Five Charts That Tell You What Happened in the Crypto Industry in 2024

By: blockbeats|2024/12/30 09:15:05

When Bitcoin reaches $1 million, everyone will surely remember the year 2024, which has gone down in history in the cryptocurrency industry. Bitcoin was officially approved by the US SEC for an ETF, making it one of the few assets in the world that cannot be delisted, similar to gold and silver. The price of $100,000 per coin has also fueled market speculation about the future of cryptocurrency. BlockBeats has compiled 5 pieces of data in the hope that these numbers will help everyone understand what has happened in the Crypto world this year and also help everyone envision what the future might hold.

Chart 1: BTC Market Dominance

Five Charts That Tell You What Happened in the Crypto Industry in 2024

In 2024, Bitcoin saw a more than 130% increase in its value during the year, a surge that cannot be separated from the keywords "Wall Street" and "Trump." The pricing power and liquidity of Bitcoin underwent a structural shift in the US financial and political sectors after receiving open support.

Institutional Entry, A Stride Forward

On January 11, ten Bitcoin spot ETFs were approved. After the positive news, the Bitcoin price experienced a period of "Grayscale sell-off" and hit the first all-time high of 2024 on March 13.

Currently, Bitcoin spot ETFs have absorbed an average of 259% of the daily newly issued Bitcoin. Since their listing, these funds have accumulated a net inflow of $30 billion, holding over 1.408 million Bitcoins, equivalent to 7% of the total circulating supply. Bitcoin ETFs had 155 net inflow days in 2024, with an average daily net inflow of 5,233 BTC. In contrast, there were 93 net outflow days, with an average daily net outflow of 2,702 BTC.

Net inflows and outflows of Bitcoin spot ETFs in 2024; Image Source: SoSoValue

The returns of Bitcoin and ETF fund flows were closely linked throughout the year. Sustained strong inflows into ETFs typically accompany a strong market performance, and vice versa. This relationship can also be intuitively understood, as ETF inflows reflect the absorptive capacity of the spot market, i.e., buying pressure, while outflows reflect selling pressure.

The smooth to negative fund flow during the summer period corresponded to the market condition of overselling by the German government, as well as institutions such as institutions such as institutions such as institutions such as institutions such as institutions such as institutions such as the German government. The sharp increase in fund flow in the fourth quarter coincided with the election of Trump and the proactive accumulation by MicroStrategy.

As of December 20, 2024, institutional investors had collectively purchased 859,454 bitcoins, accounting for approximately 4.3% of the total circulating supply. Currently, institutional investors represent 31% of all known Bitcoin holders, a significant increase from 14% in 2023. In terms of publicly listed companies, a total of 297,673 bitcoins were accumulated in 2024, with MicroStrategy adopting an aggressive acquisition strategy to purchase nearly 250,000 bitcoins, bringing their total holdings to 439,000 bitcoins. Despite about 230,000 bitcoins originating from bankruptcy liquidation and seized assets this year, institutional demand effectively absorbed the selling pressure, and approximately 22% of the circulating supply is now available for trading, approaching the levels seen in 2021.

The dominance of CME-led open interest volume throughout the year also reflects a significant institutional trend in the Bitcoin market. As a leading global financial derivatives trading platform, CME has attracted a large number of directional funds, basis traders, and market makers, among other professional institutional participants, due to its strict regulatory framework and transparency.

Bitcoin Futures Open Interest; Image Source: Coinglass

These institutions engage in Bitcoin derivative trading through CME, bringing not only higher capital efficiency and liquidity but also gradually reshaping the market structure, concentrating trading activities more within the derivative markets. Meanwhile, the active trading of complex financial products such as 2x leveraged Bitcoin ETFs further solidifies institutional capital's dominant position in the Bitcoin market, marking a shift from retail-driven to institutionally led maturity in the Bitcoin market.

Gradually Departing from Crypto Fundamentals?

On April 20, Bitcoin experienced its fourth halving, but the price on that day showed a deviation from the historical average of a 22% pre-halving rally, instead dropping by 8%. In the subsequent 125 days, 2024 emerged as the worst-performing phase post-halving among all halving events.

One of the reasons for this phenomenon is that the actual impact of each halving on the circulating supply is steadily diminishing, and this diminishment has become more pronounced this year due to the overlay of macro factors. Data shows that Bitcoin's circulating supply is expected to increase by 216,158 BTC in 2024, while the annual issuance in 2025 is projected to be only 164,250 BTC, lower than MicroStrategy's accumulation between November 1 and December 12, 2024, resulting in a network annual inflation rate of only 0.8%.

Therefore, in the long run, the supply shock caused by the halving will have a diminishing impact on the Bitcoin price. A more significant driver of Bitcoin's future price is likely to shift towards structural changes on the demand side, no longer relying primarily on the supply contraction caused by the halving.

On the other hand, the correlation between Bitcoin and U.S. stock assets is becoming stronger. In the financial markets, asset allocation emphasizes that when significant volatility occurs, the assets in a basket do not move in the same direction. Therefore, when Grayscale went on a Bitcoin buying spree in 2019, the market's understanding was that Bitcoin had very low correlation with all other USD-denominated assets at that time.

However, by 2024, the correlation coefficient between Bitcoin and U.S. stocks is mostly positive, and Bitcoin's price movements are more synchronized with the U.S. stock market than almost any other time in the past, indicating that macroeconomic variables driving the stock market are also shaping the crypto market. Unless there is a black swan event specific to cryptocurrencies, this situation may continue throughout the entire easing cycle of the Federal Reserve.

Correlation Coefficient of Bitcoin and U.S. Stocks in 2024, Source: Newhedge

On August 5, the Japanese stock market crashed, and global stock markets experienced varying degrees of decline, with Bitcoin also dropping to its lowest level in months on the same day. Investors rushed to sell Bitcoin and Ethereum spot ETF shares, with Bitcoin's 24-hour liquidation reaching $1.16 billion.

Subsequently, analysis firms attributed Bitcoin's steep decline to an unexpected interest rate hike by the Bank of Japan, coupled with market expectations of a rate cut by the Federal Reserve, increasing uncertainty about central bank policies and leading to deleveraging of the financial system. Many financial market participants borrowed yen to invest in high-yield assets and reversed their position directions, causing Bitcoin to become a casualty asset in this process. It wasn't until October, buoyed by a more crypto-friendly political climate outlook, that the Bitcoin price once again exceeded $73,000.

At the same time, this year's most Bitcoin-correlated U.S. stock, MicroStrategy (MSTR), also joined the Nasdaq 100 index on December 23, further elevating the correlation between Bitcoin and U.S. stock assets. In addition, the final rebalancing mechanism of funds investing in BTC ETFs will further enhance structural correlation.

Trump Rally Shows Initial Strength

In 2024, during Trump's pursuit of support from the crypto industry, the price of Bitcoin was closely linked with Trump's election odds. After Trump's victory was confirmed, the Bitcoin price surged to $99,500, just a step away from six figures. On December 4, Bitcoin broke $100,000 for the first time in history, pushing its market value close to $2 trillion, ranking just below Apple, Nvidia, Microsoft, Amazon, and Google's parent company, Alphabet, in the market capitalization ranking.

2024 Bitcoin Market Cap Change Comparison Chart; Source: K33 Research

Michael Saylor and Trump are two key figures that cannot be overlooked when summarizing Bitcoin's 2024. The former traversed the cycle using financial tools to leverage Bitcoin, becoming the happiest person in this bull market. Meanwhile, Trump, from announcing at a Bitcoin conference his plan to establish a national strategic reserve to firing Gensler and appointing a pro-crypto White House team, immersed himself in the field, sparking imagination for Bitcoin's development as a mainstream asset in the new cycle.

Since the beginning of the year, institutions and MicroStrategy have net-purchased 683,000 bitcoins, with 245,000 of these transactions occurring in the weeks following the U.S. election. This demonstrates that the Republican Party's and Trump's policy inclinations will greatly boost Bitcoin's importance as a mainstream asset in the U.S., with the market eagerly anticipating Trump's presidency and its impact on the cryptocurrency market.

The Belated Season of Altcoins

The change in Bitcoin's market dominance has always been a key indicator for observing market dynamics in the crypto industry. In 2024, Bitcoin's market dominance climbed from the beginning of the year to 61%. At the same time, investors lamented that few assets could outperform Bitcoin this year, and the price performance of altcoins has made insiders frequently exclaim about the high difficulty of operating in this round of the cycle.

2024 Bitcoin Price Trend Chart; Source: TradingView

In 2024, Bitcoin's market cap grew by 141%, soaring from $828 billion to $1.98 trillion. Ethereum's market cap grew by 72% in 2024, rising from $274 billion to $473 billion. The market cap of other altcoins grew by 129% in 2024, increasing from $389 billion to $886 billion. This was mainly due to the strong performance of SOL and meme coins, with only 25 out of the top 100 altcoins outperforming Bitcoin.

On one hand, the overvalued "VC coins" were not recognized by the market this year, and on the other hand, Bitcoin, whose market dominance has been steadily rising towards 2024, did not bring much real liquidity to the crypto market. In March this year, WhaleMap asserted that "there is no altcoin season in this cycle" because the liquidity injected by the Bitcoin spot ETF is less likely to flow into the crypto altcoin market, thus leading to the market performance known as the "Bitcoin-only bull."

