Article Authors: Gleb K, Kyrian Alex, Nick M, Igor K, Iraklis A
Source: Cointelegraph Research
Article Translation: Ada, MetaEra
Looking ahead to 2025, we believe there are seven key areas that will impact the market in the short or long term. Here, we analyze the development trends in these areas in detail and explore which subfields and regions may be affected and the reasons behind them.
1. Bitcoin Enters Mainstream Financial Sphere
2024 is undoubtedly a pivotal year in the development of Bitcoin. The official launch of the U.S. spot Bitcoin ETF marks an important milestone in the integration of Bitcoin into the traditional financial system since the birth of stablecoins a decade ago. This event not only signifies the rise of Bitcoin as a mature asset but also elevates discussions about Bitcoin as a global reserve asset from a niche group of enthusiasts to the mainstream view, opening a new chapter for it in the financial sector.
In 2024, Bitcoin first broke through the $100,000 mark. This was attributed to buying frenzies from listed companies like Strategy, which reportedly accumulated 257,250 Bitcoins in 2024. Meanwhile, the newly approved U.S. spot Bitcoin ETF accumulated over 500,000 Bitcoins in 2024. Coupled with the 619,000 Bitcoins held by Grayscale Bitcoin Trust, the total amount of Bitcoin held by ETF products has now exceeded 1 million.
Moreover, since Donald Trump spoke at the Bitcoin Nashville conference in July, discussions around national Bitcoin strategy have rapidly gained traction worldwide.
Under policy stimulus, Bitcoin continues to strengthen. Most analysts expect the current bull market to last until 2025, peaking in the third quarter. However, uncertainties still loom over the global economy; if a recession occurs, Bitcoin may be approaching its cyclical peak. Warning signals for such a recession could include a strengthening dollar, declining bond yields, and deteriorating U.S. employment data.
Analysis
For many years, Bitcoin has often been seen as a relatively stagnant and unattractive asset, while emerging altcoins in recent years appear more vibrant. However, in 2024, Bitcoin has regained its focus in the industry, a shift primarily reflected in three widely observed trends. First, the development of the Bitcoin ecosystem has reached a new peak. New sidechains have gone live, and Bitcoin staking technology has been implemented. Additionally, ZK-proof has been validated on the Bitcoin mainnet for the first time.
Additionally, with the launch and trading of the U.S. Bitcoin spot ETF and its related options, Bitcoin has attracted the attention of traditional capital markets, with its assets under management (AUM) exceeding 1.1 million Bitcoins, roughly equivalent to $100 billion. This effectively integrates Bitcoin with the world's most liquid capital pools.
Finally, as discussions about the U.S. strategic Bitcoin reserves heat up, the narrative of 'Bitcoin supremacy' has entered the mainstream political arena. Bitcoin, as a robust new currency system at its foundational layer, is gradually being taken seriously.
Throughout the development cycle, Bitcoin's dominance has continued its long-term upward trend that began at the end of 2022. Besides renewed investor interest in Bitcoin, this trend is widely attributed to the global tightening cycle that began in January 2022, which pushed the U.S. policy rate up to 5.5%.
As of the writing of this article, Bitcoin's upward potential appears to have reached its limit. Currently, stablecoins alone account for 17.5% of the total market capitalization of cryptocurrencies, while Bitcoin's market share is nearing 60%. However, if persistently high inflation leads to sustained high interest rates, or if a hard landing occurs in the global economy, Bitcoin's dominance is likely to remain high, and the long-anticipated rotation of altcoins may not happen. Earlier in the first half of December, there were strong market expectations for a full altcoin season, but as Bitcoin's market share rebounded from 55% to 58%, those expectations have gradually faded.
2. Altcoins: A Full Explosion Still Needs Time
In 2024, the altcoin market faced numerous challenges. Bitcoin captured most of the institutional funds this year, while meme coins attracted retail investors' attention. Nevertheless, after a seven-month period dominated by Bitcoin, the market briefly entered an altcoin season in early December. However, Bitcoin's market dominance only slightly declined after peaking at 61% in mid-November. This indicates that the market has not completely shifted to an altcoin-dominated scenario.
