It’s a brand new year, and the crypto market is celebrating in style as Bitcoin reclaims the $45,000 mark for the first time since April 2022. With much to cheer, as investors anticipate spot Bitcoin ETF approvals by the US SEC soon, the market is gearing up to break the shackles of the bear market conditions that weighed it down over the past few months. As the momentum and upbeat sentiment build up, here are a few handpicked trends we believe could power the next bull run in the crypto market:
1. Growth in the Bitcoin Ecosystem Amid Bitcoin Halving, Spot Bitcoin ETFs, and More
In 2024, the Bitcoin ecosystem is poised for significant growth, fueled by the anticipated Bitcoin halving event, a phenomenon that traditionally triggers a surge in Bitcoin’s value. This optimism is further bolstered by the anticipated approvals of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC). This landmark decision paves the way for mainstream investment in Bitcoin.
The Bitcoin NFT market is also poised for growth, potentially exceeding 100x, while the Lightning Network is set to facilitate broader Bitcoin payment adoption. Several analysts and institutions predict that Bitcoin’s price could reach $100,000, and ORDI could rank among the top cryptos by market cap. ORDI, a Bitcoin network-based memecoin, is projected to grow exponentially despite challenges from the Ordinals protocol, which has led to higher gas fees.
The protocol, however, boosts Bitcoin miners’ earnings and supports the BRC-20 asset class. The growth of Bitcoin Ordinals, BRC-20 tokens, ARC-20 tokens, and the Lightning Network’s increasing significance indicates a shift in the digital finance landscape and underscores the importance of diverse digital assets within the Bitcoin ecosystem.
2. Focus on the Ethereum Layer-2 Ecosystem as Ethereum 2.0 Nears
Moving past the crypto king to the second-largest crypto in the market, the spotlight in the crypto market is increasingly turning towards Ethereum and its Layer-2 networks, especially in the wake of the highly anticipated Ethereum 2.0 upgrade. This landmark upgrade, marking the transition to a Proof-of-Stake (PoS) consensus mechanism, is poised to enhance Ethereum’s scalability, efficiency, and sustainability significantly. Post-upgrade, Ethereum’s transaction throughput is expected to leap from its current 30 transactions per second to potentially thousands, alleviating network congestion and reducing gas fees – a critical factor for user adoption and network growth.
Layer-2 solutions, such as Optimism and Arbitrum, which already play a pivotal role in scaling Ethereum by offloading transactions from the main chain, are set to benefit immensely. These networks are forecasted to see an exponential increase in both user activity and transaction volume, as indicated by recent data showing a 50% surge in Layer-2 transactions within just a few months after the Ethereum 2.0 announcement.
Most recently, MetisDAO introduced a $360 million incentive program, the Ecosystem Development Fund (EDF), to stimulate user engagement and projects within the ecosystem. Metis, a Layer-2 network of Ethereum, saw its native token $METIS’s price surge by over 350% in just two weeks, with notable upticks over the past seven days following this announcement.
3. Cross-Chain and Interoperability to Get More Attention
In 2024, the advancement of cross-chain and blockchain interoperability is anticipated to revolutionize blockchain integration, driven by the need for seamless data exchange across various platforms to streamline processes and reduce operational costs. Despite most enterprise blockchain applications operating on private networks like Hyperledger and Corda, there’s a shift towards public networks such as Ethereum, which is evolving into a 2.0 proof-of-stake network to address issues like network clogging.
The market recognizes the importance of interoperability, with cross-chain solutions becoming central. However, current solutions like bridges pose security risks, as evidenced by 50% of all blockchain exploits in decentralized finance (DeFi) in 2022 being bridge-related. To address these challenges, the industry is exploring secure interoperability solutions like Ferrum Network’s Quantum Portal, a multichain messaging engine that allows Ferrum smart contracts to be deployed on multiple chains. This progress in cross-chain and blockchain interoperability could lead to greater public blockchain adoption, more efficient cross-chain transactions, reduced tribalism in the crypto industry, and a more interconnected and robust digital economy.
4. Beyond Bitcoin’s BRC-20: Inscriptions Drive On-Chain Activity in Other EVM Blockchains
The trend of inscriptions, initially popularized by Bitcoin’s Ordinals protocol, has expanded rapidly to other blockchain ecosystems by 2024, notably Ethereum Virtual Machine (EVM) chains, driving them to new transaction volumes and throughput records. Leading EVM chains like Arbitrum and BNB Chain have seen a surge in daily transactions per second (TPS) due to inscription activities, with 83% to 97% of transactions being inscriptions. This trend extends to other platforms like Fantom, Celo, Avalanche, and Polygon.
Ethereum has also embraced this trend with the launch of “Ethscriptions,” a new protocol for minting NFTs and other digital assets, which saw nearly 30,000 creations within 18 hours of its launch. However, the popularity of inscriptions has led to increased gas fees due to the demand for block space, with a record $8.3 million spent in a single day across EVM chains, highlighting the need for scalable solutions to manage this growing demand.
5. Mainstream Adoption of Blockchain, Powered by DePIN and RWA Tokenization
In this year, Decentralized Physical Infrastructure Networks (DePIN) and the tokenization of real-world assets are two key trends driving the mainstream adoption of crypto and blockchain technology. DePIN, the next evolution of the Internet of Things (IoT) in the Web3 ecosystem, enables decentralized ownership and monetization of user-operated physical infrastructure, transforming traditional models with blockchain technology and crypto-economic protocols. IoTeX, a leader in this field, is advancing DePIN through its projects and infrastructure offerings.
