After a significant growth of 109% in 2023, the crypto market continued to rise in the first half of 2024, with the total market capitalization increasing by 37.3%. This growth was mainly driven by a 60.2% gain in the first quarter of the year, before giving back some gains in the second quarter, with the market value falling by 14.3%.
The successful launch of a U.S. spot Bitcoin exchange-traded fund (ETF) in January marked a critical moment for the industry and triggered a period of bullish sentiment and positive inflows.
While the initial price reaction was muted, subsequent months saw strong gains as the market digested the impact of ETFs in attracting new capital, increasing investor accessibility, and strengthening the acceptance of cryptocurrencies as mainstream investments.
It’s worth noting that several narratives gained momentum in the first half of the year — for example, the points meta, restaking hype, memecoins mania, and airdrop season, to name a few. While some of these narratives may have died down, they were certainly strong drivers of on-chain activity and transactions in the first half of the year.
Going forward, we’ll be keeping a close eye on the Fed’s interest rate policy, spot Ethereum ETF approvals and developments, as well as watching for the emergence or resurgence of crypto-specific narratives by monitoring on-chain metrics. We are aware of the structural drag caused by the large number of tokens that will be unlocked in the coming months and years, and urge investors to conduct their own research. The good news is that in the past few months, the valuations of many tokens have corrected and returned to more reasonable levels.
Here is a summary of some key takeaways from the report: (The full Binance report can be viewed here )
1. Layer1 & Layer2 of the public chain
Layer 1 (L1) has had a strong start to the year, with Bitcoin continuing to gain market dominance following the fourth halving, the launch of the Runes Protocol, and the approval of a US spot ETF (attracting over $14 billion in inflows to date). Ethereum went through the reset outbreak and the EIP-4844 update, the BNB chain continued to work on opBNB and Greenfield, and Solana excelled in the memecoin space and launched blockchain links (blinks).
The first half of 2024 is the airdrop season in the Layer 2 (L2) field, especially the zero-knowledge (zk) project. The promise of incentives attracted massive capital inflows into the L2 chain, bringing L2's total value locked (TVL) to $43 billion, a 90% increase in just the first 6 months.
2. DeFi
2024 has witnessed a large influx of capital into decentralized finance (DeFi), driving TVL year-to-date ("YTD") growth by 72.8%, from US$54.4 billion at the beginning of the year to US$94.1 billion. This growth has benefited nearly all DeFi sectors, whether major markets or niche markets, prompting some protocols to bring original elements of finance on-chain that were previously unachievable.
3. Stable currency
The stablecoin market has seen a significant recovery and is currently just 14.5% below its April 2022 peak before the TerraUSD (UST) crash. As of June 30, 2024, the stablecoin market capitalization was $161 billion, a two-year high. While Tether’s USDT continues to dominate, Circle’s USDC and Ethena’s USDe have also increased their market share.
4. NFT
The NFT market experienced a turbulent first half, with sales declining and floor prices for major projects falling by more than 50%. Blur continues to dominate, driven by the BlastToken airdrop, while Pudgy Penguins has seen some success with its physical toys. Bitcoin NFTs also continue to perform well.
5. SocialFi
SocialFi continues to grow, with the Lens Protocol announcing the upcoming launch of its zk chain, Lens Network. Farcaster's user growth continued after the launch of Frames, and friend.tech released their Token and v2. The Fantasy.top trading card game is also a notable highlight.
6.GameFi
The Web3 gaming sector had a strong performance in the first quarter, but the market capitalization of gaming project tokens fell sharply in the second quarter along with the rest of the Altcoin market. Despite the price drop, user growth metrics are healthier than ever, with projects such as Pixels and Hamster Kombat attracting large numbers of players through token airdrops.
Other areas of note include memecoins, artificial intelligence (AI), and decentralized physical infrastructure networks (DePIN). These sectors continue to receive strong attention from investors and the wider community in the first half of 2024.
7. Looking forward to the second half of the year
Heading into the second half of 2024, we continue to have six key themes of particular interest and expect significant progress in these areas throughout the year. These topics cover a variety of narratives and sectors, such as those related to the overall economic environment, the Bitcoin ecosystem, economic applications of ownership, real-world assets (RWAs), and more.
