Inventory of the 8 Current States of Cryptocurrency Development and 6 Narrative Trends

Author: @arndxt_xo

Compiled by: Baihua Blockchain

In this article, I will delve into 8 key states of the crypto industry, distilling important insights on market development and exploring 6 trends that are shaping the future trajectory of the crypto industry.

We will discuss everything from the rise of AI agents, to the resurgence of memecoins, to Bitcoin's consolidation and Solana's explosive performance.

Next, we will break these down into 8 important observations and 6 eye-catching trends, revealing key changes in the market.

8 States of the Crypto Industry

The following image is a brief summary of the contents.

1) The AI Agent Market Size Remains Relatively Small

Despite the market cap of Virtuals (an AI agent launch platform) soaring to around $4 billion, the total market cap of AI agents themselves is only about $1 billion. Although AI agents have recently been one of the hottest topics, there is still significant room for growth as adoption and attention continue to rise.

2) Surge in Trading Volume on Decentralized Exchanges (DEX) vs. Centralized Exchanges (CEX)

Perpetual DEXs are particularly popular, with more projects achieving billion-dollar valuations without relying on centralized exchanges for listing. This marks a significant step towards a truly decentralized trading ecosystem, showcasing the broader prospects of DeFi.

3) Rising Interest in Decentralized Science (DeSci)

Interest in decentralized science (DeSci) has significantly increased, attracting more developers and researchers. Although some narratives (such as liquid staking, BRC-20, modularity, L2, and RWA) have weakened, the rapid rise of DeSci may signal new innovation opportunities.

4) Declining Bitcoin Supply on Exchanges

The proportion of BTC (and ETH) on exchanges continues to decline, indicating that large holders and long-term investors are increasing their positions. A reduction in supply on exchanges typically alleviates selling pressure, thereby driving bullish momentum in the market, especially for Bitcoin.

5) Programmable Bitcoin via sBTC on Stacks

Stacks has launched sBTC, a 1:1 Bitcoin-backed asset designed to unlock approximately $2 trillion in Bitcoin liquidity for DeFi. Holders of sBTC can earn underlying yields (around 5% Bitcoin yield) and can borrow against it on platforms like Zest, with annualized returns of about 6%, and more investment opportunities are set to open up. This provides a practical way to "make Bitcoin work," potentially driving more Bitcoin-centric DeFi innovations.

6) Stablecoin Supply Surpasses $200 Billion Historical High

The supply of stablecoins has increased from $125 billion at the beginning of 2024 to $200 billion. The annual trading volume of stablecoins has surpassed that of Visa, continuing to demonstrate that they represent a burgeoning trillion-dollar opportunity.

7) Monthly Growth in Crypto Funding

Although still below the peak levels of 2021, the influx of investment capital has noticeably increased. Historically, capital inflows tend to occur at market tops, and the current growth trend suggests that we are still in the early stages of a growth cycle, not yet reaching a state of extreme market optimism.

8) Additional: The Rapid Rise of Solana

By December 2024, Solana generated $43.1 billion in transaction fee revenue in a short period, surpassing the total of all other L1s combined. Solana's activity is comparable to Ethereum across multiple key metrics, and the upcoming Firedancer upgrade may further enhance its scalability and network utilization. It is becoming increasingly clear that Ethereum and Solana can (and likely will) coexist in a multi-chain future.

6 Narrative Trends

1) Bitcoin Consolidation and Potential Bottom

Bitcoin has been trading in the range of $94,000 to $95,000, frequently dipping below $94,000 and touching $93,000, which has frustrated traders. Currently, Bitcoin's price hovers around $97,000. The recent accumulation near $94,000 suggests a potential bottom, but a retracement to $88,000 to $92,000 remains possible. If Bitcoin rises, altcoins are expected to perform better, similar to the bull market of 2021.

2) AI Agents Dominating Market Narrative

Key performers: VIRTUAL, an AI agent launch platform on the Base platform, doubled its market cap from $2.5 billion to $5 billion in just 10 days. Significant projects in the ecosystem include: AIXBT: a Twitter-based agent that grew from $300 million to $600 million. GAME: nearing a market cap of $400 million. AI16Z (based on Solana): increased from $1 billion to $2.5 billion. Other notable projects include $ZEREBRO ($800 million), $GRIFFAIN ($470 million), and $ARC ($400 million). AI agents are leading a new wave of innovation, attracting significant attention and investment.

3) The Return of Memecoins and Murad Coin

Emerging star projects: $$SPX$$ and $$GIGA$$ have both reached all-time highs, with $SPX surpassing $1 billion and $GIGA reaching an $800 million market cap. KEKIUS: saw its market cap soar to $400 million after Elon Musk changed his Twitter avatar, but quickly retraced by 75%. Memecoins like WIF, POPCAT, and FWOG have the potential for a resurgence.

4) Highlights in the Altcoin Market

Dinosaur coins: $$XRP (+15%)$$ and $$XLM (+35%)$$ continue to perform strongly. From Fantom to Sonic Network: $$FTM is rebranding$$, initially plummeting to $0.66 before rebounding, possibly indicating a potential long-term opportunity. CEXToken: BGB: has quadrupled since December, currently at a market cap of $7.5 billion. GT: has risen by 50% since December.

5) Noteworthy Performers and New Issuances

Fuel Network ($FUEL): a new L2 network showing strong potential. MORPHO: continues to set new highs. Other new coins worth noting: $$PEAQ$$, $$USUAL$$ (strong), VANA, XION (bouncing back).

6) Strange Price Volatility

UXLINK: extremely volatile, initially surging (+140%) before quickly retracing. MOCA: experienced a frenzy of surges and sell-offs after being listed on BN.

3 New Projects This Week

Finally, here are some emerging projects that you may want to follow up on for further insights.

@AlwaysBeenChoze

@marvellousdefi_

@Trong0322

@YashasEdu

@0xHvdes

@defiantdegen

@meekdonald_

@twindoges

@belizardd

@0xelonmoney

@0xAndrewMoh

@thesmartape

@andrewtalksdefi

@Foxi_xyz

@0xxbeacon

@Karamata2_2

@izu_crypt

@Mars_DeFi

@TheDeFiPlug

@cchungccc

@zordcrypt

@DeRonin_

@ahboyash

@Flowslikeosmo

@CryptoStreamHub

@stacy_muur

@crypthoem

@momochenming

@nihaovand

@0xcryptowizard

@Alvin0617

@0xWatell

@wsdxbz1

@Frogling68

@jackvi810