2025 Cryptocurrency Industry Report: Trends in Decentralized Finance and Cryptocurrency Outlook

1. Bitcoin Enters the Mainstream Financial Sector

2024 is undoubtedly a pivotal year in the development of Bitcoin. The official launch of the U.S. Bitcoin spot ETF marks an important milestone in the integration of Bitcoin with 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 shifts the discussion of Bitcoin as a global reserve asset from a niche group of enthusiasts to the mainstream, opening a new chapter for it in the financial sector.

In 2024, Bitcoin first broke through the $100,000 mark. This was driven by a buying spree from publicly 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. Combined with the 619,000 Bitcoins previously held by Grayscale Bitcoin Trust, the total amount of Bitcoin held by ETF products has now exceeded 1 million.

Additionally, since Donald Trump spoke at the Bitcoin Nashville Conference in July, discussions about a national Bitcoin strategy have rapidly gained traction globally.

With policy support, Bitcoin continues to strengthen. Most analysts expect the current bull market to last until 2025, peaking in the third quarter. However, uncertainties remain in the global economy, and if a recession occurs, Bitcoin may already be nearing its cycle peak. Warning signs of such a recession could include a stronger dollar, declining bond yields, and worsening U.S. employment data.

Analysis

For years, Bitcoin has often been viewed as a relatively stagnant and unattractive asset, while emerging altcoins have appeared more vibrant in recent years. However, in 2024, Bitcoin has regained the spotlight in the industry, a shift primarily reflected in three widely discussed 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.

Second, 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, approximately $10 billion. This fully 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 realm of mainstream politics. Bitcoin, as a robust new monetary system's foundational layer, is gradually being taken seriously.

Throughout its development cycle, Bitcoin's dominance has continued its long-term upward trend that began at the end of 2022. Besides the renewed interest from investors in Bitcoin, this trend is also widely attributed to the global tightening cycle that began in January 2022, which pushed U.S. policy rates up to 5.5%.

As of the writing of this article, Bitcoin's upside potential seems 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 high inflation leads to sustained high interest rates or if the global economy experiences a hard landing, Bitcoin's dominance will remain elevated, and the long-awaited rotation of altcoins is unlikely to occur. Earlier in mid-December, the market had strong expectations for a comprehensive altcoin season, but as Bitcoin's market share rebounded from 55% to 58%, those expectations have gradually faded.

2. Altcoins: Full Explosion Still Requires Time

In 2024, the altcoin market faced numerous challenges. Bitcoin absorbed most of the institutional funds this year, while meme coins attracted the attention of retail investors. 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 reaching a high of 61% in mid-November. This indicates that the market has not fully shifted to an altcoin-dominated scenario.

From the data, the total market capitalization of altcoins (excluding stablecoins) grew by 76% in 2024, breaking through the historical high of 2021. This growth was primarily driven by the strong performance of large-cap coins, with meme coins showing the highest gains among all altcoin categories. According to DeFiLlama, the weighted average return of 900 meme coins tracked exceeded 1600%, highlighting their outstanding performance in 2024. Although Bitcoin's dominance in the market has loosened, the overall market structure has not fundamentally changed, and a full explosion of altcoins still requires time.

Analysis

The arrival of this small altcoin season was mainly due to the strong performance of large-cap coins, particularly Solana (SOL), Ripple (XRP), Sui (SUI), and The Open Network (TON). Solana, Sui, and TON attracted a large number of meme coin traders and retail investors, significantly increasing on-chain activity. Meanwhile, XRP surged by 300% following Trump's election.

Driven by this strong performance, these tokens achieved significant price increases and enhanced their dominance relative to the broader altcoin market. Some new tokens also emerged with valuations in the billions, leading to a slight decline in Bitcoin's dominance by the end of 2024 (e.g., HYPE, ENA).

From a sector analysis perspective, meme coins were the best-performing altcoin category 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 numerous failed projects on platforms like Pump.fun or Moonshot. Of the 5.2 million tokens launched on Pump.fun, 98% failed and went to zero.

Nonetheless, the share 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 significant attention from retail investors.