Looking back on this year, Bitcoin has completed a capital relay race driven by Wall Street and policy, redefining its global financial asset status by breaking the $100,000 mark. However, this is not just a price breakthrough but also a profound transformation of market structure, capital flow, and asset perception. The wave of Bitcoin ETFization and the institution-dominated market are pushing this decentralized asset onto a broader mainstream stage, but it is also making it more complex and sensitive to macro variables.

From the diminishing marginal returns of the halving effect to the boost from the Trump administration's policies, what Bitcoin has shown in 2024 is not just its control over the cycle but also its proof of ability to integrate into the global financial system. Currently, the market may still be entangled with issues of liquidity concentration and the absence of altcoins, but in the long run, Bitcoin is moving towards a more resilient, more widely accepted global value storage evolution.

Chart 2: AI Mindshare

2024 was a miraculous year for CryptoAI. From the beginning of the year when NVIDIA's stock price surge led to the rise of the DePin concept, to the development of datasets and machine learning, and finally ignited by Truth Terminal, the craze of AI Agents soared. Whether traders or developers outside the circle, retail or institutional, all set their sights on the AI Agent track. Let's review how this track, which currently has the most consensus, exploded in the past year.

Decentralized Computing Power, the Touchstone of CryptoAI

DePin Sector 2024 Index Change; Source: SoSoValue

In January 2024, OpenAI CEO Sam Altman clearly pointed out at the Davos Forum that computing power and energy shortage are the biggest bottlenecks for current AI development and predicted that in the future, computing power would be equivalent to currency. With ChatGPT sweeping the globe and NVIDIA's stock price hitting new highs, the market's attention to the AI field has unprecedentedly increased, especially in a world where GPU resources are scarce, distributed GPU concept projects have been well received. Not only have old projects like FileCoin and Arweave returned to the market, but new DePin projects have also emerged like snowflakes.

Dataset and Machine Learning, the Arsenal of AI Agents

Aside from computational power demands like GPUs, data is the most crucial resource for AI development. Blockchain data, with its characteristics of openness, transparency, and verifiability, provides unique value for AI/ML (Machine Learning). ML algorithms, through technologies such as GAN, VAE, and Transformer, transform data into useful insights or actions. Many large companies now collect their users' data because it not only serves AI training but also facilitates big data recommendations. Information about data-related tokens has surged along with the rise in popularity of AI from the beginning of the year to the end of the year.

In this era, data is a high-value asset. People have grown accustomed to traditional companies directly monetizing user information without users receiving any profits from it. However, this year saw the emergence of the first awakening of information rights. DataDao was born because Reddit revealed in its IPO prospectus in February this year that it had signed data licensing agreements with AI companies, generating a total revenue of $203 million, yet Reddit users did not receive a single cent.

Thus, "r/datadao" was created, issuing the $RDAT token to empower user data, allowing users to export their data from the Reddit platform and upload it to the community's database to receive tokens. This is the first Dao to fight for user data rights, and the driving force behind it is Vana, a machine learning platform listed on Binance in December.

At the beginning of the year, Vitalik presented his views on CryptoAI in "The Prospects and Challenges of Crypto+AI Applications," discussing the possibility of combining zero-knowledge proofs (ZK-SNARKs) and secure multiparty computation (MPC) technologies with AI training datasets. The advancement of these two technologies this year has also driven the development of privacy-oriented algorithms in CryptoAI projects, leading to the emergence of several projects providing platforms and ecosystems for machine learning.

Among them are Vana, which was mentioned earlier as supporting DataDao, and Bittensor, the force behind the booming market for $TAO. Machine learning, boosted by the AI Agent bull market in October, served as the foundation for underlying applications. Bittensor collaborated with the well-known AI Agent platform Virtuals Protocol to introduce the CAT AI AgentTAOCAT, showcasing Bittensor's machine learning capabilities. The renowned AI project Nous Research also developed a subnet on Bittensor to support a dataset assessment system, which not only trained the optimized large-scale model Hermes but also created the model optimization tool DisTrO.

AI+meme, The Great Breakthrough of Crypto AI

The AI Agent represents the first large-scale successful application of CryptoAI, enabling the decentralized computing power, datasets, and machine learning network to find actual demand. Before this, the demands in these areas were all peer-to-peer and lacked continuity. However, with the emergence of AI Agents, a flywheel effect has been triggered across various related sectors. Serving as a middleman, it brings the infrastructure and attention economy demand to lower-tier users.

Early in the AI Agent cycle, a large number of Meme + AI Agents emerged. At this stage, the two do not differ much in their business model; fundamentally, both are part of the attention economy, not generating value, but only culture. Therefore, as long as you have a sufficient number of unwavering followers, this token or culture can persist.

Among them, Truth Terminal deserves the title of the flag-bearer of this AI Agent trend. It was trained by Andy in the Infinite Blackrooms and established the Goatse Gospel religion in a conversation. With a $50,000 Bitcoin grant from a16z's founder, it released its own religion's eponymous token, Goatse Gospel. Finally, with the help of Fartcoin, it became the first AI millionaire, breaking the circle, attracting more attention from Web2 developers and AI enthusiasts.

The breaking of the $Goat circle led to the prosperity of the entire CryptoAI ecosystem, making it different from technology, applications, or even memes, leaning more towards a symbolic existence. However, associated with it, FartCoin, Shoggoth, as well as representations like Tee model's error error ttyl, can represent several AI-related concepts and the extension of MeMe culture related to AI, bringing people deeper philosophical reflections. Meanwhile, thought leaders or virtual idols like AIxbt, Zerebro, Luna used superhuman marketing tactics to gain extremely high influence.

But beyond the attention economy, there is a bigger bubble, the Bubble Factory, where the Virtuals Protocol is a premeditated bubble-making machine. Initially, when many AI Agents launched their coins, they would choose to launch on pump.fun. When there already exists a qualified asset launch platform, building an ecosystem platform for AI Agents requires more than just token issuance. Virtuals, as the most comprehensive AI Agent ecosystem platform in this cycle, included various components in its initial business model framework, such as token launch platform, Agent framework, AI Agent creator, ecosystem token, native influential IP figure, and real-world application cases in each track. This is also why Virtuals' flywheel can continue spinning in this cycle.

2024 AI Sector-Related Token Market Trend; Data sourced from CoinGecko, Infographic: BlockBeats

AI16z's influence on Sol is no less than that of the Virtuals, with a super large developer community. The open-source Eliza architecture has garnered over 6,000 stars and has been forked 1,800 times. The released ElizaOS is gradually integrating the developer community, ecosystem projects, and friendly projects from external ecosystems. The people in the AI16z ecosystem excel at maintaining an attraction economy, from Eliza's case sensitivity debate, cooperation with Stanford University labs, to using Tee and Eliza frameworks to create AI Agents that are conceptually self-funding and airdropping through AIPool.

Whether criticized or praised, Shaw always seems to keep the entire market focused on AI16z, enabling them to continue to work wonders in the market. Meanwhile, Zerebro and Story, which are more focused on AI creation, showcase the exciting experiences of bringing AI into the real world, inevitably raising expectations for the upcoming entertainment form of the AGI era.

After the attractiveness market gradually weakened in 2024, there is still a need for sinking applications for continuity. All AI participants hope to propel AI into the AGI era, whether it's Solana's version of Perplexity-GriffAIn, projects like Swarms, Eliza, and GAME working on Multi-Agent concepts, or when people truly become addicted to AI Agent applications; that will guide the market towards more sustainability. The CryptoAI, which can enable AI Agents to have wallets, a more comprehensive dataset, and multi-agent collaboration, may be the true soil that can propel AI Agents into the AGI era. The AI Agent era is just beginning, and before finding larger speculative topics in the market, Crypto AI will be the most core trend.

Chart 3: Meme Coin Total Market Cap

Meme Coin 2024 Market Cap Changes; Source: CoinMarketCap

In 2024, the Meme Coin sector was one of the fastest-growing and most traded areas, with the "overnight riches" myth capturing the attention of countless people, especially after BOME broke the billion-dollar market cap record at a record speed in March, leading the entire market into a hot "Meme Summer." Essentially, Meme Coins' strong performance is based on attention and FOMO sentiment. They provide lower transaction costs, fair and transparent token distribution, efficient issuance, and trading mechanisms, meeting the speculative needs of many investors.

According to CoinMarketCap data, the 2024 Meme Coin market cap showed an overall growth trend. In the first quarter, the market cap fluctuated around 200 billion US dollars. In March, with the birth of Bome and the rapid development of Pump.fun, the meme market experienced a transformative change, stabilizing the total market cap at around 500 billion US dollars. From the second quarter to the third quarter, although various meme coins were still being hyped, the overall market cap did not increase accordingly. Meme coin trading gradually became a player-versus-player game among retail investors. In the fourth quarter, the favorable trend of U.S. policies became clearer, Bitcoin's strong upward price movement approached $100,000, AI storytelling combined with Binance's frenzy listing of meme coins injected a large amount of liquidity into the meme market. Meme coins were unprecedentedly hot, the market size quickly surged, reaching its peak market cap of 137.1 billion US dollars on December 9, and as of the drafting date (December 24), the market cap was 96.5 billion US dollars.

Based on the market cap changes, the author divided the development of Meme Coins in 2024 into three stages:

1-3 Months: Early Stage, ORDI Peaks the New Year, BOME Explodes Overnight;

3-10 Months: Many Memes Emerge, But Market Cap Stagnates in PvP Stage;

10-12 Months: AI Storytelling + Binance Listing Meme Coins, Market Cap Soars, PvP Evolves into PvE.

