2024 Marks the Crypto Boom: Transitioning from Bitcoin ETFs to Meme Tokens
As the finest year in cryptocurrency's history draws to a close, it's worth looking back at how it went and where it leaves us for 2025. Bitcoin was the star performer this year. It began with regulatory approval of spot Bitcoin ETFs from major players like Blackrock, Fidelity, and other top institutions, recognized by the U.S. Security and Exchange Commission (SEC).
April saw the fourth Bitcoin Halving, followed by the introduction of options contracts on spot Bitcoin ETFs, which catalyzed mass adoption. Lawmakers in both the United States and Russia proposed setting up strategic Bitcoin reserves, and then, the big breakthrough, Bitcoin surpassed the anticipated $100,000 mark in early December.
However, 2024 wasn't only about Bitcoin's success. It was also about significant advancements and innovations in key infrastructure, with Layer-2s, Real-World Assets (RWAs), and Crypto AI seeing substantial growth. Stablecoins, the game-changer in digital assets, delivering the fiat on and off-ramps to Web3.0, exploded in 2024, with numerous new issuers and a market cap exceeding $200 billion. Memecoins also had a standout year, garnering significant interest from retail users and investors.
Both retail and institutional interest led to widespread growth in the industry in 2024, paving the way for new use cases and addressing real-world problems.
Establishing the Basis of Crypto Finance
Bitcoin ETFs boasted a market cap of over $132 billion, and saw substantial inflows after Donald Trump's election victory as the U.S. President.
2024 also marked a shift in political winds and the rise of a pro-crypto administration in the U.S. The appointments of David Sacks as AI and crypto czar, and Bo Hines to the Presidential Council of Advisers for Digital Assets, chaired by Sacks, are shaping up 2025 swiftly.
Paul Atkins will step into the SEC Chair role, replacing Gary Gensler, and Brian Quintenz, a16z's crypto policy lieutenant, is expected to join as well. These developments suggest that the U.S. is aiming to establish dominance in the crypto sector on a global scale.
Ryan Chow, co-founder and CEO of Solv Protocol, said, “The approval of Bitcoin ETFs has elevated the asset class to an institutional-grade investment. Besides the resulting influx of liquidity and positive price movements, Bitcoin ETFs have heightened Bitcoin's popularity. It's not surprising that Bitcoin DeFi has witnessed over $3 billion in TVL despite its early stage development.”
AI emerged as a leading theme alongside Bitcoin, capturing crypto's attention with an all-time high of 48 percent by November. The crypto-AI sector now has a market cap of over $34 billion, with promising growth potential.
Tiancheng Xie, co-founder and CTO of Polyhedra Network, explained, "AI's main challenges revolve around trust, transparency, and accountability. By integrating blockchain and specifically zero-knowledge proofs, we can ensure verifiable data, fair compensation for contributors, and a trustless developer ecosystem, thereby fueling scalable innovation in a more trustworthy environment.”
According to a16z's Builder Energy dashboard, crypto developers are heavily investing in AI, with over 34 percent of projects using AI in 2024. The dashboard also reveals that building blockchain infrastructure is the second most popular category, with over 19 percent of developer focus this year.
Ben Wynn, CMO at House of ZK, echoed how infrastructure development has been a major focus for the industry, aiming to expand overall capacity. He said, "Blockchain development continues to grow significantly, with over 23,000 monthly active developers worldwide in 2024 - representing a roughly 40 percent annual increase since 2015 - and ZK is evolving even faster, with over a 50 percent annual growth rate over the previous four years. ZK deployments have surged from 40 in 2020 to approximately 640 in 2024 - a 16x increase - as it transitions from theoretical use to practical implementation, and it is becoming increasingly recognized as the solution for tackling pressing challenges like scalability, privacy, interoperability, and more.”
"Its potential to revolutionize every aspect of blockchain is clear, and with adoption rapidly accelerating, we expect developer activity in ZK to grow exponentially in the coming years."
Overall, improvements in infrastructure behind the scenes are having a considerable impact on onboarding new users to crypto.
Bringing Crypto to the Mainstream
In September 2024, a record-breaking 220 million wallet addresses interacted with a blockchain at least once, marking the highest engagement level in crypto's history. On average, there are 30-60 million monthly active crypto users currently, which corresponds to around 5-10 percent of the 617 million global crypto owners.
The surge in on-chain interactions has largely been driven by Solana, NEAR, and Base. Notably, Solana and Base also head the list of chains in developer interest. Meanwhile, Base, with a 10.7 percent developer interest, features some of the most popular memecoin projects like Brett and Goose.run, driving user adoption.
Memecoins currently have an estimated market value of around $130 billion, despite the ongoing controversies surrounding this asset class. Various analysts view the unexpected surge of memecoins in 2024 as either a speculative craze or an anomaly, while others see it as the culmination of digital culture and the effective utilization of speculation as a case study. At Consensys 2024, Riva Tez of LayerZero Labs stated that memes have been instrumental in crypto winning the "battle of narratives."
Similarly, Momin Saqib, acting as Brett's ambassador, highlighted the memecoin narrative by stating, "Memecoins encapsulate the ethos of the internet – fun, inclusive, and dynamic. Their communities offer a rare sense of belonging in an era marked by emotional detachment and loneliness. Brett, for me, serves as a beacon of connectivity, uniting people through humor, lively communities, and shared experiences. It has morphed into a movement that transforms digital engagement into joy, purpose, and inclusivity while driving tangible impact through its charitable initiatives in water and education."
Ryan, a core contributor to Goose.run, further outlined how memecoins create new and lucrative wealth-generating opportunities by monetizing meme virality. He suggested that if memecoins remain isolated in speculative trading, they will miss out on untapped liquidity. He proposed the creation of Meme Finance (MemeFi) to leverage memecoins in DeFi and maximize their utility.
Regardless of being non-blue-chip assets, memecoins have become the second-most popular category dominating market narrative mindshare. Drew Cohen, the marketing head of GME on Ethereum, views the remarkable success of memecoins as a rebellion against VC-backed coins.
Cohen explained, "Retail investors are often denied fair entry points into VC-backed tokens due to their high valuations at launch. Memecoins create an equal opportunity for everyone to participate, challenging VCs as gatekeepers of crypto finance. Thus, memecoins empower the masses."
Hatu Sheikh of Ape Terminal also underscored the significance of retail investors in the crypto economy, stating, "For an industry to thrive, the general public must invest in its projects. Institutional investors can contribute to some extent, but they are not sufficient. Projects require a strong and diverse user base who will invest and promote the projects in the long run."
As 2024 nears its end, there has been a concurrent increase in the value of bitcoin, infrastructure investment, institutional liquidity, and memecoins. For the first time in fifteen years, there seems to be no single winner – it's a victory for all, showcasing a unique and distinct shift.
In the evolving landscape of cryptocurrency, David Sacks was appointed as the AI and crypto czar, and Bo Hines joined the Presidential Council of Advisers for Digital Assets, signifying a pro-crypto administration in the U.S. This shift led to the approval of protocol tokens through Bitcoin ETFs, expanding their market cap to over $132 billion.
Moreover, memecoins gained significant traction in 2024, accumulating an estimated market value of around $130 billion. David Sacks' role could potentially impact the future of memecoins, as well as the broader crypto market, shaping the trajectory for 2025 and beyond.