While retail investors focused on meme coins and Bitcoin absorbed most of the institutional funds, technology-driven and venture capital-backed projects significantly lagged behind. Whether in decentralized finance (DeFi) or smart contract platforms, the overall performance was inferior to 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 several factors: Ethereum's lackluster market performance, a lack of on-chain activity, and a tightening macroeconomic environment. Additionally, venture capital-backed projects faced disappointing dynamics due to retail investors' dissatisfaction with long-term lock-up arrangements and large unlocks.

3. RWA Tokenization Grows 85% in 2024, Bridging Traditional Finance and Blockchain

In 2024, the market for tokenization of real-world assets (RWA) experienced explosive growth, primarily due to continuous advancements in blockchain infrastructure and increasing institutional adoption. The total value of tokenized assets grew by 85% this year, surpassing $19 billion. This milestone growth marks a new stage in the deep integration of traditional finance (TradFi) with decentralized technology. Particularly in areas such as tokenized credit, real estate, and government bond tokenization, a large number of new projects emerged, becoming key drivers of market growth.

In 2024, the RWA tokenization market achieved significant growth, with a total value exceeding $19 billion (excluding stablecoins). Private credit accounted for the largest share, followed by government bond tokenization and real estate. Ethereum and ZKsync Era together captured over 80% of the RWA tokenization market.

In 2024, the European Investment Bank issued tokenized digital bonds worth $100 million on Ethereum. This project demonstrated the feasibility of blockchain technology in compliance-heavy high-value financial instruments.

According to the latest market forecasts, the RWA tokenization market is expected to achieve significant growth in 2025. Bitwise predicts that by 2025, the RWA tokenization market size will reach $50 billion. 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 $1.3 trillion. This trend not only reflects the accelerated integration of traditional finance with the crypto market but also shows widespread recognition among institutional investors of RWA tokenization.

Analysis

In 2024, the RWA tokenization market experienced strong growth, with a total value approaching $20 billion. Among them, the market value of tokenized U.S. government 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 was primarily driven by a high-yield environment, with the Federal Reserve maintaining the federal funds rate around 4.4% for most of 2024, keeping short-term government bond yields at high levels and attracting many investors.

As a result, tokenized Treasury bills (T-bills) became highly attractive to both institutional and retail investors, especially in the context of seeking stable and risk-adjusted returns. Asset tokenization and fragmentation significantly lowered the investment threshold, reducing the minimum purchase requirement for traditional government bonds from $100 to $10 after tokenization. This low-threshold design allowed more investors to participate, further boosting market activity.

In 2024, tokenized real estate received significant 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 offering (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 partnered with Mantra to tokenize luxury properties worth $500 million. These projects 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 reduced on-chain transaction costs by over 50% compared to 2023. This made the issuance and trading of tokenized assets smoother, significantly enhancing the activity of the RWA secondary market. Platforms focused on private credit, such as Securitize, reported over $1 billion in secondary market trading volume in 2024.

4. DePIN and AI Achieve Explosive Growth, While DeSci Lags Behind

In 2024, the revenue of DePIN (Decentralized Physical Infrastructure Networks) projects grew over 100 times, reaching $500 million annually. The total number of DePIN devices surpassed 13 million. Meanwhile, the market value of AI agents surged by 222% in the fourth quarter, climbing from $4.8 billion in October to $15.5 billion in December. Among the three emerging technology fields, DeSci (Decentralized Science) experienced the slowest growth. The two leading projects in this field—BIO Protocol and OriginTrail—account for 50% of the market value.

If application scenarios become clearer, emerging technologies are expected to achieve deeper integration with mainstream industries in 2025. Cross-domain innovations, such as the combination of artificial intelligence (AI) and decentralized physical infrastructure networks (DePIN), may dominate as they offer the best growth opportunities. AI agents will play a key role in content creation, while DePIN networks will expand into the real-world asset (RWA) market, but decentralized science (DeSci) may face resistance from the traditional academic community.

Analysis

In 2024, the decentralized science (DeSci) field continued to expand its influence, with 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, which has a total market value of approximately $1.43 billion. To promote community engagement, BIO Protocol adopted a curation system where community members 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 seen broader adoption in supply chain management and AI-driven applications. The rising valuations of these projects reflect the growing recognition of the potential of decentralized science (DeSci) to reshape the future of scientific research through blockchain infrastructure.