From the data, the total market capitalization of altcoins (excluding stablecoins) increased by 76% in 2024, surpassing the historical high of 2021. This growth was primarily driven by the strong performance of major coins, with meme coins recording the highest gains among all altcoin categories. According to DeFiLlama, the weighted average return of 900 meme coins tracked exceeded 1600%, highlighting the outstanding performance of meme coins in 2024. Although Bitcoin's dominance in the market has loosened, the overall market landscape has not fundamentally changed, and a full explosion of altcoins still requires time.
Analysis
The arrival of this small altcoin season is mainly due to the strong performance of major coins, particularly Solana (SOL), Ripple (XRP), Sui (SUI), and The Open Network (TON). Solana, Sui, and TON have attracted considerable attention from meme coin traders and retail investors, significantly increasing on-chain activity. Meanwhile, XRP surged 300% after Trump's election.
Driven by this strong performance, these tokens realized significant price increases, enhancing their dominance relative to the broader altcoin market. Some new tokens appeared with valuations in the billions, leading to a slight decline in Bitcoin's dominance at the end of 2024 (e.g., HYPE, ENA).
From a sector analysis perspective, meme coins were the best-performing category of altcoins in 2024. Based on market capitalization weighting, the price performance of 900 meme coins exceeded 1600% for the year. However, this figure does not include the numerous failed projects on platforms like Pump.fun or Moonshot. Of the 5.2 million tokens launched on Pump.fun, 98% failed and fell to zero.
Nevertheless, the proportion of meme coins in the total market capitalization of cryptocurrencies has risen to nearly 3%. Although this proportion remains relatively small, meme coins have attracted considerable attention from retail investors.
As retail investors focus on meme coins, while Bitcoin absorbs most institutional funds, technology-driven and venture capital-supported projects have significantly lagged behind. Whether in decentralized finance (DeFi) or smart contract platforms, the overall performance has not matched that of Bitcoin. Ethereum (ETH), as the traditional bellwether of altcoins, despite launching a spot ETF, still significantly underperformed Bitcoin. The poor performance of these projects can be attributed to Ethereum's poor market performance, lack of on-chain activity, and a tightening macroeconomic environment. Additionally, projects supported by venture capital have seen overall dynamics falter due to retail investors' disappointment with long-term lock-up arrangements and significant unlocks.
3. RWA Tokenization Grows 85% in 2024, Bridging Traditional Finance and Blockchain
In 2024, the Real World Assets (RWA) tokenization market experienced explosive growth, primarily due to ongoing advancements in blockchain infrastructure and rising institutional adoption. The total value of tokenized assets grew by 85% this year, surpassing the $19 billion mark. This milestone growth signifies a new phase of deep integration between traditional finance (TradFi) and decentralized technology. Notably, a surge of new issuance projects in areas such as tokenized credit, real estate, and tokenized Treasury bonds has become the key driving force of market growth.
In 2024, the RWA tokenization market realized significant growth, with a total value surpassing $19 billion (excluding stablecoins). Among them, private credit accounts for the largest share, followed by tokenized Treasury bonds and real estate. Ethereum and ZKsync Era together hold over 80% of the RWA tokenization market share.
In 2024, the European Investment Bank issued tokenized digital bonds worth $100 million on Ethereum. This project demonstrates the feasibility of blockchain technology in compliance with high-value financial instruments.
According to the latest market forecasts, the RWA tokenization market is expected to achieve significant growth by 2025. Bitwise predicts that the RWA tokenization market will reach $50 billion by 2025. This growth is primarily driven by the expansion of tokenized bonds and real estate.
By 2030, if the RWA tokenization market maintains its current compound annual growth rate (CAGR), its size could reach $13 trillion. This trend not only reflects the accelerated integration of traditional finance with the crypto market but also demonstrates institutional investors' widespread recognition of RWA tokenization.
Analysis
In 2024, the RWA tokenization market experienced strong growth, with a total value nearing $20 billion. Among them, the market value of tokenized U.S. Treasury bonds surpassed $3.9 billion, nearly a 400% increase compared to the same period last year, becoming the main driver of market growth. This growth is primarily attributed to the high-yield environment, with the Federal Reserve maintaining the federal funds rate around 4.4% for most of 2024, keeping short-term Treasury yields at high levels and attracting a significant number of investors.
