Original author: Pink Brains
Original translation: TechFlow
In the first half of 2024, Bitcoin’s dominance, decentralized AI, the use of DePIN, the rise of Solana, and ETH staking became the main highlights of the market.
Various sub-sectors of DeFi are also booming, driven by new sources of income, airdrop crazes, and meme coins.
Looking ahead to the second half of the year, there are 7 potential trends to watch. At the beginning of 2024, we predicted 12 key trends and ideas to usher in a new bull market wave. Most of them have become hot topics for top cryptocurrencies, with significant growth in price movements, active users, on-chain metrics, developers, and financing activities.
After 6 months, both sentiment and the macro environment have changed. Now it is time to focus on new catalysts for the rest of this year and early 2025.
First, you might want to grab a cup of coffee and bookmark this article for later, it’s going to be a bumpy ride.
Over the next six months, macroeconomic conditions and institutional adoption will be key in shaping the future of cryptocurrencies.
U.S. Macroeconomic Conditions
After two years of record high interest rates, the first rate cut is likely to take place in September. The US presidential election in November, with prediction markets predicting that Donald Trump will be re-elected, could both be positive factors for the cryptocurrency market at the end of the year.
Continued institutional adoption
After approving the US spot BTC ETF, the SEC approved the listing of several spot ETH ETFs, which set the tone for the market trend throughout the year. We expect institutions to explore DeFi, infrastructure, AI and consumer applications in depth.
With these factors in mind, here are 7 exciting areas we think are worth watching in the remainder of 2024 and early 2025.
1. Bitcoin Scalability and DeFi
The Bitcoin market is expanding through ETFs and crypto-native approaches like Ordinals, BRC-20s, and Runes. However, scalability issues are becoming more prominent. @Stacks @citrea_xyz @MerlinLayer 2 @BitlayerLabs @BSquaredNetwork are working on a second-layer solution for BTC.
Early Bitcoin DeFi players include @bounce_bit @babylon_chain @SolvProtocol @MezoNetwork .
2. Ownership Economic Application
Blockchain technology enables users to regain sovereignty over their personal data, creative content, and computing resources. These applications are highly synergistic with the rise of AI and machine learning. Two areas worth paying attention to are:
DePin: @AethirCloud @ionet @rendernetwork @Hivemapper
DeSoc: @farcaster_xyz @LensProtocol
3. Real World Assets
Although rate cuts are imminent, we expect RWAs to benefit from a relatively high interest rate environment. Projects focused on tokenizing treasuries: @OndoFinance , @MountainUSDM , @tangibleDAO , @MakerDAO
Institutional and general lending: @maplefinance
In addition to RWAs, supporting infrastructure such as oracles ( @PythNetwork , @chainlink ), decentralized identity, interoperability ( @LayerZero_Labs , @wormhole ), and fully homomorphic encryption (FHE) for data privacy ( @mindnetwork_xyz , @zama_fhe ) are also expected to gain momentum.
4. Web3 Games
Web3 games are emerging in all genres, from click-to-earn hyper-casual games like @thenotcoin to well-designed @ParallelTCG , @pixels_online , @playSHRAPNEL , and @PirateNation .
A strong and sustainable in-game economy and games running entirely on-chain will be the next big leap for Web3 gaming.
5. Abstract the user experience
The current crypto user experience is fragmented and complex, involving more than 100 multi-chain environments. Users face many challenges when managing wallets, interacting with dApps, and handling assets across blockchains.
Account abstraction and Paymaster have become the new user onboarding standard.
But this is just the beginning.
In the next 6-9 months, new progress is expected in chain abstraction: including key management, gas abstraction, transaction abstraction, and cross-chain interoperability.
Key projects to watch: @ParticleNtwrk , @NEARProtocol , @EverclearOrg , @burnt_xion , @lifiprotocol
6. DeFi sub-field
A broad market rebound will bring a large inflow of funds to DeFi. While we have not seen a major event like the "Uniswap moment", some DeFi sub-sectors have shown strong growth momentum.
Restaking/LR: @eigenlayer , @symbioticfi , @solayer_labs , @Karak_Network , @ether_fi
Lending: @MorphoLabs , @0x fluid , @aave
New market types for derivatives: @HyperliquidX , @SynFuturesDefi , @WhalesMarket , @DriftProtocol
Prediction Markets: @Polymarket , @azuroprotocol
Profit: @pendle_fi
7. New infrastructure
The infrastructure sector raised over $2.58 billion in capital, becoming the largest category of venture capital, demonstrating VCs’ strong interest in scaling solutions, interoperability, modularity, and new blockchain infrastructure.
Some of the top funded projects include: @monad_xyz , @berachain
