2024 Cryptocurrency Industry Review: Bitcoin Hits New Highs, Emerging Trends Emerge

In 2024, the cryptocurrency market welcomed its fourth bull market, although its development trajectory differed from many people's expectations. On the 15th anniversary of Bitcoin's birth, market momentum was driven by multiple factors, including adjustments in macroeconomic policies, the approval of spot ETFs, and changes in the political landscape. These changes have brought cryptocurrencies back into the public spotlight while opening up new channels for capital inflow.

It is worth noting that Bitcoin broke through the $100,000 mark on December 17, reaching a historic high of $108,135, pushing the total market capitalization of the entire cryptocurrency market to a new record of $3.91 trillion. This milestone event marks a strong recovery of the crypto market after experiencing earlier turmoil.

Here are the seven highlights of the cryptocurrency industry in 2024:

1. Significant growth in market capitalization: In the fourth quarter of 2024, the total market capitalization of the cryptocurrency market increased by 45.7%, closing at $3.91 trillion, a year-on-year growth of as high as 97.7%.

2. Bitcoin's Dominance Strengthens: Bitcoin has further consolidated its market position, currently accounting for 53.6% of the total market capitalization of the encryption market.

3. Bitcoin performed excellently: whether for the whole year or the fourth quarter, Bitcoin's performance surpassed that of major traditional asset classes.

4. AI Agent Market Explosion: The market value of AI agents is expected to experience explosive growth in the fourth quarter of 2024, skyrocketing from $4.8 billion to $15.4 billion, an increase of 322.2%.

5. Layer 2 solutions are booming: In the fourth quarter of 2024, the transaction volume of the top ten Ethereum Layer 2 platforms increased by 48.3%, with one Layer 2 platform accounting for 48.3% of the transaction volume.

6. Centralized trading platforms set a record: In the fourth quarter of 2024, the spot trading volume of centralized trading platforms reached $6.45 trillion, a quarter-on-quarter increase of 111.7%, setting a new historical high.

7. Changes in the public chain competitive landscape: In the fourth quarter of 2024, a certain public chain surpassed Ethereum to become the dominant chain for DEX trading, accounting for over 30% of all DEX transactions.

Market Capitalization and Bitcoin Dominance

In the fourth quarter of 2024, the total market capitalization of the cryptocurrency market grew by 45.7%, reaching $3.40 trillion. Although the market experienced a brief weakening of momentum in the third quarter, it rebounded in the middle of the fourth quarter, especially after the results of the U.S. presidential election were announced. For the entire year, the total market capitalization of the cryptocurrency market nearly doubled, growing by 97.7%.

Bitcoin's market dominance continues to rise, although the growth rate has slowed down. In the fourth quarter, Bitcoin's market share increased slightly by 0.9%. Notably, XRP performed well, with its market share rising to 3.5%, jumping to the fourth position by market capitalization. At the same time, Ethereum's market share continued to decline, dropping to 11.8%, marking a new low in recent years.

Bitcoin Performance and Comparison with Major Asset Classes

The fourth quarter of 2024 is a milestone period for Bitcoin. Bitcoin first broke through the $100,000 barrier, reaching an all-time high of $108,135 on December 9. By the end of the year, Bitcoin closed at $93,508, with an annual increase of 121.5%.

The strong performance of Bitcoin is attributed to multiple factors, including the results of the U.S. presidential election, expectations of interest rate cuts by the Federal Reserve, and market anticipations for further monetary policy easing in 2025. Against this backdrop, the daily trading volume of Bitcoin soared to $62.6 billion in the fourth quarter, representing a quarter-on-quarter increase of 101.3%.

In contrast, traditional financial markets have also performed well. The Nasdaq index and the S&P 500 index rose by 8.0% and 3.0% respectively in the fourth quarter. The dollar index also saw an increase of 7.0%, mainly driven by the depreciation of other major currencies.

Emerging Trends: AI Agents and Layer 2 Solutions

AI agents have rapidly emerged as a new category in the fourth quarter of 2024. Their market value surged from $4.8 billion to $15.5 billion, an increase of 322.2%. Currently, AI agents are primarily concentrated on certain specific blockchains, demonstrating the huge potential and development space in this field.

At the same time, Ethereum Layer 2 solutions continue to maintain growth momentum. In the fourth quarter of 2024, the daily average transaction volume of the top ten Layer 2s reached 15 million transactions, far exceeding the daily average of 1.2 million transactions on the Ethereum mainnet. One Layer 2 platform performed particularly well, accounting for nearly half of the transaction share.

Changes in the Trading Platform Landscape

Centralized trading platforms (CEX) set a new trading record in the fourth quarter of 2024, with a spot trading volume of $6.45 trillion, an increase of 111.7% month-on-month. The total trading volume for the year reached $17.4 trillion, a significant increase compared to $7.2 trillion in 2023. A leading trading platform continues to maintain its market dominance, accounting for 34.7% of the market share.

In the field of decentralized exchanges (DEX), there has been a significant change in the landscape in the fourth quarter of 2024. A certain public chain has surpassed Ethereum to become the dominant chain for DEX trading, accounting for over 30% of all transactions. This change reflects the competitive dynamics of different public chains within the DeFi ecosystem.

Overall, 2024 is a year full of opportunities and challenges for the cryptocurrency industry. The market has witnessed new highs for Bitcoin, the rise of emerging technologies and platforms, and further integration of traditional finance with the encryption world. As the industry continues to mature, we look forward to seeing more innovation and development in the future.