1-3 Months: Early Stage, ORDI Peaks the New Year, BOME Explodes Overnight

ORDI was the first BRC-20 token issued on the Bitcoin blockchain, and its most spectacular year was 2023, during which it leaped from zero to over ten billion in market cap, leading the epigraph wave. As we entered 2024, the hype around ORDI continued to rise, and on March 5, it hit a new all-time high of $97, with a market cap reaching a staggering $1.84 billion.

However, founder Casey had long been dissatisfied with BRC-20, believing that it would generate a large amount of "junk" UTXO. With Casey unveiling the Runes documentation on the X platform by the end of March 2024, Runes became the most powerful competitor to Inscriptions. Inscription transactions had long held over 50% of the share on the Bitcoin chain, but after the official release of the Runes protocol in April, the transaction share of BRC-20 and Ordinals had been reduced to less than 10%. As of the drafting date, the ORDI price was $26.46, with a market cap reduced to $560 million, only one-third of the largest market cap.

Bitcoin Chain Transaction Share; Image Source: geniidata

The explosion of BOME Coin ignited the first wave of the 2024 meme coin market frenzy, sparking the meme craze to spread across various public chains, kicking off the 2024 meme frenzy. At the same time, BOME innovatively adopted the "presale" gameplay, initiating a unique art show.

On March 14, 2024, BOOK OF MEME (BOME) issued by Pepe Meme artist Darkfarm skyrocketed 20 times within just three hours of its launch, with a market cap exceeding $80 million. BOME is a permanent storage image gallery for memes, with the ability to expand a series of meme creation features based on it. On March 13, Darkfarm started the presale, allowing participation by sending SOL to a designated Solana address. The effect of the presale and the hype generated exceeded expectations, with the token widely spread in the Chinese and English communities, and a large number of buy orders of over a hundred SOL continuously pouring in driving its price up; BOME peaked at a high price of $0.0012, a approximately 24x increase, with a market cap exceeding $80 million.

In terms of mechanism, a meme coin, as a type of cryptocurrency with no real value, typically adopts a fair launch to issue coins. While presales are common in traditional financial markets, meme coins are unique in that they thrive on emotion and trends. For projects without strong backing, users sending SOL to a specified address after a presale are likely to bear the risk of a rug pull by the project team. The success of BOME not only made it a market focus but also triggered a presale trend in the Solana ecosystem, opening up market imagination for the frenzy of future meme coins. The meme coin market cap doubled from $200 billion to $500 billion.

March-October: Gold Rushes Abound, Yet Market Cap Stays Flat in PvP Phase

In the second phase, the meme coin market cap stabilized at $500 billion, with fluctuations around this level. The popularity of pump.fun in March made creating and trading meme coins more convenient, allowing anyone to easily create their own meme coins, attracting a large number of investors to participate and expanding the market size. During this time, numerous meme coins with billion-dollar market caps emerged, such as BRETT, Neiro, MOODENG, CHILLGUY, but the overall market cap of meme coins did not show stable growth despite the emergence of the overnight riches myth. The entire market remained in a zero-sum PvP game state. In an environment lacking a new narrative, the hype logic of meme coins shifted towards CTOs, TikTok influencers, and the like.

Pump.fun was launched in January 2024 as an issuance and trading platform for Solana-based meme coins, featuring fair launches. It quickly gained popularity in the community, riding the wave of meme coin craze, or directly propelling the meme coin frenzy into a new stage.

According to Dune dashboard data provided by Hashed, starting from March, the number of tokens deployed on the pump.fun platform has gradually increased, with an average daily addition of around 10,000 newly deployed tokens. The cumulative number of deployed tokens has now reached close to 1.8 million.

Deployment volume of tokens on the pump.fun platform; Source: dune

For project issuers, the entry barrier of Pump.fun is low, requiring only 0.02 SOL to launch a project (which became free in early August). Projects can quickly list, and as long as they reach a market value of $60,000, they can swiftly enter Dex Raydium. By then, the first buyers have already gained multiple returns.

For retail investors, daily tracking of tokens issued following hot topics represents the current mainstream user's love for Meme culture, contrasting sharply with traditional VC projects; due to the limited liquidity of the pump.fun platform and the large market value fluctuations, it has also created opportunities for windfall profits. There are no shortage of legendary stories where investors entered with 1 SOL and made a hundredfold profit, greatly stimulating market enthusiasm.

In July, the lowercase Neiro sounded the horn of community victory, being hailed as the first CTO-spirited Meme coin.

Neiro was inspired by the real-life namesake Shiba Inu, known as the successor to DOGE. On July 31, the uppercase NEIRO was revealed by bubblemaps to be a true conspiracy group just one week after its launch, while the lowercase Neiro was more community-driven and remained lukewarm in the early stages until Vitalik publicly expressed support and donated over $500,000 to an animal welfare fund. It was only through the power of community promotion that its price gradually started to rise.

At the beginning of September, Binance's listing announcement undoubtedly reignited the debate between uppercase and lowercase. Binance announced the listing of both uppercase NEIRO and lowercase Neiro within ten days of each other. Eventually, the market value of lowercase Neiro also quickly surged within a few hours, skyrocketing from $20 million to over $120 million, while the uppercase NEIRO token price rapidly fell, plummeting below $0.1 in just a few hours, with a single-day maximum decline of over 50%.

After the initial project team abandoned the project, Neiro was taken over by the community, and in the end, the crypto community triumphed over the "conspiracy group." The victory of lowercase Neiro marked the first "official recognition" by Binance of the community-based CTO's power, demonstrating the strong potential of community governance. Through this battle, Neiro, also known as the first CTO-spirited Meme coin, emerged victorious.

In September, moodeng sparked a trend of viral animal memes, leveraging TikTok for viral dissemination.

"Cuteness" and "ugly-cute" have always been popular images that netizens enjoy and are long-standing hotspots in the meme market. In September, a small hippo named Moo Deng went viral across the Internet, becoming the headline of various media outlets. It was born at the Khao Kheow open zoo in Thailand and quickly became popular on TikTok and Instagram due to its cute expression and ugly-cute image.

Based on Moo Deng, a meme coin was launched on the Solana Pump.fun platform, gaining immense popularity and love, and its market value exceeded $100 million in just a few weeks. On November 15, after Binance announced the listing of the MOODENG contract, the meme coin skyrocketed by over 100%.

The Hippo MOO DENG has gained tremendous popularity in the international community, receiving extensive coverage from numerous media outlets in a short period. For the meme market, which is already enthusiastic about cute animals, the adorable nature of the animal itself lends well to hype. Moreover, with the viral spread on platforms like TikTok and Instagram, it easily becomes a phenomenal meme coin target.

Although it may seem like market hotspots are emerging frequently during this period, there is a lack of a narrative that truly expands the market, and many hotspots lose momentum after the first wave of PvP. In October of this year, BlockBeats conducted a survey on investor behavior towards memecoins, with 274 investors participating. Although the scope is limited, it still provides insight into the current market conditions and retail investor sentiment.

From the results, it can be seen that around 40% of investors buy into more than 3 meme projects each day; in terms of purchase amount, 30% buy below 0.1 SOL, 30% buy in the 1-5 SOL range, and there are also 13% of whales who make one-time purchases of over 5 SOL.

In terms of profit and loss, only 40% of investors have made money in the past month, but overall, there are mainly those who have made big profits, small profits, or small losses. Investors with significant losses (over 1000 units) make up only 20%. Regarding the current meme market trend, the vast majority of investors agree that this is an information asymmetry game, with close to half of the participants considering it pure gambling.

Simultaneously, another set of data from CashCashBot also highlights a similar issue. The data records the profit and loss and frequency of operations of various addresses in October, showing that both regular users and VIP users are highly active daily, but the overall average returns are still negative.

In terms of win rate, most of the time users have an average daily win rate of less than 0.5, with the highest daily win rate also less than 0.6, and the lowest daily win rate around 0.42;

Average Daily Win Rate of Users; Image Source: CashCashBot

In terms of daily earnings, the left image shows the average earnings of all users. It can be seen that most of the time, the average daily earnings of users are negative, and the maximum positive earnings are only around 25 USD; the right image shows the total earnings and losses of VIP users. It is not difficult to find that the trend chart of total earnings and losses is basically symmetrical around the 0 scale line, indicating that the net earnings of VIP users are also around 0. Overall, it is also a zero-sum game. Some users told BlockBeats in an interview that they really like the internal address analysis feature of CashCashBot, but due to the intense player versus player (PVP) market situation, it is very difficult to make a positive profit even with very handy tools.

Left Image: Average Daily Net Earnings of All Users; Right Image: Daily Total Earnings and Losses of VIP Users; Image Source: CashCashBot

In terms of trading frequency, in October, the average daily number of trades made by users basically remained above 10 times, and half of the time it was above 15 times, indicating that users' participation frequency and willingness to engage in the market remain at a relatively high level.

Average Daily Number of Trades; Image Source: CashCashBot

The above data roughly sketches the profile of some retail investors, waiting for opportunities every day, frequently engaging in PVP, but in the end, only a few people can successfully make money. Most people experience small gains or losses, as it is difficult to find a market pattern. They can only rely on information asymmetry to increase the win rate in this "gamble."

