representing a 56.8% YoY increase. USDT, the leading stablecoin, saw a 50.2% increase in market cap but lost some market share to USDC, which grew by 82.4% and experienced a 3% absolute increase in market share. Ethena's USDe, launched in December 2023, quickly became the third-largest stablecoin with a market cap of approximately US$5.9B.
In 2024, the gaming sector experienced modest growth, with the total gaming token market cap increasing by 44%, underperforming the overall crypto market which grew by 96.2% YoY. Despite the relatively slower pace of growth, the Web3 gaming industry saw notable developments. The number of unique active wallets (UAWs) interacting with games increased by 580% throughout the year, reaching over 50 million by year-end. Additionally, hundreds of new titles were announced across major gaming ecosystems and platforms, with standout titles like "Off the Grid" bringing Web3 gaming into mainstream appeal for the first time.
Memecoins were the top performing crypto sub-sector in 2024 (+212%) and dominated mindshare. The top memecoins are split between Solana and Ethereum, although Ethereum still hosts the top three, including Dogecoin, which is in its fourth cycle. Solana has become the default memecoin trading chain, driven by a cohesive and unfragmented product suite and consistently cheap fees. The incredible growth of Pump.fun has also been key to the success, with the memecoin launchpad having seen 5.7M+ memecoins and over US$400M in revenue in 2024.
AI agents, initially sparked by Truth Terminal and $GOAT, have captured the market since October and become a dominant narrative. Infrastructure providers like Virtuals Protocol (G.A.M.E. framework) and ai16z (ElizaOS framework) have been key players. The first agents have largely focused around market commentary (aixbt) or entertainment (Luna, Eliza), with lots more in development. Swarms (groups of agents), the entry of web2 into AI agents, and the rapid development and anticipated trajectory of AI x crypto, are key areas to watch.
While speculation-driven SocialFi platforms initially spurred user growth, 2024 became a year of consolidation for Decentralized Social (DeSoc). Daily UAWs fell from a peak of 35.0M in July to 11.3M by year-end, underscoring the persistent challenges of user retention for DeSoc products. However, dApps on social networks like Farcaster showed steadier growth, emerging as bright spots in the sector. These platforms shifted toward developer-centric value propositions — focused on front-end composability, distribution, and integration into existing UX through products like Frames and Blinks — which could play a key role in driving adoption in 2025.
DePIN has demonstrated real-world applications in areas such as compute, telecommunication, and energy, attracting notable interest and investment. Despite a diverse landscape with 249 projects, some DePIN initiatives face challenges in generating meaningful revenue, indicating varying levels of demand.
Web3 projects attracted a total of 1,432 investments, amassing a collective capital of US$9.2B in 2024. Of this, nearly US$4B was invested in infrastructure projects, accounting for around 44% of total funds raised in 2024. This was followed by DeFi with US$1.5B (16% of funds raised) and Games with US$0.8B (9% of funds raised).
In 2025, eight key themes are particularly exciting to us, and we anticipate significant progress in these areas throughout the year. These themes span various narratives and sectors, such as those related to the macro environment, Bitcoin ecosystem, artificial intelligence (AI), yield-bearing stablecoins, and more.
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