Despite the significant potential of DeSci, issues related to incentive mechanisms and funding structures hindered the field's ability to break out of niche markets in 2024. A typical case is ResearchHub, a decentralized science platform aimed at helping researchers monetize their findings through a token incentive mechanism.

Nature magazine noted that some reviewers on ResearchHub earned more than they did in academia. The platform encourages more activity through token incentives, 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 hindered the expansion of DeSci. Although projects like Amino Chain raised $5 million and Lab DAO secured $3.6 million, these figures are trivial compared to traditional R&D costs. Deloitte estimates that developing a new drug can cost up to $2.3 billion, with no guarantee of market success.

Unlike biotechnology and pharmaceutical companies that operate within established intellectual property frameworks and attract large-scale institutional funding, DeSci still relies on volatile token markets 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 struggle to secure institutional funding. By crowdsourcing resources and providing decentralized data access, DeSci can support independent laboratories, open-source drug development, and underfunded research areas often overlooked in traditional models. While token-based financing may not replace large-scale grants, it offers researchers an alternative way to seek new funding outside academia and corporate R&D.

Similar decentralized financing models have driven the rapid expansion of DePIN in 2024, with the number of connected devices surpassing 13 million. Over 20 projects have more than 100,000 active nodes, with five projects exceeding 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, backed by Peaq and the Solana Foundation, further bolstered confidence in decentralized infrastructure. Render Network has become one of the leading DePIN projects, providing decentralized GPU computing services with a market capitalization exceeding $3.5 billion. Meanwhile, Helium Network also experienced rapid growth, processing 88,000 GB of data from U.S. mobile operators by the end of the third quarter, a 10,202% increase. Its Helium Mobile service also made significant progress, attracting 116,000 users subscribing to unlimited calling and texting services.

Another prominent project, Grass, expanded decentralized internet sharing infrastructure, allowing users to monetize unused broadband for AI model training. By the end of 2024, Grass had over 2.5 million user-operated nodes 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 adopted the DePIN model, allowing multiple investors and partners to fund and expand the charging network. This decentralized approach ensures a broader distribution of charging stations, improving accessibility for electric vehicle owners and creating a more balanced and competitive market.

As DePIN begins to reshape infrastructure, AI agents revolutionized the automation field in 2024. In just a few months, the market value of AI agents soared by 222% in the fourth quarter, reaching $15.5 billion. Solana rapidly rose with this trend, capturing 56.48% of the market, equivalent to $8.44 billion.

Among them, Virtuals.io became one of the most successful cases in the AI agent space. 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 incentivized community users to develop AI by awarding VIRTUAL tokens to the best-performing AI agents. Luna, 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 validation for Virtuals.io's business model. It demonstrates that AI agents can continuously generate revenue 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' stock prices outperformed Bitcoin, while others lagged significantly. MicroStrategy, with its aggressive Bitcoin investment strategy, saw its stock price soar by 400%, becoming the industry's standout "dark horse." Marathon Digital also achieved impressive results by mimicking MicroStrategy's strategy and successfully raising $1 billion through the issuance of convertible preferred notes.

However, most mining companies performed poorly after the Bitcoin halving. Looking ahead to 2025, the outlook for the cryptocurrency industry largely depends on the macroeconomic situation and whether the Trump administration will implement supportive policies.

If President Trump continues his friendly stance toward cryptocurrencies and actively promotes policies and legislation to reduce regulatory barriers, the stock performance of cryptocurrency miners and related companies is expected to improve. Additionally, as the global transition to renewable energy accelerates, Bitcoin mining companies that adopt sustainable development strategies may attract more investment and achieve better financial performance in 2025.

Analysis

MicroStrategy stood out with its aggressive Bitcoin investment strategy, resulting in a stock price increase of approximately 400%. The company successfully attracted significant investor attention through strategic debt financing and Bitcoin accumulation.

Moreover, hedge funds increasingly utilized 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) was the first Bitcoin miner to replicate 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 maturing in 2026, while the remaining funds were allocated for Bitcoin acquisitions, strategic expansion, and debt repayment. These convertible notes can be converted into cash or equity, issued at a 42.5% premium to MARA's stock price.

Additionally, MARA deployed 7,377 Bitcoins through a lending program, accounting for 16% of its reserves, to generate income and manage costs. In 2024, this program helped cover operating costs by generating $3.9 million in the third quarter and $4.8 million in the first half of the year.