October to December: AI Narrative + Binance's Wild Listing of Meme Coins, Market Cap Soars, Shifting from PVP to PVE

After engaging in six months of PVP, the market finally saw new growth momentum. In October, the emergence of AI memes and AI Agents brought a new narrative and unlimited possibilities for gameplay. In November, Binance listed pnut and act, and subsequently, Binance wildly listed meme coins, injecting a massive amount of liquidity into the meme market. The market cap skyrocketed from 500 billion USD to the 1 trillion USD level. At the same time, the DeSci narrative rose, and PVP finally transitioned to PVE.

In October, AI Agent memes gradually entered the market's field of vision, igniting the AI+meme new track.

This trend began with GOAT, where GOAT stands for Goatseus Maximus, developed by Andy Ayrey and backed by a16z. It originated from Truth Terminal and is a token issued by an AI Bot engaged in multi-round reasoning and soliloquy.

With Truth Terminal's frequent promotion on Twitter, on October 10, an anonymous investor recognized the meme's potential for widespread dissemination, launching GOAT, which went live on Pump.fun. GOAT's market cap reached a peak of $3.5 billion in just a few days. Subsequently, due to the official intense promotion and the wealth effect of the secondary market, GOAT's market cap exceeded $13 billion.

After the explosion of GOAT, AI Agents emerged in large numbers like mushrooms after rain, with different agents launching different tokens, developing various gameplay and features to attract attention, and then gradually perfecting their application scenarios to build their own ecosystem. For example, ZEREBRO and AI16Z both announced plans to launch AI infrastructure using their tokens.

The rise of GOAT not only reflects the intersection of artificial intelligence, blockchain, and meme culture but also reveals the AI's potentially profound impact on the crypto space. This phenomenon has brought the combination of AI and memes back into the public eye, sparking widespread discussion and attention, and opening up possibilities for new tracks.

On November 11, Binance listed meme coins PNUT and ACT spot, which surged by 330% and 1440% respectively within a day, once again igniting the meme market.

The squirrel image of PNUT originated from a squirrel named "Peanut" that was euthanized under suspicion of carrying a virus. At that time, Dogecoin condemned the Democratic Party in a post, and Musk also mourned Pnut in a post and claimed that Trump's election would save Peanut. Subsequently, a large number of Peanut derivatives began to emerge online. Since then, based on the Internet celebrity animal meme, Peanut has been overlaid with a buff with a political color related to "Trump."

ACT Meme is a cryptocurrency that combines AI technology and blockchain, aiming to create an ecosystem with an "AI and Meme" theme. ACT has been betrayed by developers many times, which once brought significant negative impacts to its long-term development, but the community has never given up on building the ACT project.

The sudden wealth creation miracle brought about by PNUT and ACT pushed market sentiment to a climax. Binance also took advantage of the trend by crazily listing meme coins. Within a month, Binance successively listed tokens such as HIPPO, DEGEN, BAN, SLERF, CHEEMS, WHY, CHILLGUY, etc. The meme coin market was extremely hot, with abundant liquidity pouring in, doubling the overall market cap of the meme coin market, reaching its peak on December 9 at a market cap of 137.1 billion USD.

Another hotspot in November was DeSci. On November 8, Binance Labs announced an investment in BIO Protocol, stating that this investment marked Binance Labs' first foray into the field of Decentralized Science (DeSci). Shortly after this announcement, in less than a week, CZ attended Binance's Desci Day event in Bangkok and discussed DeSci insights with Vitalik.

Binance's investment drove the rapid rise of DeSci sector tokens. RIF and URO surged nearly 50 times within two days, with market caps reaching 2.5 billion USD and 1.6 billion USD, respectively, becoming the focus of the market at that time. Following this, tokens related to Bio Protocol supported by Binance Labs emerged, and meme coins related to the world's largest open-access scientific research platform, Sci-Hub, also joined the Desci Meme track. A grand narrative of decentralized science unfolded, with the market in a frenzy. Many participants believed this was a track with as much potential as the AI Meme.

This round of Meme narrative, from runic inscriptions, presales, community CTOs, internet-famous animals, to AI Meme and DeSci, saw innovative gameplay and narratives emerging one after another. It achieved two substantial increases in market value in March and November, respectively, and gave birth to tokens that became all the rage like BOME, SLERF, Neiro, MOODENG, PNUT, GOAT, RIF, among others. The overall market cap of the meme market grew fivefold from the beginning of the year.

After brewing in the first quarter, the market's eruption in March, and a subsequent PvP lasting for half a year, the Binance listing effect in November finally injected a significant amount of liquidity into the meme market, finding new market increments. AI Meme and AI Agent, as well as DeSci combining web3 and science, have opened up entirely new tracks for memes, broadening the market's imagination. Several tokens that skyrocketed and numerous top-tier investment institutions entering the scene have also proven the market's boundless potential.

In the future, Meme will inevitably become an indispensable piece of the entire Web3 ecosystem, continuing to create new myths. The Meme is on the rise, and the future looks promising.

Chart 4: DEX vs CEX Market Share

In July of this year, The Block released a data report showing that the market ratio of DEX to CEX spot trading volume reached 13.76% at mid-year, surpassing May 2023's 13.7%, setting a new record high. In June, CEX trading volume was $1.11 trillion, while DEX trading volume was $123 billion. Just three months later, this number doubled, reaching nearly $300 billion in October.

Since the DeFi Summer of 2020, the market ratio of DEX to CEX has maintained a strong growth trend, even during the deep bear market of 2023. Over the past four years, amid the continuous evolution of crypto narratives such as DeFi, Metaverse, NFTs, GameFi, and DePIN, the market has always interpreted the underlying logic and eternal proposition of Mass Adoption: "From Web2 to CEX, and then from CEX to DEX."

In 2024, the core trend of industry development seems to have hit the accelerator, entering a key stage of transformation from quantitative change to qualitative change. According to a16z's data, the total number of active addresses of the top blockchains in the crypto market has rapidly grown from 70 million in August to over 160 million by the end of this year, almost 20 times higher than in 2021.

Left: DEX vs CEX Market Share, Right: Top Public Chain Active Addresses; Data Source: The Block, a16z Crypto

On-Chain Asset Issuance Welcomes a New Spring

After experiencing a two-year market state of "blockchain oversupply," the crypto industry in 2024 has once again entered a full-scale on-chain revival mode, igniting a new wave of growth in asset innovation and transaction infrastructure.

At the end of 2023, the BRC-20 standard and the subsequent surge in on-chain inscriptions ushered in a second wave of frenzy, shifting the majority of crypto market trading goods from CEX to on-chain. From the Bitcoin ecosystem's AUCTION, MUBI to the Solana ecosystem's ZERO, NUTS, and the Avalanche ecosystem's AVAV, the frenzy around on-chain inscriptions has not only attracted a large number of new users but has also brought more active funds into the on-chain ecosystem.

Despite the Bitcoin ecosystem's strong "retro vibe," the continuously rising market trading heat has also brought the ancient OTC trading mode into the public eye, giving rise to OTC pre-market trading products on platforms like Whales Market and aevo. Interestingly, in the process of transitioning commodity trading from off-chain to on-chain, OKX "accidentally" emerged as the biggest winner.

Left: Aevo, Right: Whales Market

In 2023, OKX quietly began to exert its strength in decentralized wallet products and quickly became the primary trading platform in the inscription market. Earlier this year, the most common phrase heard among crypto users may have been, "I have uninstalled MetaMask." After long-term investment and polishing, OKX unexpectedly became the smoothest "chain abstraction product" in terms of user experience in the wallet race, leveraging the heat of the inscription market to attract and nurture a large number of new users, and rapidly seized the market through word of mouth in the industry, experiencing an explosive growth in user numbers in April, with a growth rate of over 130% in two months.

Transaction Infrastructure Arms Race: On-chain Exit Is No Longer a Dream

Behind the heat of on-chain asset issuance is a new round of on-chain infrastructure explosion, where developers have engaged in a highly competitive "insider" competition around asset issuance, distribution, and trading. On the Solana blockchain, the first battlefield opened was around the "on-chain information distribution" tools.

Following the surge of Analysoor and NUTS, the Solana ecosystem meme market momentum began to rise, partly thanks to traffic supply from the "early on-chain platform" Birdeye. Many on-chain players started looking for trading opportunities based on Birdeye's daily popular meme leaderboard, providing a distribution channel to bring more attention and liquidity to lower market cap meme tokens.

Under the successive impacts of "super meme coins" such as SILLY, BOME, and SLERF, the Solana on-chain meme market was completely ignited. In the race for traffic dividends, veteran token analysis tools like Dexscreener and DEXTool also started timely optimizations for popular blockchains such as Solana, Base, and Sui, further promoting the efficiency of asset information distribution. The meme coin outbreak brought attention, platform competition for information distribution efficiency, more attention and liquidity entry, and thus the initial formation of a "heat flywheel" in the meme market.

Left: Birdeye, Right: Dexscreener

After Pumpfun's rise in May, on-chain players began to have more demand for token information. At this time, the original token analysis tools came into play, with veteran websites like Dexscreener and DEXTool quickly regaining market share and gradually replacing Birdeye. Subsequently, the emergence of GMGN packaged on-chain data into trade signals, with features such as insider trading, whale holdings, KOL positions, and smart money movements, narrowing the information gap between traders once again. This further accelerated the gameplay changes and trading pace in the meme market, making it a tool that many meme players rely on most when "on-chain scanning."

Another even hotter front is in the Telegram trading bot field. Since the birth of Unibot and Banana Gun last year, "TG Bot" has quickly moved from a niche track to the mainstream spotlight. In February, Delphi Digital analyzed the profit mechanism and growth space of TG Bots such as Maestro, UniBot, and Banana Gun in a report on trading bots, and came to a very optimistic conclusion. Six months later, Banana Gun's monthly trading volume surpassed $7.4 billion, with a monthly revenue of $4.64 million.