Concurrently, the tokenization of real-world assets is enhancing liquidity, transparency, and accessibility by converting physical assets into digital tokens on the blockchain. The convergence of these trends with DePIN is creating an interconnected ecosystem where physical infrastructure can be efficiently managed, and real-world assets can be seamlessly integrated into the digital economy, contributing significantly to the broader adoption of blockchain technology.
6. AI and Blockchain: Expect More AI-Powered Crypto Projects
The fusion of artificial intelligence (AI) with blockchain technology is transforming the crypto industry by enhancing efficiency, security, and functionality. This trend is evident in the development of decentralized AI marketplaces, which democratize access to AI resources by facilitating the sourcing of data and compute resources necessary for AI projects. Companies like Microsoft are investing heavily in this area.
Additionally, generative AI, exemplified by platforms like ChatGPT, is making significant inroads into the blockchain domain. It’s being used to automate and enhance various aspects of blockchain technology, including smart contract coding and execution. By utilizing natural language processing abilities, generative AI assists developers in writing and testing code, identifying issues, suggesting improvements, and automating smart contract execution, enhancing execution efficiency and reducing transaction costs.
7. Stablecoin Supply, Adoption of New Coins to Tick Higher
The stablecoin market has been witnessing a significant surge in supply, reaching a milestone of $132 billion. This growth trend, outpacing other market segments, indicates an uptick in stablecoin adoption globally, and it’s projected to rise even further in 2024. The increase in the stablecoin supply by $9.5 billion over 30 days reflects the growing preference for the stability and reliability of stablecoins in the volatile crypto market. This trend is further exemplified by the entrance of three stablecoins – USDT, USDC, and DAI, into the top 20 coins by market capitalization.
The stablecoin market is also expanding with the introduction of new stablecoins like First Digital USD (FDUSD) and PayPal USD (PYUSD). FDUSD, issued by First Digital Labs and backed by U.S. dollar reserves or high-quality assets held in regulated Asian financial institutions, combines the stability of the U.S. dollar with the reliability of Asian regulation. Similarly, PayPal’s PYUSD, another addition to the stablecoin market, has been developed on the Ethereum (ERC-20) platform. These new entrants are not only diversifying the stablecoin options available to users but also enhancing the overall market cap and adoption rate of stablecoins.
8. GameFi and NFTs to Make a Comeback
The GameFi and NFT sectors are set for significant growth in 2024, driven by the development of AAA Web3 games and an increase in NFT trading volumes. The release of highly anticipated blockchain games could attract tens of millions of gamers to Web3, with titles like “Dead Drop” and “Off The Grid” redefining perceptions of blockchain games through high production values and engaging gameplay. The focus within GameFi is shifting towards enhancing gameplay quality, moving beyond the initial wave of titles that prioritized blockchain mechanics.
The casual Web3 gaming space, particularly mobile games, is expected to see the most activity, introducing a vast number of gamers to GameFi. This trend is supported by regions like Asia, which have shown greater acceptance of GameFi technology and related NFTs. The Undeads metaverse, a AAA survival game, exemplifies the new era of Web3 gaming that combines engaging gameplay with blockchain technology.
9. Memecoins Reclaim the Limelight, Thanks to Inscriptions and Ordinals
In 2024, the crypto market is experiencing a resurgence in memecoin popularity, extending beyond the Ethereum ecosystem into other blockchain networks like Solana and Avalanche. Solana-based memecoin Bonk (BONK) exemplifies this trend, with an over 1,300% growth in market cap in one year, surpassing fellow memecoin Pepe to become the third-largest memecoin. Bonk’s rapid growth has outpaced established dog memecoins like Shiba Inu (SHIB) and Dogecoin (DOGE).
Similarly, Avalanche has embraced memecoins, with tokens like Coq Inu (COQ) achieving substantial gains. The rising popularity and trading volume of these memecoins across various blockchain ecosystems indicate a broader acceptance and interest in memecoins, reflecting the dynamic and evolving nature of the crypto market.
10. DeFi Clawing Back TVL, Powered by Liquid Staking Activities
The DeFi sector is set for significant growth in 2024, driven by the rising popularity of liquid staking derivatives (LSDs) and advancements in tokenization. The integration of LSDs, particularly in Ethereum and Solana ecosystems, is transforming staking activities, offering increased flexibility and yield opportunities. The upcoming Ethereum’s Shanghai upgrade is expected to stimulate the liquid staking sector, potentially leading to a DeFi boom similar to the one in 2020 following the introduction of Compound protocol’s COMP token.
Concurrently, the tokenization of real-world assets (RWAs) is enhancing liquidity, transparency, and accessibility, bridging the gap between traditional finance and DeFi. This shift towards tokenization could power much of DeFi’s expansion in 2024, with tokenized RWAs expected to see significant growth. As LSDs become more integrated and asset tokenization continues, the DeFi space will likely see a substantial increase in its Total Value Locked (TVL), indicating a more robust and dynamic market and opening the door to innovative DeFi protocol designs and investment opportunities.
Conclusion
The crypto market is on the brink of several transformative trends as we enter 2024, including the resurgence of memecoins in new blockchain ecosystems, the rise of GameFi and NFTs, and the integration of AI in blockchain projects. The popularity of DeFi is increasing, fueled by liquid staking activities on Ethereum and Solana and the tokenization of real-world assets, indicating a maturing market ready to bridge the gap between traditional finance and decentralized systems.
The growth in stablecoin supply, particularly FDUSD and PYUSD, aligns with the demand for stability in the volatile crypto market. The anticipated growth of the Bitcoin ecosystem, driven by the Bitcoin halving event and interest in Bitcoin Ordinals, marks an exciting phase for the largest cryptocurrency. In conclusion, 2024 is set to be a landmark year in the crypto industry, characterized by diversification, innovation, and increased adoption, signaling a maturing ecosystem ready to expand its influence and utility in the broader financial world.