Thus, tokenized Treasury bills (T-bills) are highly attractive to both institutional and retail investors, especially in the context of seeking stable and risk-adjusted returns. Asset tokenization and fragmentation have significantly lowered investment thresholds, reducing the minimum purchase requirement for traditional Treasury bonds from $100 to $10 post-tokenization. This low barrier to entry enables more investors to participate, further driving market activity.
In 2024, tokenized real estate attracted considerable attention in Asia and the UAE, primarily due to advancements in regulatory policies and increased interest from institutional investors. In Japan, Kenedix successfully completed its 12th real estate securitization token issuance (STO), targeting 484 rental properties in the Tokyo area. Meanwhile, Mitsui Bussan Digital Asset Management tokenized three residential properties valued at 1.7 billion yen. In Dubai, real estate giant MAG collaborated with Mantra to tokenize luxury properties worth $500 million. These projects have significantly boosted the total market value of tokenized real estate, achieving an annual growth rate of 50%, surpassing $4 billion.
Technological advancements have also provided strong support for RWA tokenization. Ethereum's 'Cancun' upgrade (which introduced EIP-4844, or 'proto-danksharding') and further optimizations of Layer-2 networks have reduced on-chain transaction costs by over 50% compared to 2023. This has made the issuance and trading of tokenized assets smoother, significantly boosting the activity in the secondary market for RWAs. Platforms focused on private credit (like Securitize) reported generating over $1 billion in secondary market trading volume in 2024.
4. DePIN and AI Achieve Explosive Growth, While DeSci Lags Behind
In 2024, DePIN (Decentralized Physical Infrastructure Network) projects experienced revenue growth of over 100 times, reaching $500 million annually. The total number of DePIN devices surpassed 13 million. Meanwhile, the market value of AI agents grew 222% in the fourth quarter, climbing from $4.8 billion in October to $15.5 billion in December. Among the three emerging technology sectors, DeSci (Decentralized Science) exhibited the slowest growth. Currently, the two dominant projects in this field—the BIO protocol and OriginTrail—account for 50% of the total market value in this sector.
If application scenarios become clearer, emerging technologies are expected to achieve deeper integration with mainstream industries by 2025. Cross-domain innovations, such as the combination of AI and DePIN, may dominate as they present the best growth opportunities. AI agents will play a key role in content creation, while DePIN networks will expand into the RWA market, although DeSci may encounter resistance from the traditional academic community.
Analysis
In 2024, the DeSci field continues to expand its influence, with the BIO protocol and Origin Trail (TRAC) reaching market capitalizations of $440 million and $320 million, respectively. Together, they account for over 50% of the DeSci market share, with the total market value of the field being approximately $1.43 billion. To promote community engagement, the BIO protocol employs a curation system, allowing community members to vote on which projects to prioritize, ensuring resources flow to the most promising and important scientific initiatives.
This model aims to reduce reliance on centralized institutions and build a more transparent and accessible system for sharing and verifying scientific data. OriginTrail's decentralized knowledge graph has been more widely adopted in supply chain management and AI-driven applications. The valuations of these projects continue to rise, reflecting an increasing recognition of DeSci's potential to reshape the future of scientific research through blockchain infrastructure.
Despite DeSci exhibiting tremendous potential, the field is likely to struggle to break through the niche market limitations in 2024 due to issues with incentive mechanisms and funding structures. A typical example is ResearchHub, a decentralized science platform aimed at helping researchers monetize their findings through a token incentive mechanism.
(Nature) magazine noted that some reviewers earn more on ResearchHub than in academia. The platform encourages more activity through a token incentive mechanism, but this model promotes participation rather than enhancing research quality. This raises concerns that academic standards may be overlooked due to economic interests.
Funding constraints also hinder the expansion of DeSci. While projects like Amino Chain raised $5 million and Lab DAO secured $3.6 million, these figures seem trivial compared to traditional R&D costs. Deloitte estimates that the cost of developing a new drug can reach as high as $2.3 billion, with no guarantee of market success.