Meanwhile, the competition among TG Bots in the Solana ecosystem has entered a white-hot stage. Products such as BullX, Trojan, and Photon, which pursue extreme transaction speeds, have successively entered the market, and during the peak period in November, the total daily transaction volume of TG Bots even approached $5 billion.

It has been proven that meme coins have already taken a considerable share of the CEX trading market. For most of the fourth quarter of this year, half of the top ten in Binance's cryptocurrency 24-hour trading volume rankings were MEME tokens. The daily trading volume of meme coins such as PEPE, DOGE, WIF, etc., can reach $34.54 billion, even exceeding SOL itself. In comparison, the price performance and wealth effect of "VC coins" in mainstream CEX are disappointing, and "on-chain exit" has become an option that many mid-to-low market cap project teams have to consider.

Top: Top On-Chain Product Revenue Rankings, Bottom: TG Bot Daily Trading Volume Share; Data Source: BlockBeats OPRR, Dune Analytics

Interestingly, in addition to the "Velocity Flywheel," the arms race for on-chain asset distribution and transaction efficiency has also helped participants complete the business loop. To facilitate users' one-stop interactive experience on the platform for target mining, information retrieval, and token trading, platforms such as GMGN and ABot (formerly NFT Sniper) have integrated trading APIs into users' token analysis systems.

This exploration has opened up a new trend of integrated token analysis + trading Bot, and subsequently emerged platforms such as Cash Cash Bot and DEXX have optimized the combined experience of token information and trading, even once heard the slogan of "Binance on-chain." By generating additional revenue through API fees, it has changed the past monetization method of token analysis tools relying mainly on advertising. According to Dune data statistics, during the peak of meme trading in November, the daily trading volume through the GMGN API reached as high as $90 million, while the average daily revenue generated by GMGN platform through API fees in that month was nearly $400,000.

GMGN Platform Revenue; Source: Dune Analytics

Of course, the process of on-chain defeating off-chain cannot be accomplished overnight. In the world of blockchain, no one can break the impossible triangle. While TG Bot pursues scale and speed, the security of user funds is often sacrificed. In November, DEXX experienced a sudden user asset theft incident, with a total loss of funds reaching tens of millions of US dollars. The hacker, after obtaining the stolen assets, engaged in massive sell-offs, causing a collapse in on-chain meme prices, directly impacting the duration of market liquidity prosperity.

DEX Full Outbreak

The arms race for transaction infrastructure in 2024 is not limited to the meme token field. In the previous round, Perp DEX that failed to rise on Monday, as well as the new generation DEX logic such as CLOB (Central Limit Order Book) and Intent Trading, have also experienced a full outbreak. In the fourth quarter of this year, Hyperliquid set historical price highs after the token TGE, breaking into the top 50 of the crypto market in just two weeks, surpassing even its "old home" Arbitrum, capturing the entire industry's market attention.

Hyperliquid Platform Inflows; Source: Dune Analytics

Behind the new all-time high, Hyperliquid's success is inseparable from precise "market aesthetics," keenly capturing the market pulse of this cycle's "VC Coin Meet Resistance." While refusing to take the fundraising cash-out route, the team's work in creating low-latency, high-throughput infrastructure and high-frequency trading products has also been outstanding. Of course, Hyperliquid's most innovative aspect remains its innovative listing mechanism.

Hyperliquid uses a Dutch auction to auction the token's ticker, with the listing process being open and transparent. If a project team wants to list spot trading, they need to apply for deployment permission for the HIP-1 native token, followed by using a Dutch auction mechanism to determine which project will ultimately win the token ticker.

Over the past period, some mainstream CEXs have been deeply involved in the "listing fee" public opinion whirlpool. In the CEX-dominated centralized and opaque listing market, crypto projects often need to spend a huge amount on the "listing" process. Hyperliquid provides a more economical solution that meets the demand for large exchanges that cannot be launched at the moment and also allows for low-cost listing on a decent exchange platform. After subsequent integration with HyperEVM, tokens purchased on Hyperliquid can be used in other EVMs, further highlighting its relatively superior listing cost-effectiveness.

Comparison of Perp DEX Market Share (top) and Weekly Trading Volume (bottom), with the light green part representing Hyperliquid; Data Source: Dune Analytics

Another pleasing on-chain development comes from CowSwap. Since Binance listed COW spot trading, CowSwap and its representative narrative have once again become popular.

Due to differing views on AMM and order book trading mechanisms, DeFi protocols have gradually evolved into two technical development directions. One is the AMM on-chain LP trading pairs represented by Uniswap, and the other is the on-chain + off-chain order book settlement represented by Cowswap.

Unlike Uniswap, which calculates the final transaction price in liquidity pools as "x * y = k," Cowswap users sign specific trade intentions (such as price, asset, and quantity) on-chain, and then the rest of the work is handed over to the protocol's "solver" to be completed through on-chain + off-chain methods.

Although the "Layer 1 + Layer 2" solution may not sound very "Crypto Native," it has indeed brought a significant improvement in user experience. The order book and off-chain batch processing transaction method allow protocols to aggregate on-chain LP pools, peer-to-peer order books, liquidity from in-house market makers, and liquidity from CEXs. Transactions are faster, with less slippage, and users don't even need to prepare additional Gas tokens for transactions, providing an extremely smooth experience.

Recently, CowSwap, as a designated DEX by Gnosis, became the "official DEX" for Trump's DeFi project WLFI to purchase on-chain assets, once again attracting attention. It can be foreseen that in the ongoing process of Mass Adoption in the on-chain world, intent-based infrastructure represented by CowSwap will play a more significant role.

Chart 5: Percentage of Pro-Crypto Members in the US Senate and House of Representatives

In Q4 of 2024, with Trump winning the US presidential election by a landslide with 270 electoral votes and returning to the White House after 4 years, Bitcoin ended its six-month-long volatile market and started to soar. During the unprecedented "institutional bull run" in the off-chain world amidst regulatory relaxation, Trump sought enthusiastic support from the crypto community to win the election.

To win this election, Trump went all out to court the crypto industry during his campaign this year and became a staunch Bitcoin advocate. At the Bitcoin 2024 conference held in Nashville in July, Trump mentioned that if elected, he would implement a series of pro-crypto policies to ensure the US becomes the world's crypto hub and a Bitcoin superpower. These commitments include dismissing the current SEC Chairman Gary Gensler, appointing a Cryptocurrency Presidential Advisory Committee, and holding Bitcoin as a strategic Bitcoin reserve for the US, among others.

Not only did Trump become the first Bitcoin President in the US, but the entire Congress was filled with pro-crypto officials taking office.

After Trump won the election, although many industry insiders began to hold an optimistic attitude towards clearer and more supportive regulatory policies for the future of the industry, what really excited institutions and various practitioners about crypto, and what could fundamentally reverse the pressure on cryptocurrency at the US political level, is that the US is about to usher in a brand new "Pro-Crypto Congress".

The "Crypto Gold Standard" Era in US Politics

According to Stand With Crypto data, in this election, a total of 261 pro-crypto candidates won House seats, while anti-crypto congresspeople numbered only 116. At the same time, the new Senate also leans more towards supporting cryptocurrency, with 17 supporters and 12 opponents.

Meanwhile, in this unprecedented "Bitcoin election," crypto companies also played a role. In 2024, crypto companies have become major contributors to US political donations. Coinbase and Ripple are the top enterprise political donors this year, contributing nearly 48% of the total corporate donations. Fairshake, a Super PAC established by former New York Governor's aide Josh Vlasto in 2023, has raised over $200 million to support pro-crypto candidates, becoming the highest-spending PAC in this election cycle.

Fairshake aims to elect pro-crypto candidates and combat skeptical opponents, receiving support from companies like Coinbase, Ripple, and Andreessen Horowitz. This funding has not only influenced presidential candidates' policies but also driven congressional election strategies supporting cryptocurrency.

An example occurred in March this year, when progressive Democratic Party star Katie Porter raised over $30 million in the California Senate election and was expected to win. However, because she adopted Elizabeth Warren's political stance and had stood on the same side as Harris on banking regulation issues, Fairshake viewed her as an "ally of the anti-crypto movement".

During the California primaries, Fairshake spent over $10 million opposing Porter, weakening her support among young voters. Through Hollywood billboards and ads targeting her comments, Fairshake claimed Porter misled voters into supporting pro-business legislation. As a result, her campaign funds were affected, ultimately preventing her from entering the fall election.

After the dust settled from the election, Musk emerged as the biggest winner outside of Trump and the Republican Party.

During his election night national address, Trump spent a significant amount of time thanking Musk. Recently, Musk has poured over $130 million as well as a significant amount of time and tweets supporting conservative politics, with Trump particularly praising Musk's rocket company SpaceX and its Starlink satellite internet, saying "We have to protect these supergeniuses," the President-elect said. During the campaign, Trump also revealed that at Musk's request, he will create a "government efficiency" position specifically to support the tech entrepreneur.

Musk is known for his opposition to government intervention, always pointing out government overreach whenever faced with fines or penalties. Therefore, his alliance with Trump, who has pledged to ease regulations, is not surprising. Apart from potential reduced government oversight, Musk's alliance with Trump could also help him secure more federal contracts. According to The New York Times, SpaceX and Tesla have received at least $15.4 billion in government contracts over the past decade. Musk's colleagues and government officials have told Reuters that the billionaire's support for Trump is also aimed at better protecting his companies from regulation and ensuring government subsidies.

