Chainfeeds Summary:
In-depth research covering the crypto field, from Altcoins to ETFs, from staking to gaming. 2025 will be a critical year, and its breakthroughs and progress are likely to help shape the long-term development trajectory of the crypto industry for the next few decades. The Chinese version is compiled and published by PANews.
Source:
https://www.panewslab.com/zh/articledetails/m7ryriv7.html
Author:
Coinbase
Viewpoint:
Coinbase: In Q4 2024, the results of the US presidential election became an important catalyst for the crypto market. After Trump's victory, the price of Bitcoin rose by 4-5 standard deviations within three months. However, looking ahead, the Federal Reserve's monetary policy will have a more far-reaching impact on the market. The Federal Reserve is expected to continue to ease monetary policy in 2025, but its pace may be affected by the expansionary fiscal policy. This is because the Trump administration's tax cuts and tariff policies may push up the inflation level, although the overall CPI year-on-year has dropped to 2.7%, the core CPI still hovers around 3.3%, higher than the Federal Reserve's target. The Federal Reserve's primary goal is to curb inflation while promoting full employment. Although the Federal Reserve hopes to achieve balance through a gradual price increase, household consumers are more inclined to see a decline in prices. However, a price decline may lead to a vicious cycle and trigger an economic recession. Nevertheless, due to the decline in long-term interest rates and the resilience of the US economy, a soft landing has become the current basic assumption. The loosening of credit conditions has created a favorable environment for the cryptocurrency market, and the increased circulation of the US dollar and the likely deficit spending of the next administration are expected to drive the purchase of more risk assets, including cryptocurrencies. In 2024, the stablecoin market achieved significant growth, with the total market capitalization growing by 48% to reach $193 billion. Analysts expect that within the next five years, this market may grow to nearly $3 trillion, becoming an important force driving the mass adoption of cryptocurrencies. Stablecoins can facilitate faster and lower-cost transactions, and are therefore favored by payment companies and cross-border businesses. In November 2024, the trading volume of stablecoins reached $27.1 trillion, nearly tripling the 2023 figure. This number includes a large amount of peer-to-peer transfers and cross-border B2B payments, indicating a significant increase in the acceptance of stablecoins by businesses and individuals. Similar to the development of stablecoins, tokenization also made significant progress in 2024. According to data from rwa.xyz, the tokenized real-world assets (RWA) grew from $8.4 billion at the end of 2023 to $13.5 billion in December 2024, an increase of over 60%. This growth was driven by asset management companies and traditional financial institutions (such as BlackRock and Franklin Templeton), who tokenized government securities, money market funds, and other assets using licensed blockchains and public blockchains. This technology makes near-instant cross-border settlement and 24/7 trading possible. Although DeFi was affected by some unsustainable incentive mechanisms in the previous cycle, the current financial system is shifting towards a more sustainable direction. A new financial system centered on real-world applications and transparent governance structures is taking shape. In 2024, the change in the US regulatory environment injected new vitality into DeFi, such as the establishment of a stablecoin management framework and the clear path for traditional institutions to participate in DeFi. At the same time, the trading volume of decentralized exchanges (DEXs) continued to grow, accounting for 14% of the trading volume of centralized exchanges (CEXs), a significant increase from 8% in 2023. In addition, decentralized physical infrastructure networks (DePIN) are redefining the allocation of real-world resources. Helium is a typical representative in this field, building local cellular networks in major cities in the US, Europe, and Asia by distributing tokens to hotspot providers, without the need to invest heavily in traditional infrastructure. Of course, the combination of artificial intelligence (AI) and blockchain technology also brings new possibilities for decentralization. AI applications in DeFi include decentralized data generation, user experience optimization, and the development of autonomous AI agents. Although the value accumulation model of AI-driven innovations in the crypto market is not yet clear, it provides a new narrative direction for the cryptocurrency industry.
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