Unlike biotechnology and pharmaceutical companies that operate within established intellectual property frameworks and attract massive institutional funds, DeSci still relies on a volatile token market and decentralized community funding. This makes it less suitable for long-term, capital-intensive research, such as drug development or large-scale physical experiments.
Nevertheless, DeSci may still hold value for small, early-stage research projects, especially in areas that often struggle to obtain institutional funding. By crowd-sourcing resources and providing decentralized data access, DeSci can support independent laboratories, open-source drug development, and research fields that are often overlooked under traditional models due to funding shortages. While token-based financing may not replace large-scale grants, it offers researchers an alternative avenue to seek new funding outside of academia and corporate R&D.
Similar decentralized financing models have driven rapid expansion of DePIN in 2024, with the number of connected devices exceeding 13 million. Over 20 projects have 100,000 active nodes, with five projects surpassing 1 million active nodes.
This growth has attracted support and venture capital from major institutions such as Pantera, Multicoin Capital, and Coinbase. Borderless Capital's $100 million DePIN fund has received backing from Peaq and the Solana Foundation, further boosting confidence in decentralized infrastructure. Render Network has become one of the leading DePIN projects, providing decentralized GPU computing services, surpassing a market value of $3.5 billion. Meanwhile, Helium Network also experienced rapid growth, processing 88,000 GB of data from U.S. mobile carriers by the end of the third quarter, a growth of 10,202%. Its Helium Mobile service has also made significant progress, attracting 116,000 users subscribing to unlimited call and text services.
Another prominent project, Grass, expanded decentralized internet sharing infrastructure, allowing users to monetize unused bandwidth for artificial intelligence model training. By the end of 2024, Grass had over 2.5 million nodes run by users and launched a major airdrop campaign, distributing 10% of its token supply to 1.5 million users, driving the Grass token up over 317%.
In addition to digital infrastructure, DePIN has begun to reshape traditional industries, particularly electric vehicle charging networks. Unlike Tesla's proprietary supercharging network, companies like ChargePoint and Electrify America adopt the DePIN model, allowing multiple investors and partners to fund and expand the charging network. This decentralized approach ensures a wider distribution of charging stations, enhances accessibility for electric vehicle owners, and creates a more balanced and competitive market.
As DePIN begins to reshape infrastructure, AI agents have completely revolutionized the automation field in 2024. In just a few months, the market value of AI agents skyrocketed 222% in the fourth quarter, reaching $15.5 billion. Solana rapidly rose to prominence with this trend, capturing 56.48% of the market, equivalent to $8.44 billion.
Among them, Virtuals.io has become one of the most successful cases in AI agent projects. The platform launched an AI agent launchpad with a built-in co-ownership model. Users can create, deploy, and tokenize entertainment-focused AI agents on the platform, each supported by a dedicated token. Through initial agent offerings (IAOs), the platform issued 1 billion native tokens, which users can purchase, trade, and participate in governance.
The system incentivizes community users to develop AI by awarding VIRTUAL tokens to the top-performing AI agents. Luna, as one of the most outstanding AI agents on the Virtuals.io platform, has become a fully autonomous internet celebrity. It has amassed over 500,000 TikTok followers by generating AI-driven content and continuously interacting with users.
Luna's success provides strong evidence for Virtuals.io's business model. It shows that AI agents can continuously generate income through affiliate marketing, brand sponsorships, and token buyback mechanisms.
5. Cryptocurrency Stocks: Mixed Performance
In 2024, the performance of cryptocurrency stocks was a mixed bag. Some companies outperformed Bitcoin, while others lagged significantly behind. MicroStrategy, thanks to its aggressive Bitcoin investment strategy, saw its stock price soar by 400%, making it the most prominent 'dark horse' in the industry. Marathon Digital also achieved commendable results by emulating MicroStrategy's strategy and successfully raised $1 billion through the issuance of convertible preferred notes.
However, most mining companies have underperformed after the Bitcoin halving. Looking ahead to 2025, the outlook for the cryptocurrency industry largely depends on macroeconomic conditions and whether the Trump administration will implement supportive policies.