After Trump announced Musk would be in charge of the Department of Government Efficiency, Musk posted the DOGE Logo image on his personal Twitter. Image Source: Musk Twitter

Furthermore, on the morning of November 13th at 9:30 AM, Trump released a statement appointing Elon Musk to lead the Department of Government Efficiency (DOGE) to eliminate government bureaucracy, reduce overregulation, cut wasteful spending, and restructure federal agencies. Musk subsequently released the logo of the Department of Government Efficiency and stated, "Let's make government fun."

Since then, the crypto industry has shifted from behind the scenes to the forefront, becoming a core force in American politics.

Institutional Guiding the Market: Old Coins Resurgence, DeFi Revival

With institutional involvement, the ISO20022 series tokens led by XLM, IOTA, HBAR, etc., are beginning to take off. The second half of the year sees the start of a bull market with a fundamental difference from the first half of the year. In the first half of the year, catalyzed by the ETF's positive news, the market followed the hype of memes and AI, forming a situation where "hot coins" saw much greater gains than other tokens. In the second half of the year, Trump brought a compliant breeze to crypto. ISO 20022, as the standard for electronic data exchange between financial institutions, covers the financial information transmitted between financial institutions. ISO 20022 is more advanced than the traditional formats used by banks, supporting a larger amount of data and faster processing speeds. If a token complies with ISO 20022, it will be given priority for international payments. As a result, institutions have begun large-scale acquisitions, and compliant assets have repeatedly made it to the list of top gainers.

ISO20022 Migration Timetable, Image Source: Cryptopolitan

If Trump initiated the institutional bull run, then DeFi has become an area that traditional old money can earliest and most easily access. One of the most representative entities is World Liberty Financial (WLFI), closely related to Trump.

WLFI was officially launched in September this year and claims to be a DeFi platform unrelated to Trump himself. However, on the WLFI website, Trump is listed as the "Chief Crypto Advocate," while his sons Donald Trump Jr., Eric Trump, and Barron Trump hold positions as "Ambassadors."

Since November this year, WLFI has made large-scale purchases of various mainstream and emerging cryptocurrencies through a major wallet address. In addition to flagship cryptocurrencies like BTC and ETH, the WLFI wallet made purchases at an average price of 25.5 for LINK, 324.4 for AAVE, $1 for ENA, and $1.86 for ONDO.

WLFI Wallet's Cryptocurrency Holdings, Image Source: Arkham

As we can see, despite experiencing several pullbacks after breaking the six-digit mark and a significant plunge driven by hawkish Fed interest rate news, as of December 19, the tokens acquired by WLFI still showed strong performance within a 30-day timeframe. With the U.S. President entering the fray, all investors and institutions gained full confidence. Even after brief downturns, these tokens are expected to rebound strongly due to robust market consensus. Some vigilant institutional investors have already started to opt for "one-click follow" of Trump. For instance, ArkStream Capital doubled down on Ethena after Trump took office and reaped generous returns.

Following the end of the election, market funds and attention have also shifted towards these institutional strategies. Concepts like grayscale, which dominated the entire crypto sphere in 2021, are back in the spotlight, and the Coinbase 50 Index has become a secondary investment benchmark. In the era of "money picking," selecting tokens with high growth potential to maximize capital utilization has become the most crucial lesson in secondary trading. Which altcoins should you buy to outpace the market average? Instead of blindly following KOL investment calls, it's better to let grayscale and Coinbase "work" for you.

Using Grayscale's decentralized finance (DeFi) fund as an example, this fund is one of the first securities solely invested in a basket of decentralized finance applications, including targets like UNI, AAVE, LDO, MKR, and SNX. These tokens in DeFi funds have performed well post-election, with the NAV per share soaring from $13 to $35.

Grayscale DeFi Fund List and Token Performance, Image Source: Grayscale Official Website

Similarly, Grayscale's Decentralized AI Fund and mainstream coin funds have also shown outstanding performance. Apart from Grayscale, Coinbase has also begun actively positioning itself in the crypto industry. With the aim of "top companies set standards, second-rate companies build brands, third-rate companies produce products," Coinbase established COIN50, a premier global digital asset benchmark index composed of the top 50 market capitalization cryptocurrencies in a weighted manner, mirroring the S&P and Nasdaq. The tokens in the Coin50 index have also become a cryptocurrency barometer.

The COIN50 Index achieved a 68.30% return in the first 30 days after its launch, while the 90-day return reached 99.64%. This astonishing return was possible even with BTC and ETH accounting for 70% of the weight. It is evident that excluding large-cap coins such as BTC and ETH, the returns of other crypto assets within this index are quite exaggerated.

Coin50 Index, Grayscale Trust Funds, and WLFI Crypto Asset Collection, images sourced from the internet

Looking ahead to the year 2025, one can envision the existence of not only mainstream coin ETFs and crypto indices, but also potential "knockoff" ETFs. In the traditional financial markets, the first ETF, Standard & Poor's Depositary Receipts (SPDR S&P 500 ETF), was listed on the New York Stock Exchange in 1993. From 2000 to 2009, the U.S. ETF market rapidly expanded, encompassing diverse asset categories such as broad-based, sector-specific, Smart Beta, fixed income, and commodity ETFs. The crypto market is still in its early stages compared to the mature traditional financial markets, indicating that American institutions will certainly further invest in "knockoff" ETFs and indices.

In 2024, Bitcoin's fourth halving cycle concluded with a grand finale during the institutional bull run that emerged after Trump took office!

On May 13, S&P Dow Jones Indices announced that Coinbase would officially replace Discover Financial Services in the S&P 500 on May 19. While other companies like Block and MicroStrategy, closely tied to Bitcoin, were already part of the S&P 500, Coinbase became the first cryptocurrency exchange whose primary business is in the index. This also signifies that cryptocurrency is gradually moving from the fringes to the mainstream in the U.S.

On the day of the announcement, Coinbase's stock price surged by 23%, surpassing the $250 mark. However, just 3 days later, Coinbase was hit by two consecutive events: a hack where employees were bribed to steal customer data and a demand for a $20 million ransom, and an investigation by the U.S. Securities and Exchange Commission (SEC) into the authenticity of its claim of having over 100 million "verified users" in its securities filings and marketing materials. These two events acted as mini-bombs, and at the time of writing, Coinbase's stock had already dropped by over 7.3%.

Coincidentally, Discover Financial Services, being replaced by Coinbase, can also be considered the "Coinbase" of the previous payment era. Discover is a U.S.-based digital banking and payment services company headquartered in Illinois, founded in 1960. Its payment network, Discover Network, is the fourth largest payment network apart from Visa, Mastercard, and American Express.

In April, after the approval of the acquisition of Discover by the sixth-largest U.S. bank, Capital One, this well-established digital banking company of over 60 years smoothly handed over its S&P 500 "seat" to this emerging cryptocurrency "bank." This unexpected coincidence also portrayed the handover between the new and old eras in Coinbase's entry into the S&P 500, resembling a relay race scene. However, this relay baton also brought Coinbase's accumulated "external troubles and internal strife" to a tipping point.

Side Effects of ETFs

Over the past decade, cryptocurrency exchanges have been the most stable "profit machines." They play a role in providing liquidity to the entire industry and rely on trading fees to sustain their operations. However, with the comprehensive rollout of ETF products in the U.S. market, this profit model is facing unprecedented challenges. As the leader in the "American stack," with over 80% of its business coming from the U.S., Coinbase is most affected by this.

Starting from the approval of Bitcoin and Ethereum spot ETFs, traditional financial capital has significantly onboarded users and funds that originally belonged to exchanges in a more cost-effective, compliant, and transparent manner. The transaction fee revenue of cryptocurrency exchanges has started to decline, and this trend may further intensify in the coming months.

According to Coinbase's 2024 Q4 financial report, the platform's total trading revenue was $417 million, a 45% year-on-year decrease. The contribution of BTC and ETH's trading revenue dropped from 65% in the same period last year to less than 50%.

This decline is not a result of a decrease in market enthusiasm. In fact, since the approval of the Bitcoin ETF in January 2024, the inflow of BTC into the U.S. market has continued to reach new highs, with asset management giants like BlackRock and Fidelity rapidly expanding their management scale. Data shows that BlackRock's iShares Bitcoin ETF (IBIT) alone has surpassed $17 billion in assets under management. As of mid-May 2025, the cumulative net inflow of 11 major institutional Bitcoin spot ETFs on the market has exceeded $41.5 billion, with a total net asset value of $1214.69 billion, accounting for approximately 5.91% of the total Bitcoin market capitalization.

Chart showing the trend of net outflows for Grayscale among the 11 institutions

Institutional investors and some retail investors are shifting towards ETF products, partly due to compliance and tax considerations. On one hand, ETFs have much lower trading costs compared to cryptocurrency exchanges. While Coinbase's spot trading fee rate varies annually in a tiered manner but averages around 1.49%, for example, the management fee for IBIT ETF is only 0.25%, and the majority of ETF institution fees fluctuate around 0.15% to 0.25%.

In other words, the more rational users are, the more likely they are to move from exchanges to ETF products, especially for investors aiming for long-term holdings.

