The crypto industry has entered a new stage of maturity, driven by increasing global adoption, continuous innovation, and deeper integration with the traditional financial system.
This year, BTC reached new all-time highs in March and December, reflecting huge demand. Meanwhile, DeFi's position in the global economy is steadily consolidating, with capital inflows approaching new highs. Additionally, traditional finance (TradFi) has become more active, with capital flowing into stablecoins and crypto exchange-traded products (ETPs), indicating that crypto is quietly fulfilling its promise to reshape the global financial infrastructure.
This is not just another market cycle, but a critical moment for crypto.
An Atypical Bull Market
At the end of 2023, BTC began to rise, marking the start of a new upward trend.
On March 5, 2024, BTC broke through its previous all-time high, reaching over $73,000; in December of the same year, it broke the $100,000 mark again.
Furthermore, the transfer activity of all digital assets has surpassed the historical highs of the end of 2020 and 2021, indicating that the activity level of this market cycle is far higher than the previous bull market.
From the end of 2023 to the beginning of 2024, DeFi began to show signs of recovery, with its activity level reaching a historical high, as shown below.
The current asset prices and DeFi activity are not the only indicators of market adaptability and resilience - the global adoption of stablecoins, the explosive interest in traditional finance (TradFi), and the emergence of services for new tokenization use cases (as described below) all indicate that crypto is being more widely accepted and integrated into the global economy.
Global Utility Drives the Rise of Stablecoins
Stablecoins are typically pegged 1:1 to the US dollar or other fiat currencies, combining the efficiency, security, and transparency of crypto with the avoidance of the volatility common in other crypto markets.
Although major cryptocurrencies like BTC and ETH often dominate the headlines and offer returns that stablecoins cannot match, stablecoins have surpassed other types of cryptocurrencies in adoption. In recent months, the on-chain transaction volume of stablecoins has exceeded 50%, even reaching 75%.
By providing the stability of the US dollar to anyone with an internet connection, stablecoins offer a critical solution for residents of countries facing currency volatility, both for protecting savings and facilitating commercial transactions.
The increasingly prominent position of stablecoins in overall transaction activity indicates that this asset class has achieved a high level of utility among crypto users.
BTC and ETH ETPs Mark a Historic Convergence of Crypto and Traditional Finance
Traditional finance (TradFi) reached a historic milestone in its validation of crypto in 2024, as the US market launched spot BTC exchange-traded products (ETPs), further enhancing institutional investor interest. Exchange-traded funds (ETFs) - the most popular form of ETP - have generated tremendous interest from retail and institutional investors.
The launch of crypto ETFs has led to a market rally based on this, as these funds provide regulated mainstream investment vehicles that can access crypto, typically attracting investors who may be hesitant about the complexity and security issues of using traditional crypto trading platforms directly.
The trading volume of BTC ETFs has surged, reaching nearly $10 billion per day in March. The inflows into BTC ETFs have also surpassed the net gold ETF (adjusted for inflation) launched in 2005, making it the fastest-growing ETF in history, as shown in the chart below.
On January 10, 2024, the news of the BTC ETF approval was announced, and the BTC price began to rise rapidly, starting trading shortly after.
By providing more convenient crypto access through traditional trading platforms, ETPs can unlock new sources of demand for the underlying assets, which appears to be one of the key factors driving the recent price increase of BTC.
While it is difficult to precisely define the specific impact of the US BTC ETP launch, it is widely believed to have boosted market sentiment and increased institutional exposure to BTC. The surge in demand reflects the unique appeal of ETPs among retail and institutional investors, offering a regulated and familiar way to access BTC without the complexity of managing private key wallets.
Tokenization: Real-World Assets (RWA) Are Growing
The excitement around the large-scale tokenization of real-world assets (RWA) on the blockchain is quietly transforming the landscape of asset management and investment, with many traditional finance (TradFi) giants, such as Franklin Templeton, already staking a claim in this market. Goldman Sachs is reportedly planning to launch a crypto platform focused on tokenization in the next 12 to 18 months.
RWA refers to any valuable asset - tangible or intangible - whose value originates outside the blockchain. Through tokenization, the rights to these assets (from real estate, art, to intellectual property) are represented as tokens on the blockchain. This process not only simplifies the selling and trading of these assets but also increases their accessibility to a wider audience, creating a more efficient and liquid market. RWA also promises to enhance the transparency of investment markets, as all transactions are recorded on-chain.
Currently, most RWA projects focus on tokenizing relatively simple and stable financial instruments, such as US Treasuries, and lending platforms like Goldfinch and Ondo Finance, which rely on the tokenization of RWA as their core, have captured a significant share of the RWA market. According to data compiled by asset management firm 21.co, the total market capitalization of tokenization projects has exceeded $100 billion.
Although still in the early stages, the growing importance of RWA is a critical step towards the future, where most value transfers will take place on the blockchain, facilitating a more unified, open, and frictionless global market.
What Crypto Industry Maturity May Mean for Organizations
When we examine the progress of the crypto ecosystem, it is clear that we are experiencing a significant transformation in perception and utilization. Although the crypto market may experience volatility and prolonged bear market cycles, one trend is consistent: the number of wallets holding a positive balance is growing linearly and continuously. Currently, over 400 million wallets are holding crypto.
While a single wallet does not necessarily mean a single user, as institutions and individuals can manage multiple wallets, the sheer scale of the growing number indicates that crypto adoption is steadily increasing.
As the influence of cryptocurrencies continues to expand, the standards for measuring success in this new paradigm have become increasingly important. For organizations, adapting to on-chain realities is not just about keeping up with technological progress - it also requires a complete re-evaluation of their operating models to leverage the unique opportunities presented by blockchain.
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