If President Trump continues his friendly stance towards cryptocurrencies and actively promotes policies and legislation to reduce regulatory barriers, the stock performance of cryptocurrency miners and related companies is likely to improve. Furthermore, as the global shift towards renewable energy accelerates, Bitcoin mining companies adopting sustainable strategies may attract more investment and achieve better financial performance in 2025.
Analysis
MicroStrategy has stood out with its aggressive Bitcoin investment strategy, resulting in a stock price increase of approximately 400%. The company has successfully attracted significant investor attention through strategic debt financing and accumulation of Bitcoin.
Moreover, hedge funds are increasingly utilizing MicroStrategy's convertible bonds for arbitrage, profiting from the volatility of its underlying assets by shorting the stock. This indicates that the company's performance is closely tied to Bitcoin's price, presenting both opportunities and risks.
Marathon Digital (MARA) is the first Bitcoin miner to emulate MicroStrategy's debt financing strategy. The company issued $1 billion in convertible preferred notes and raised $980 million in net proceeds through a private placement under Rule 144A.
In terms of fund allocation, $199 million was used for refinancing, repaying $212 million of MARA's convertible notes due in 2026, while the remaining funds were allocated for Bitcoin acquisitions, strategic expansion, and debt repayment. These convertible notes can be exchanged for cash or equity, with a 42.5% premium compared to MARA's stock price at issuance.
Additionally, MARA has deployed 7,377 Bitcoin through a lending program, accounting for 16% of its reserves, to generate income and manage costs. In 2024, this program helped cover operational costs by generating $3.9 million in the third quarter and $4.8 million in the first half.
However, as competition intensifies and costs rise, the profitability of Bitcoin miners is facing greater challenges. In the third quarter of 2024, the cost of Bitcoin mining rose significantly, with the weighted average cash cost reaching $55,950, up 13% from $49,500 in the second quarter. When accounting for non-cash costs (such as depreciation and stock compensation), the total cost per Bitcoin soared to $106,000.
Bitdeer Technologies and Bitfarms both faced severe challenges in 2024 due to rising costs and the impact of the Bitcoin halving event on their operations and strategic goals. However, their stock price trajectories were markedly different.
Despite reporting a net loss of $50.1 million in the third quarter of 2024, Bitdeer Technologies' stock price still rose over 165%. The company's electricity costs increased from $32 per megawatt-hour to $41, while R&D expenses surged to $24.8 million due to the development of the SEAL02 chip. These pressures caused its gross margin to drop from 24.2% to 4.5%, exacerbating financial strain.
Meanwhile, Bitfarms' stock price suffered a significant blow, dropping 48.4% throughout the year. Although its operational hash rate grew 97% in 2024, unexpected costs led to a decline in earnings.
Despite a 30% increase in company revenue, Bitfarms' gross margin still fell to 38%, while operating expenses surged 230% year-on-year. This resulted in a net loss of $36.6 million, significantly widening from a loss of $16.5 million in the third quarter of 2023. Similar to Bitdeer, Bitfarms has also identified rising electricity costs and increased network mining difficulty as primary reasons for declining profitability.
To achieve recovery, the company plans to upgrade 18,853 mining machines to Bitmain's S21 Pro model in early 2025. Additionally, Bitfarms has spent $125 million to acquire Stronghold Digital Mining, which includes two power plants located in Pennsylvania with a total installed capacity of 165 megawatts. Despite facing numerous challenges, Bitfarms still holds Bitcoin valued at $72.6 million and maintains total liquidity of $146 million, providing a buffer against rising costs.
6. Cryptocurrency Regulation: MiCA Reshapes EU Landscape, U.S. Opens Business-Friendly New Path
In the EU, the implementation of the MiCA (Markets in Crypto-Assets) framework has introduced strict compliance standards that remain consistent across member states. The new measures eliminate user anonymity and favor larger companies with established compliance departments, but they impose significant additional costs on smaller enterprises. In the U.S., since the departure of Gary Gensler, the SEC's crackdown on cryptocurrency companies has eased, while the Financial Innovation and Technology Promotion Act (FIT21) may limit the SEC's powers. These changes make the U.S. more attractive for cryptocurrency companies in the new year.