According to multiple sources, several institutions, including VanEck and Grayscale, have submitted applications to the SEC for a Solana (SOL) ETF, with some institutions also planning to submit an XRP ETF proposal. Once approved, this may trigger a new round of fund migration. According to a report submitted by Coinbase to the SEC, as of April, the platform's trading revenue from XRP and Solana accounted for 18% and 10%, nearly one-third of the platform's fee revenue.

However, the Bitcoin and Ethereum ETFs passed in 2024 also reduced the fees for these two tokens on Coinbase from 30% and 15% to 26% and 10%, respectively. If the SOL and XRP ETFs are approved, it will further undermine the core fee revenue of exchanges like Coinbase.

The expansion of ETF products is gradually weakening the financial intermediary status of cryptocurrency exchanges. From their original roles as matchmakers and clearers to now gradually becoming mere "on-ramps and off-ramps" for funds, exchanges are seeing their marginal value squeezed by ETFs.

Robinhood Takes a Stand, Traditional Brokerages Join the Fray

On May 12, 2025, SEC Chairman Paul S. Atkins gave a keynote speech at the Tokenization and Cryptocurrency Working Group roundtable. The theme of his speech revolved around "It is a new day at the SEC," where he indicated that the SEC would not approach enforcement and regulation the same way as before but would instead pave the way for cryptocurrency assets in the U.S. market.

With signs of cryptocurrency compliance such as the SEC's "NEW DAY" declaration, an increasing number of traditional brokerages are attempting to enter the cryptocurrency industry. One of the most representative cases is the well-known U.S. brokerage Robinhood, which began expanding its crypto business in 2018. By the time of its IPO in 2021, Robinhood's crypto business revenue accounted for over 50% of the company, with a significant boost from the Dogecoin "moonshot" promoted by Musk.

In Q1 2025 earnings report, Robinhood showcased strong growth, especially in revenue from cryptocurrency and options trading. Fueled by Trump's Memecoin, cryptocurrency-related revenue reached $250 million, nearly doubling year-over-year. Consequently, Robinhood Gold subscription users reached 3.5 million, a 90% increase from the previous year, with the rapid growth of Robinhood Gold providing the company with a stable source of income.

Meanwhile, RobinHood is actively pursuing acquisitions in the cryptocurrency space. In 2024, it announced a $2 billion acquisition of the long-standing European cryptocurrency exchange Bitstamp. Additionally, Canada's largest cryptocurrency CEX, WonderFi, which recently went public on the Toronto Stock Exchange, also announced its integration with RobinHood Crypto. After obtaining virtual asset licenses in the UK, Canada, Singapore, and other markets, RobinHood has taken a proactive approach in the compliant cryptocurrency trading market.

Furthermore, an increasing number of brokerage firms are exploring the same path. Futu Securities, Tiger Brokers, and others are also dipping their toes into cryptocurrency trading, with some having applied for or obtained the VA license from the Hong Kong SFC. Although their user bases are currently small, traditional brokerages have a natural advantage in user trust, regulatory licenses, and low fee structures. This could pose a threat to native cryptocurrency platforms in the future.

User Data Breach: Is Coinbase Still Secure?

In April 2025, security researchers discovered that some Coinbase user data was leaked on the dark web. While the platform initially responded by attributing it to a "technical misinformation," it still raised concerns among users regarding its security and privacy protection. Just two days before Dow Jones Indexes announced Coinbase's addition to the S&P 500 Index, on May 11, 2025, Coinbase received an email from an unknown threat actor claiming to have obtained customer account information and internal documents, demanding a $20 million ransom to keep the data private. Subsequent investigations confirmed the data breach.

Cybercriminals obtained the data by bribing overseas customer service agents and support staff, mainly in "non-U.S. regions such as India." These agents abused their access to Coinbase's internal customer support system and stole customer data. As early as February this year, blockchain detective ZachXBT revealed on X platform that between December 2024 and January 2025, Coinbase users lost over $65 million to social engineering scams, with the actual amount potentially higher.

Among the victims was a well-known figure, 67-year-old Ed Suman, an established artist in the art world for nearly two decades, having been involved in the creation of artworks such as Jeff Koons' "Balloon Dog" sculpture. Earlier this year, he fell victim to an impersonation scam involving fake Coinbase customer support, resulting in a loss of over $2 million in cryptocurrency. ZachXBT critiqued Coinbase for its inadequate handling of such scams, noting that other major exchanges have not faced similar issues and recommending Coinbase to enhance its security measures.

Amidst a series of ongoing social engineering incidents, although there has not been any impact on user assets at the technical level so far, it has raised concerns among many retail and institutional investors. Especially institutions holding massive assets on Coinbase. Just considering the U.S. BTC ETF institutions, as of mid-May 2025, they collectively hold nearly 840,000 BTC, and 75% of these are custodied by Coinbase. If we price BTC at $100,000, this amount reaches a staggering $63 billion, which is equivalent to the nominal GDP of two Iceland in the year 2024.

Visualization: ChatGPT, Source: Farside

In addition, Coinbase Custody also serves over 300 institutional clients, including hedge funds, family offices, pension funds, and endowments. As of the Q1 2025 financial report, Coinbase's total assets under management (including institutional and retail clients) reached $404 billion. The specific amount of institutional custodied assets was not explicitly disclosed in the latest report, but it should still be over 50% based on the Q4 2024 report.

Visualization: ChatGPT

Once this security barrier is breached, not only could the rate of user attrition far exceed expectations, but more importantly, institutional trust in it would undermine the foundation of its business. Therefore, after a hacking event, Coinbase's stock price plummeted significantly.

CEXs are All in Self-Rescue Mode

Facing a decline in spot trading fee revenue, Coinbase is also accelerating its transformation, attempting to find growth opportunities in derivatives and emerging assets. Coinbase acquired a stake in the options platform Deribit at the end of 2024 and announced the official launch of perpetual contract products in 2025. This acquisition fills in Coinbase's gap in options trading and its relatively small global market share.

Deribit has a strong presence in non-U.S. markets, especially in Asia and Europe. The acquisition has enabled Coinbase to gain a dominant position in bitcoin and ethereum options trading on Deribit, accounting for approximately 80% of the global options trading volume, with daily trading volume remaining above $2 billion.

Meanwhile, 80-90% of Deribit's customer base consists of institutional investors, with their professionalism and liquidity in the Bitcoin and Ethereum options market highly favored by institutions. Coinbase's compliance advantage, coupled with its already robust institutional ecosystem, makes it even more suitable. By using institutions as an entry point, it can face the squeeze from giants like Binance and OKX in the derivatives market.

Facing a similar dilemma is Kraken, which is attempting to replicate Binance Futures' model in non-U.S. markets. Since the derivatives market relies more on professional users, fee rates are relatively higher and stickiness is stronger, making it a significant source of revenue for exchanges. In the first half of 2025, Kraken completed the acquisition of TradeStation Crypto and a futures exchange, aiming to build a complete derivatives trading ecosystem to hedge the risk of declining spot transaction fee income.

With the surge of Memecoin in 2024, Binance, OKX, and various CEX platforms began massively listing small-market-cap, highly volatile tokens to activate active trading users. Due to the wealth effect and trading activity of Memecoins, Coinbase was also forced to join the battle, successively listing popular tokens from the Solana ecosystem such as BOOK OF MEME and Dogwifhat. Although these coins are controversial, they are frequently traded, with fee rates several times higher than mainstream coins, serving as a "blood-boosting" method for spot trading.

However, due to its status as a publicly traded company, this practice is a riskier endeavor for Coinbase. Even in the current crypto-friendly environment, the SEC is still investigating whether tokens like SOL, ADA, and SAND constitute securities.

In addition to the forced transformation strategies carried out by the aforementioned CEXs, they are also starting to lay out RWAs and the most talked-about stablecoin payment fields, such as the PYUSD launched through a collaboration between Coinbase and Paypal, Coinbase's support for the Euro stablecoin EURC by Circle that complies with EU MiCA regulatory requirements, or the USD1 launched through a collaboration between Binance and WIFL. In the increasingly crowded trading field, many CEXs have shifted their focus from just the trading market to the application field.

The golden age of transaction fees has quietly ended, and the second half of the crypto exchange platform game has silently begun.

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Within 24 hours, GOONC's market cap soared to 70 million, could GOONC be the next billion-dollar dog on the Believe platform?

Bitcoin has broken $100,000, Ethereum has surpassed 2500, and is Solana's hot streak about to make a comeback?

The current market is in a state of macro euphoria, with GOONC riding the wave today, skyrocketing 10x in just a few hours, reaching a market cap of tens of millions of dollars, trading volume soaring past 50 million, and rumors swirling that the developer may be from OpenAI (unconfirmed but intriguing enough).

The "gooning" Culture in Forums

A ludicrous and absurd Solana meme that some actually buy into.

GOONC is a meme coin that has sprouted from the "gooning" subculture, offering no technological innovation or practical use, its sole function being speculation.

It takes inspiration from an NSFW term "gooning," which refers to a person being deeply immersed in certain content (you know what), eventually entering a nearly religious-like trance.

In Reddit (such as r/GOONED, r/GoonCaves) and some counterculture media outlets (such as MEL Magazine in 2020), "gooning" has gradually transitioned from an adult label to a meme-addicted, digital content and virtual self-indulgence synonym, arguably the epitome of Degen spirit.

GOONC is playing around with this concept, packaging the addictive nature, uselessness, and irony of gooning into a tradable financial product. The project team has made it clear: "We do not solve blockchain problems, we only trade absurdity." Blunt but oddly genuine.