However, as competition intensifies and costs rise, the profitability of Bitcoin miners faces greater challenges. In the third quarter of 2024, Bitcoin mining costs significantly increased, 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-based compensation), the total cost per Bitcoin skyrocketed to $106,000.

Bitdeer Technologies and Bitfarms 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 Bitdeer Technologies reporting a net loss of $50.1 million in the third quarter of 2024, its stock price still rose by 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%, further exacerbating financial strain.

In contrast, Bitfarms' stock price suffered a significant blow, falling 48.4% for the year. Despite its operational hash rate growing by 97% in 2024, unexpected expenses led to a decline in earnings.

Although the company's revenue increased by 30%, Bitfarms' gross margin fell to 38%, while operating expenses surged by 230% year-on-year. This expanded its net loss to $36.6 million, a substantial increase from the $16.5 million loss in the third quarter of 2023. Similar to Bitdeer, Bitfarms also cited rising electricity costs and increased network mining difficulty as the 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 invested $125 million to acquire Stronghold Digital Mining, which includes two power plants in Pennsylvania with a total installed capacity of 165 megawatts. Despite facing numerous challenges, Bitfarms still holds $72.6 million worth of Bitcoin and maintains $146 million in total liquidity, providing a buffer against rising costs.

6. Cryptocurrency Regulation: MiCA Reshapes the EU Landscape, U.S. Opens Business-Friendly New Path

In the EU, the implementation of the MiCA framework introduced strict compliance standards that remain consistent across member states. The new measures eliminate user anonymity, favoring larger companies with established compliance departments while imposing significant additional costs on smaller businesses. In the U.S., since Gary Gensler's departure, the SEC's crackdown on cryptocurrency companies has weakened, and the Financial Innovation and Technology Promotion Act (FIT21) may limit the SEC's powers. These changes make the U.S. more attractive to cryptocurrency businesses in the new year.

In 2025, small cryptocurrency businesses in Europe may face numerous challenges, potentially forcing them to relocate overseas. With the full implementation of the MiCA framework, the EU's requirements for crypto asset service providers have become stricter, including establishing offices, adhering to anti-money laundering (AML) guidelines, and following marketing material rules. While these requirements bring legal certainty and stability to the market, the compliance costs may be too high for small businesses, making it difficult for them to continue operating in Europe.

Meanwhile, the U.S. is gradually shifting toward a more friendly stance on cryptocurrency regulation. With the departure of SEC Chairman Gary Gensler, the "enforcement-style regulation" approach has come to an end, and the new government is expected to adopt more lenient regulatory policies. Furthermore, the advancement of FIT21 may further limit the SEC's powers, redistributing regulatory authority over cryptocurrencies between the CFTC and SEC. These changes make the U.S. more attractive to cryptocurrency businesses in 2025.

Analysis

As of December 30, 2024, the "Travel Rule" for cryptocurrency transactions has officially taken effect in the EU. This rule restricts crypto asset service providers (CASPs) from offering anonymous cryptocurrency transfer services within the EU. The "Travel Rule" was initially introduced by the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) as part of a broader principle.

The Markets in Crypto-Assets Regulation (MiCA) sets clear requirements for institutions providing crypto services and entered the implementation phase in the EU in 2024. MiCA aims to unify the cryptocurrency regulatory framework across EU member states and provide a standardized 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. During the transition phase, the regulation also requires CASPs to provide the full name, address, and additional identification information of the sender, and to record the beneficiary's relevant information regardless of the transaction amount.

The implementation costs of this rule are high, putting smaller CASPs in the region at risk. In contrast, in the U.S., U.K., Switzerland, and Canada, the "Travel Rule" only applies to transactions below specific amounts. In the future, as many countries, including Australia and Mexico, consider introducing the "Travel Rule" under pressure from the U.S., the scope of this rule may further expand. During the transition phase, 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 chosen a transition period of at least six months.

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, with their future expected to become clearer during the 18-month transition period stipulated by MiCA.

Beyond the EU, Switzerland, the U.K., 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 in segregated accounts at financial institutions.