In 2025, small cryptocurrency enterprises in Europe may face numerous challenges and may even have to relocate their operations overseas. With the comprehensive implementation of the MiCA framework, the requirements for crypto asset service providers in the EU have become stricter, including establishing offices, adhering to anti-money laundering (AML) guidelines, and following rules for marketing materials. While these requirements bring legal certainty and stability to the market, the compliance costs may be too high for small enterprises, making it difficult for them to continue operating in Europe.
Meanwhile, the U.S. attitude towards cryptocurrency regulation is gradually shifting to be more friendly. Following the departure of SEC Chair Gary Gensler, his 'enforcement-style regulation' approach has come to an end, and the new government is expected to adopt more lenient regulatory policies. Additionally, the advancement of FIT21 may further limit the SEC's powers, distributing regulatory authority between the CFTC and the SEC. These changes make the U.S. more attractive for cryptocurrency companies in 2025.
Analysis
Starting December 30, 2024, the 'Travel Rule' for cryptocurrency transactions officially came into effect in the EU. This rule restricts cryptocurrency asset service providers (CASPs) from offering anonymous cryptocurrency transfer services within the EU. The 'Travel Rule' was initially introduced by the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) as part of a broader principle.
MiCA sets clear requirements for institutions providing crypto services and will enter the implementation phase in the EU in 2024. MiCA aims to unify the regulatory framework for cryptocurrencies across EU member states and provide a uniform license for the entire region. According to MiCA, crypto asset service providers must establish offices in the EU, comply with operational communication requirements, and implement data security services. In the transition phase, the regulation also requires CASPs to provide the full name, address, and additional identification information of the originator, and to record relevant information about the beneficiary regardless of the transaction amount.
The implementation costs of this rule are high, posing risks for smaller CASPs in the region. In contrast, in the U.S., UK, Switzerland, and Canada, the 'Travel Rule' only applies to transactions below a certain amount. In the future, as numerous countries like Australia and Mexico consider introducing the 'Travel Rule' under pressure from the U.S., the applicability of the rule may expand further. During the transition period, MiCA allows countries to choose a transition period of up to 18 months during which businesses can continue to operate under existing regulations. Most countries have opted for at least a 6-month transition period.
Last year, regulatory scrutiny of stablecoins became a global trend. In Europe, algorithmic stablecoins have been banned under the MiCA framework, while fiat-backed stablecoins are required to be fully collateralized by liquid reserves. Additionally, entities intending to issue stablecoins must obtain authorization before listing them. This tightening of regulation places USDT and other stablecoins in a gray area in the EU, and their future is expected to become clearer within the 18-month transition period stipulated by MiCA.
Apart from the European Union, Switzerland, the UK, the UAE, Hong Kong, and Brazil have also issued legislative directives regarding stablecoins. In the EU, stablecoin issuers are required to deposit at least 30% of their collateral in cash into segregated accounts at financial institutions.
7. DeFi Strong Recovery: With Market Recovery, Total Value Locked (TVL) Surges 118%
After a prolonged period of challenging development, the decentralized finance (DeFi) sector began to recover by the end of 2024. Previously, DeFi faced numerous challenges including regulatory uncertainties and downward market pressures. With a broader market recovery and advancements in liquid staking and restaking technologies, the total value locked (TVL) in DeFi increased by 118%, reaching $185 billion. Decentralized exchanges (DEXs) also reflected this recovery trend, with trading volumes increasing by 165%.
The trading volume of decentralized derivatives exchanges (Derivative DEXs) increased by 328% year-on-year from January to November 2024. This reflects a resurgence of speculative activity in the context of improved market conditions. Additionally, the number of trades on leading Layer 2 networks Arbitrum, Base, and Optimism quadrupled over the past year.
According to a recent report by VanEck, the DeFi sector is expected to achieve transformative development in 2025, with total value locked (TVL) projected to exceed $200 billion. This growth is primarily attributed to strong performance in liquid staking, restaking, and the lending market.
