The cryptocurrency industry has made significant strides in policy, technology, and user adoption over the past year, signaling expanded activity and broader applications.
Key Highlights
- Crypto activity and usage hit all-time highs
- Cryptocurrency emerged as a pivotal political issue ahead of the U.S. elections
- Stablecoins achieved product-market fit
- Infrastructure upgrades boosted capacity and slashed transaction costs
- Decentralized finance (DeFi) remains popular and growing
- Crypto may address critical challenges faced by AI
- Scalable infrastructure unlocked novel on-chain applications
1. Crypto Activity and Usage Hit All-Time Highs
Never before have so many active crypto addresses existed. In September, 22 million addresses interacted with blockchains at least once—a figure that has more than tripled since late 2023.
Solana drove much of this surge, accounting for ~100 million active addresses, followed by NEAR (31M), Base (22M), Tron (14M), and Bitcoin (11M). Among EVM chains, Base led ahead of BNB Chain (10M) and Ethereum (6M).
Builder interest mirrored these trends:
- Solana’s share rose from 5.1% to 11.2% year-over-year.
- Base grew from 7.8% to 10.7%.
- Bitcoin’s share doubled to 4.2%.
Ethereum still attracts the largest builder share (20.8%), followed by Solana, Base, Polygon (7.9%), and Optimism (6.7%).
Global Adoption
- Mobile crypto wallet users reached 29M in June 2024.
- Top countries: U.S. (12%), Nigeria, India, and Argentina (where stablecoins hedge inflation).
- Estimated 30M–60M monthly active users worldwide—just 5–10% of total crypto holders.
Opportunity: Converting passive holders into active users through improved infrastructure and engaging applications.
2. Crypto as a Political Priority
Cryptocurrency entered national discourse during the 2024 U.S. election cycle.
- Swing states like Pennsylvania and Wisconsin saw crypto search interest jump to 4th and 5th in Google Trends.
- Bitcoin/ETP approvals marked a policy milestone, with $65B in on-chain holdings.
- Bipartisan support for crypto bills (e.g., FIT21) and state-level DAO legalization (Wyoming’s DUNA).
Stablecoins dominated policy discussions:
- 99% are USD-pegged, reinforcing the dollar’s global role.
- Stablecoins now rank among the top 20 holders of U.S. debt, surpassing Germany.
EU/UK led regulatory clarity with MiCA, while the U.S. lagged in CBDC development.
3. Stablecoins: Crypto’s "Killer App"
Stablecoins enable fast, low-cost global payments, with:
- **$8.5T** in 2024 Q2 transaction volume (double Visa’s $3.9T).
- Avg. fees: <$0.01** on Base vs. **$44 for wire transfers.
Usage stats:
- 32% of daily crypto activity (second only to DeFi’s 34%).
- Activity persists independent of market volatility, indicating utility beyond trading.
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4. Infrastructure Upgrades
Blockchains now process 50x more transactions/sec than in 2020, driven by:
- Ethereum L2s (e.g., Base, Arbitrum).
- Dencun upgrade (March 2024), reducing L2 fees by >99%.
Zero-knowledge (ZK) proofs grew cheaper and more popular, enabling scalable, private computations.
Challenge: zkVMs still trail traditional computers in performance.
5. DeFi’s Resilience
DeFi accounts for 34% of daily crypto activity, with:
- $169B TVL across protocols.
- DEXs capturing 10% of spot trading volume (vs. 0% in 2020).
Ethereum’s PoS transition (29% staked, up from 11%) reduced energy use by 99.9%.
DeFi counters U.S. financial centralization, where bank numbers fell 66% since 1990.
6. Crypto x AI Synergies
34% of crypto projects integrate AI (up from 27% in 2023), addressing:
- Centralization risks (e.g., Gensyn democratizes AI compute).
- IP compensation (Story, Near).
Overlap: ChatGPT users heavily overlap with crypto enthusiasts.
7. Emerging On-Chain Apps
New consumer behaviors emerged as fees dropped:
- NFTs: Shift from speculative trading to low-cost social minting (Zora, Rodeo).
- SocialFi: Farcaster-related projects rank among top builder subcategories.
- Prediction markets: Gained traction despite U.S. legal barriers.
Future: Scalability unlocks more AI, gaming, and social applications.
FAQ
Q: What drove crypto’s 2024 growth?
A: Policy wins (ETPs, FIT21), infrastructure upgrades (L2s), and stablecoin adoption.
Q: Are stablecoins replacing traditional payments?
A: They’re complementary—offering cheaper cross-border transfers but lacking broad merchant acceptance.
Q: How does AI benefit from crypto?
A: Decentralized protocols can mitigate AI’s centralization risks and ensure fair creator compensation.
Q: Which chains attract the most developers?
A: Ethereum, Solana, and Base lead, with rising interest in Bitcoin and ZK-focused chains.
Q: What’s next for DeFi?
A: Layer-3 solutions and institutional adoption via regulated products.
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Note: This report synthesizes public data and a16zcrypto’s proprietary insights, excluding speculative or promotional content.