2024 marked the breakthrough of cryptocurrency from its specialized niche within the financial sector to a powerful player shaping the global tech and finance landscape. The year was characterized by unprecedented political backing, the surge of AI, RWA, and fierce blockchain competition, paving the way for many investors’ optimistic expectations of a prosperous 2025.
Amidst a world grappling with high inflation rates, Bitcoin’s price skyrocketed in the wake of its halving in April 2024. Surprisingly, this upward trend wasn’t solely driven by individual investors like Michael Saylor, but also by major players on Wall Street who invested through Bitcoin ETFs. The ripple effect extended to Washington D.C., where President-elect Donald Trump and various lawmakers openly expressed their support for cryptocurrencies.
As smart contract platforms competed for supremacy, Ethereum’s performance lagged behind as it faced increasing challenges from its competitors. In the realm of Web3, innovations in AI and RWA-linked tokens emerged as this year’s standout trends.
Bitcoin sets its sight on new price highs
By 2024, Bitcoin followed its usual trend after halving events, surging by approximately 126% due to increased acceptance and endorsement from conventional financial institutions and political figures.
The recent introduction of Bitcoin Exchange-Traded Funds (ETFs) has significantly reshaped the Bitcoin market, attracting new investments from both individual and institutional investors who are seeking a more straightforward approach to investing in Bitcoin.
As a researcher, I find it fascinating to reflect on a significant milestone that transpired in January 2024 – nine leading asset managers, among them the global titan, BlackRock, debuted their inaugural spot Bitcoin Exchange-Traded Funds (ETFs). Over the course of the year, the combined Assets Under Management (AUM) for these ETFs surged exponentially, escalating from a starting base of $27 billion (derived from the conversion of the existing Grayscale fund) to an impressive $109 billion. This rapid growth underscores the increasing interest and confidence in Bitcoin as a viable investment option.
2025 could see Bitcoin prices boosted if plans for a strategic Bitcoin reserve become reality. Longstanding Bitcoin proponent and U.S Senator Cynthia Lummis has proposed the BITCOIN Act, which, upon approval, would allow the U.S to acquire an extra 1 million Bitcoins. This additional purchase would serve as another valuable asset to strengthen America’s financial position.
As a researcher, I’ve been closely observing the potential of my proposed cryptocurrency legislation. The upcoming November elections have undeniably boosted its prospects. With the backing of Fairshake PAC, a significant player in the 2024 election cycle, spending an estimated $172 million, numerous pro-crypto candidates have managed to secure positions in both the Senate and House, even dethroning some anti-crypto incumbents. StandWithCrypto’s data reveals that a staggering 247 crypto-friendly candidates were elected to the House alone, and an impressive 15 in the Senate. Considering there were only 33 Senate seats contested in 2024, this is quite remarkable.
Rising competition in smart contract platforms
In terms of investment attention, Bitcoin is largely viewed as digital money, whereas other blockchain platforms are mainly used for creating smart contracts that facilitate the development of decentralized applications (DApps). Over time, these blockchains have been quietly enhancing their technology in 2024. For instance, Solana unveiled its Firedancer client to boost scalability, and Ethereum implemented the Dencun upgrade to reduce transaction costs on its layer-2 solutions.
As the market becomes progressively congested, it’s essential for blockchain technologies to adapt and innovate to draw in users and developers. The previous year demonstrated that even Ethereum, with its multitude of layer-2 solutions, might potentially lose its competitive advantage, given that faster and more affordable L1 blockchains such as Solana are rapidly catching up.
From a monetary viewpoint, this ambiguity led to a relatively modest increase in Ether (ETH) prices by 65% and a lukewarm enthusiasm towards Ether ETFs trading on the spot market. By 2025, the Pectra upgrade is expected to be integrated into the Ethereum network, allowing Externally Owned Accounts to execute smart contract code directly. This move brings Ethereum one step closer to full account abstraction, enhancing account flexibility and the overall user experience. Nevertheless, the worth of Ethereum—and any blockchain—ultimately hinges on the industry’s capacity to create practical real-world applications.
AI and RWA fuel Web3 growth
It seems that the primary expectation from Web3, which is a vision of a decentralized web, hasn’t been completely realized as of now. Nevertheless, the year 2024 witnessed several advancements that moved us closer towards this objective.
In 2024, it came as no shock that the most significant Web3 development was the progress made in artificial intelligence. Notable projects such as Render Protocol (up by 125%) and Bittensor (TAO up by 135%) were at the forefront, while Virtuals, an AI agent protocol, experienced staggering growth of over 33,000%. In summary, AI-related tokens reported a massive increase of 630% as per BlockchainCenter’s data for that year.
Following closely behind was the category of real-world assets, a trend that includes protocols focused on tokenizing tangible assets like stocks, debts, property, and art. Notably, Ondo Finance (ONDO +705%) and Mantra (OM +6,866%), a platform for structured financial products and a lending-borrowing DeFi protocol respectively, are at the forefront of this sector. Interestingly, Tether, a leading stablecoin, entered this trend by debuting its asset tokenization platform, Hadron, in November 2024. In total, tokens related to real-world assets saw a growth of 570%.
Well-established Web3 categories are progressively gaining traction too.
In a staggering 270% increase compared to last year, Decentralized Physical Infrastructure (DePIN) tokens stand out as frontrunners within the Web3 industry. Essentially, these tokens offer an opportunity for users, device owners, and businesses alike to jointly own and profit from digital infrastructure. Notable examples of DePIN include one of the earliest computation marketplaces, Filecoin (FIL), the streaming-centric platform Theta (THETA), as well as AI-utilizing protocols like Render and Bittensor.
2024 saw DeFi continue its upward trend, with its total value locked (TVL) nearing its all-time high of $250 billion by December 2024, as reported by DefiLlama. One remarkable debut that year was EigenLayer, a restaking protocol launched in April 2024. By the end of its first month, it had climbed to third place globally and accumulated more than $17 billion in TVL.
2024 saw a significant surge in the evolution of crypto gaming, boasting nearly 9 million distinct active wallets at year’s end – a substantial increase from the 1.3 million reported in 2023 (based on DappRadar data). High-profile releases such as World of Dypians and Seraph, coupled with the viral sensation Hamster Kombat on Telegram, contributed to this impressive growth spurt.
Moving forward, it seems that the progress made in 2024 will likely continue into 2025, fueled by a supportive administration for cryptocurrencies under President Trump, the persistent upward trend of Bitcoin, and constant innovations in blockchain technology.
This piece serves as a source of general knowledge rather than providing legal or financial guidance. It’s essential to remember that the perspectives presented within this article belong solely to the writer, and they may not align with the views of CryptoMoon as an organization.
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2025-01-14 21:49