GOONC launched on May 13, 2025, using the meme coin launch platform Believe App's LaunchCoin module on Solana. This tool is highly Degen: zero technical barriers, a few clicks to create a coin, perfect for projects like GOONC that can come up with ideas out of the blue.

The mastermind behind GOONC is also quite something and is the most talked-about, with KOL @basedalexandoor on X platform (alias "Pata van Goon") personally involved. His profile even caught the attention of Marc Andreessen, co-founder of a16z, making onlookers unable to resist speculating if GOONC has a hint of OpenAI lineage.

While this 'OpenAI Endorsement' is currently just community speculation, it is definitely a good card to play to fuel hype. Saying "we are pure speculation" on one hand, while tagging a few "AI + a16z" on the other.

From Wasteland to Moon in One Night

GOONC took off as soon as it launched. After its launch on May 13, 2025, its market capitalization skyrocketed to $22 million within 4 hours, with a trading volume exceeding $25.6 million in 24 hours. According to platform data, the first day of trading saw an astonishing +41,100% surge, soaring from $0.0000001 to $0.02, becoming a "missed-the-boat" situation.

GOONC quickly formed an active trading community post-launch, with a lot of discussion and trading signals appearing on X platform (such as the 292x return signal provided by DeBot). Liquidity pools on exchanges like Raydium and Meteora grew rapidly, supporting high trading volumes and price increases.

The real climax occurred between May 13 and May 14, with the market cap rising to $5.5 million in the morning and directly surpassing $55 million in the afternoon. By the 14th, it briefly approached a $70 million market cap, with the trading volume soaring to $59 million. Some community members even posted screenshots claiming an increase of +85,000%, creating a new myth out of the ruins.

As of 1:30 pm on May 14, the price stabilized around $0.039, with a total market cap and FDV both around $39.6 million, and a 24-hour trading volume of $5.43 million. Active platforms include XT.COM, LBank, Meteora, and others.

Although there was a slight pullback from the peak ($0.07), the coin's popularity remains strong. For a coin that relies purely on "irony + community + X post" to thrive, this performance is already at a stellar level.

Currently, the background of the token's development team is not transparent, increasing the potential risk of a rug pull. Rugcheck.xyz warns that the creator of the GOONC contract may have permission to modify the contract (e.g., change fees or mint additional tokens), posing certain security risks.

Community members speculate that the meteoric rise of GOONC may be the "last hurrah".

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After Surging 40%, Has Ethereum Price Peaked Upon Exiting the Craze?

Whether you are an insider or an outsider, these days you must be familiar with the news about Ethereum. The reason is simple, causing Ethereum enthusiasts to sigh with emotion and almost throwing off-guard those who defend Ethereum, Ethereum, with a "3-day surge of 40%," climbed to the top of the Douyin Hot List.

Where Does the Rally Come From?

As we all know, Ethereum launched the Pectra upgrade on May 7th. This most significant network upgrade since early 2024 integrates the Prague execution layer hard fork and the Electra consensus layer upgrade, significantly improving Ethereum's performance through 11 improvement proposals. The account abstraction feature (EIP-7702) allows users to flexibly manage wallets through social media accounts or multi-signature schemes, reducing the user threshold, attracting more users and developers. The staking mechanism optimization increases the validator ETH cap from 32ETH to 2048ETH and introduces a flexible withdrawal method, making it easier for institutions and individuals to participate in network security, enhancing the market's confidence in Ethereum's long-term value.

At the same time, Pectra optimized the interaction efficiency of Layer 2 networks such as Arbitrum and Optimism, making transactions faster and cheaper, leading to a surge in on-chain activity. As a crucial step for Ethereum's transition from "2G" to "5G," the Pectra upgrade not only enhances network vitality but also "recharges confidence" in the market, directly driving the price increase.

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It's not just Ethereum itself, as Wall Street also brought important bullish news.

The world's largest asset management company, BlackRock, proposed to the SEC allowing Ethereum ETFs for staking. This proposal is expected to elevate Ethereum ETFs from a mere investment tool to a bond-like "interest-bearing asset," bringing investors both capital appreciation and passive income, igniting market optimism about Ethereum's future potential.

Specifically, BlackRock has proposed to amend its S-1 filing to allow investors to create and redeem ETF shares directly with Ethereum instead of the U.S. dollar (i.e., in-kind redemption). This move, combined with its $2.9 billion BUIDL Fund launched in March 2024, aims to deepen the integration of traditional finance with blockchain. The BUIDL Fund is a tokenized fund operating on the Ethereum network, investing in traditional assets such as U.S. Treasury bonds. This setup is highly attractive to institutional investors, as they can not only benefit from Ethereum's price appreciation but also earn stable cash flow through staking.

Robert Mitchnick, BlackRock's Head of Digital Assets, stated in a CNBC interview in March 2025 that the addition of staking functionality will significantly enhance the appeal of the Ethereum ETF. He admitted that when the Ethereum spot ETF was launched in July 2024 without staking functionality, the market demand was lackluster, and staking could be the key to reversing this trend.

Meanwhile, the SEC's shifting stance on cryptocurrency regulation has also fueled this upward trend. During the tenure of the previous SEC chairman, the regulatory approach was tough, and staking was strictly viewed through the Howey test as a potential unregistered security. Therefore, when approving the Ethereum spot ETF in May 2024, staking functionality was explicitly prohibited.

However, with Trump back in the White House and Paul Atkins taking over the SEC, there has been a noticeable relaxation in crypto regulation. Apart from BlackRock, ETF issuers such as Invesco Galaxy, VanEck, WisdomTree, and 21Shares have also submitted applications for similar staking and in-kind redemption.

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If staking ETFs are approved, the benefits are likely to go beyond price appreciation. The introduction of staking functionality could redefine the role of crypto assets, making them more similar to traditional financial products that provide returns and value appreciation, thereby driving Ethereum closer to mainstream finance.

Currently, the SEC still needs to address several decisions related to crypto ETFs, including whether to approve ETFs for Solana, XRP, Litecoin, and even Dogecoin. With the calls for an "altcoin season" growing louder, Ethereum's strong performance may just be the beginning of a larger crypto market frenzy.

In addition, the Trump family-related DeFi project WLFI is also bullish on this wave of rise, with frequent on-chain activities. According to on-chain data analyst @ai_9684xtpa's monitoring, a WLFI-related address is currently borrowing coins to go long on ETH, borrowing 4 million U from Aave to buy 1590 ETH at an average price of $2515 per ETH.

Has Ethereum's Price Peaked in This Wave?

For this epic surge of Ethereum after half a year of silence, the community has indeed gained more confidence and hope, which has also led to a revival of the entire altcoin market. However, amidst the joy, there are also voices of pessimism. Below is a summary conducted by BlockBeats based on community discussions.

The optimists point out that the current market structure is similar to the eve of the bull markets in 2016 and 2020, predicting a life-changing surge in the next 3-6 months, where some altcoins may even achieve astonishing single-day gains of up to 40%.

@liuwei16602825 stated that this surge signifies the return of the bull market as a sure thing. There is no need to worry about a pullback. The driving force behind the surge uses a high-cost isolated operation, fearing a drop more than any retail investor and will definitely do everything to support the price.

Related Reading: "Ethereum Leads the Surge Triggering the 'Altcoin Season' Speculation, How Do Traders View the Future Market?"

The bears mainly believe that this surge is different from the bull market of 2021, as the current market lacks the confidence of large-scale retail investors entering and holding positions for the long term, with funds rotating too quickly.

@market_beggar observed that a Bitfinex E/B whale has started to close positions and believes that if this whale maintains its high-speed position-closing operation for the next few days, it can be inferred that the whale no longer sees the upside potential of ETH, preparing to take profits and exit. The closing time will be a key focus going forward.

@FLS_OTC stated that there are still many uncertainties at the macro level, and the liquidity cannot support a major bull market. At this stage, it is a "last hurrah," not a complete reversal, and will continue to remain in a short position.

@off_thetarget believes that after ETH transitioned from POW to POS, it lost the "gold standard" of mining machine power cost support. The staking economic model led to a breakdown in value anchoring. Additionally, the L2 ecosystem (such as Starknet, zkSync, etc.) suffered from liquidity fragmentation, failing to establish an effective capital inflow mechanism, causing the collapse of the split disc pattern. Furthermore, the ETH community's excessive pursuit of technical narratives divorced from real-world needs resulted in a weak ecosystem growth. Therefore, he believes that ETH's intrinsic value system has crumbled, and the price is bound to plummet to the 800-1200 range, with a decisive short position at 1800.

@Airdrop_Guard, based on the core logic of the "High Probability Trading Strategy," where three sets of underlying logic different trading systems (such as volume depletion, price supply-demand, long/short position funding rate, etc.) simultaneously issue a short signal at the same point (2580), creating a high-probability trading opportunity. He emphasizes that these systems must be based on different algorithms and logics (rather than mere technical indicator overlays). The current ETH trend aligns with the short conditions in multiple independent dimensions of his trading system, hence the decision to short.

Overall, Bitcoin still maintains over 54% market dominance, and institutional funds' continued preference for it may limit the altcoin's upward potential. The market's future direction will depend on multiple factors, such as Bitcoin's price trend, global macroeconomic conditions, and whether funds can effectively rotate from Bitcoin to the altcoin sector.

Although Ethereum's recent leadership in the market has brought about optimistic sentiment, investors still need to remain rational as different sectors of altcoins are likely to show divergence in trends. Whether this round of Ethereum's rise will usher in a true altcoin frenzy may require more time and conducive conditions.

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