Additionally, the trading volume of DEXs is expected to grow significantly, likely exceeding $4 trillion and accounting for about 20% of the overall cryptocurrency spot trading volume. This trend reflects that as market conditions improve and technology advances, the DeFi sector is attracting more institutional participation and user attention.
Analysis
Liquid staking products have become a major highlight in the DeFi sector last year. The scale of related assets doubled from $30 billion in December 2023 to $60 billion in December 2024, now accounting for about 30% of the total value locked (TVL) in DeFi. This growth is primarily attributed to the excellent performance of leading platforms like Lido and Rocket Pool, as well as rapid growth in liquid staking on the BNB and Solana chains.
Meanwhile, liquid staking tokens (LSTs) and their derivatives are increasingly favored as collateral on lending and trading platforms, further driving this trend and making significant contributions to the overall industry growth.
Restaking technology—a significant innovation pioneered by EigenLayer—allows users to generate additional returns through secondary staking. This technology not only enhances the security of smaller blockchains but also facilitates cross-chain transaction processing and the development of oracles. As of the writing of this article, restaking accounts for about 14% of the total value locked in DeFi.
Currently, over 5 million ETH are locked in restaking, valued at approximately $17 billion, accounting for over 9% of Ethereum's total staked supply.
The rise of liquid staking and restaking is closely related to the scalability improvements within the Ethereum ecosystem, primarily due to enhancements in Layer-2 solutions and the introduction of EIP-4844. EIP-4844 aims to increase transaction throughput and reduce costs while also providing significant benefits to restaking protocols, successfully reducing their associated transaction costs by more than 90%.
DEXs also achieved significant growth in 2024. In December 2024, their monthly trading volume surpassed $350 billion, up 165% year-on-year. This growth is primarily attributed to the overall market recovery in the second half of the year and reduced on-chain transaction costs.
Additionally, trading activity on chains such as Solana, Base, and SUI/Aptos has also increased. DEXs like Orca, Lifinity, Aerodrome, and Cetus saw their trading volume share rise from less than 0.5% a year ago to about 15% in 2024. The ratio of DEXs to CEX (centralized exchanges) spot trading volume was about 14% in 2024, up from 9.5% a year ago.
Conclusion
2024 is a key turning point for the cryptocurrency industry. With the launch of the spot Bitcoin ETF listed in the U.S., Bitcoin is gradually entering the sight of traditional finance, marking a maturation of this asset class.
Despite attracting a large influx of institutional funds, the performance of the altcoin market has fallen short of expectations, with only meme coins delivering decent returns. The performance of cryptocurrency-related stocks has been mixed, reflecting the complex dynamics of the broader market, but companies like MicroStrategy and Marathon Digital have demonstrated the potential for strategic Bitcoin integration. Meanwhile, DeFi has made a strong recovery by year-end, laying the groundwork for significant growth and innovation in 2025.
The regulatory landscape has also undergone significant changes, particularly with the introduction of stricter compliance requirements under the EU's Markets in Crypto-Assets (MiCA) framework. Meanwhile, the U.S. has shifted to a more friendly approach towards cryptocurrency regulation, with potential limits on SEC powers and the emergence of a new government supporting cryptocurrencies, making the regulatory environment in the U.S. more favorable.
As these trends advance, the industry landscape may undergo significant changes. Many small European enterprises may shift their business focus overseas in search of a more accommodating policy environment, while the U.S. is expected to become a core hub for cryptocurrency companies due to its friendly regulatory stance and policy support.
In 2025, the cryptocurrency industry will usher in a year full of vitality and transformation. Bitcoin is expected to continue to hold its position as the flagship asset, while discussions surrounding its potential to become a global reserve asset will intensify. As the market enters a potential 'altcoin season,' altcoins are expected to regain growth momentum, breaking Bitcoin's dominance and opening new spaces for industry innovation. DeFi will also experience further expansion, with total value locked (TVL) expected to surpass the $200 billion threshold, and the share of DEXs in trading activities will further increase.
However, the future development of the industry still faces many uncertainties, and its trajectory will largely depend on the macroeconomic environment, the clarity of regulatory policies, and technological advancements, especially breakthroughs in key technology areas such as energy-efficient mining and blockchain interoperability.