7. DeFi Strongly Recovers: Total Value Locked (TVL) Surges 118% with Market Rebound

After a prolonged period of difficult development, the decentralized finance (DeFi) sector began to recover at 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 re-staking technologies, DeFi's total value locked (TVL) grew by 118%, reaching $185 billion. Decentralized exchanges (DEXs) also reflected this recovery trend, with trading volume increasing by 165%.

The trading volume of derivative DEXs increased by 328% year-on-year from January to November 2024. This reflects a resurgence of speculative activity against the backdrop of improved market conditions. Additionally, the number of transactions on leading Layer 2 networks such as Arbitrum, Base, and Optimism quadrupled over the past year.

According to VanEck's latest report, the DeFi sector is expected to undergo transformative development in 2025, with total value locked (TVL) projected to exceed $200 billion. This growth is primarily driven by strong performance in liquid staking, re-staking, and lending markets.

Furthermore, the trading volume of decentralized exchanges (DEXs) is also expected to increase significantly, likely surpassing $4 trillion and accounting for approximately 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 became 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 DeFi's total value locked (TVL). This growth was primarily driven by the outstanding performance of leading platforms like Lido and Rocket Pool, as well as the rapid growth of liquid staking on BNB and Solana chains.

Meanwhile, liquid staking tokens (LSTs) and their derivatives have become increasingly favored as collateral on lending and trading platforms, further propelling this trend and making significant contributions to the overall industry growth.

Re-staking technology—a major innovation pioneered by EigenLayer—allows users to create additional yields through secondary staking. This technology not only enhances the security of smaller blockchains but also facilitates cross-chain transaction processing and oracle development. As of the writing of this article, re-staking accounts for approximately 14% of DeFi's total value locked.

Currently, over 5 million ETH are locked in re-staking, valued at approximately $17 billion, accounting for over 9% of Ethereum's total staking supply.

The rise of liquid staking and re-staking is closely related to the scalability improvements of 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 re-staking protocols, successfully lowering their associated transaction costs by over 90%.

Decentralized exchanges (DEXs) also achieved significant growth in 2024. In December 2024, their monthly trading volume exceeded $350 billion, a 165% year-on-year increase. This growth was mainly driven by the overall market recovery in the second half of the year and the reduction in on-chain transaction costs.

Additionally, trading activity on chains such as Solana, Base, and SUI/Aptos 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 DEX to CEX (centralized exchange) spot trading volume in 2024 was approximately 14%, up from 9.5% a year earlier.

Conclusion

2024 is a critical turning point for the cryptocurrency industry. With the launch of the spot Bitcoin ETF in the U.S., Bitcoin is gradually entering the view of traditional finance, marking the maturation of this asset class.

Although Bitcoin attracted a significant influx of institutional funds, the performance of the altcoin market fell short of expectations, with only meme coins achieving decent returns. The performance of cryptocurrency-related stocks was mixed, reflecting the complex dynamics of the broader market, but companies like MicroStrategy and Marathon Digital demonstrated the potential of strategically integrating Bitcoin. Meanwhile, DeFi experienced a strong recovery at the end of the year, laying the groundwork for significant growth and innovation in 2025.

The regulatory landscape has also undergone significant changes, particularly with the EU's MiCA framework introducing stricter compliance requirements. At the same time, the U.S. has shifted toward a more friendly stance on cryptocurrency regulation, with potential limitations on the SEC's powers and the emergence of a new government supportive of cryptocurrencies, making the regulatory environment in the U.S. more favorable.

As these trends progress, the industry landscape may undergo significant transformations. Many small European businesses may shift their focus overseas in search of a more lenient policy environment, while the U.S. is poised to become a core hub for cryptocurrency enterprises due to its friendly regulatory stance and policy support.

In 2025, the cryptocurrency industry is expected to experience a vibrant and transformative year. Bitcoin is likely to continue its position as the flagship asset, while discussions around its potential as 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 avenues for industry innovation. DeFi is also set for further expansion, with total value locked (TVL) expected to surpass $200 billion, and DEXs' share of trading activity will further increase.

However, the future development of the industry still faces numerous uncertainties, and its trajectory will largely depend on the macroeconomic environment, the clarity of regulatory policies, and technological advancements, particularly breakthroughs in key technology areas such as energy-efficient mining and blockchain interoperability.