Digital assets experienced a remarkable surge in 2024.  The prospect of regulatory clarity and a “crypto-friendly” U.S. Administration propelled the total market capitalization of the sector to an all-time high of +$3.79 trillion with the price of bitcoin reaching +$108,000 in December 2024. Lawmakers calling for a national Bitcoin Strategic Reserve have gained traction in several countries including the United States, Japan, Poland, and Brazil where a bill was proposed to hold up to 5% of the country’s international reserves in bitcoin, while serving to back their forthcoming Central Bank Digital Currency (CBDC). Governments worldwide hold around 2.45% of bitcoin’s total supply of 21 million, with the United States, China, and U.K. serving as the top three largest holders.

Reminiscent of early internet adoption in 1998, monthly active wallet addresses reached an all-time high of 220 million in September 2024.  Accelerating adoption is the trend towards cheaper and faster transactions on Ethereum via Layer-2 (L2) scaling solutions.  Emerging from this development are “Economic Zones”, L2 networks with shared standards for interoperability such as the Optimism Superchain, zkSync Elastic Chain, and Polygon AggLayer. These solutions strive to create a unified network of blockchains and user-friendly experience, analogous to the internet we use today. 

Buenos Aires in Argentina became the first government to launch self-sovereign digital identities for their 3.6 million citizens on zKSync Era

The Total Value Locked (TVL) on Ethereum L2 networks is +$54 billion with +$27 billion on the Superchain including Base, OP Mainnet, and World Chain, founded by Sam Altman of OpenAI.  Base, incubated by Coinbase, has experienced an increase of 2390% of monthly active users from January to December 2024.  Other additions to the Superchain in 2024 include Ink built by digital asset exchange Kraken and Soneium founded by multinational conglomerate Sony Group.

The Elastic Chain experienced institutional adoption in 2024.  Buenos Aires in Argentina became the first government to launch self-sovereign digital identities for their 3.6 million citizens on zKSync Era. Over 60 documents from birth certificates to citizen credentials can be directly owned and managed by citizens, accessible through the QuarkID application, and secured by the blockchain.  Deutsche Bank, with +$1.4 trillion AUM, is following the trend by launching its own “public and permissioned” L2 on Ethereum, leveraging zkSync technology.  This strategy speaks volumes to a wider trend of corporations, governments, and institutions moving onchain.

2024 witnessed an acceleration of adoption and products released by corporations and institutions, including the tokenization of real-world assets (RWAs) on public blockchains.  The total amount of RWAs onchain are +$15 billion and includes assets such as commodities, stocks, and U.S. Treasuries.  The total value of tokenized U.S. Treasuries are +$3.96 billion, a 414% increase from January to December 2024. Hashnote (USYC), BlackRock USD Institutional Digital Liquidity Fund (BUIDL), Franklin OnChain U.S. Government Money Fund (FOBXX), and Ondo (USDY) are the top four tokenized U.S. Treasury products by market capitalization. The +$3.96 billion of tokenized U.S. Treasuries are issued on public blockchains including Ethereum, Stellar, Arbitrum, and Solana.

The global payments industry handled 3.4 trillion transactions and accounted for $1.8 quadrillion in value during 2023 according to McKinsey & Company.  The acquisition of ‘Bridge.xyz’ by Stripe for $1.1 billion exemplified the significance of stablecoins in the future global payments landscape.  For a fraction of a cent, stablecoins facilitate transactions at the speed of the internet. Globally accessible and operating without gatekeepers, anyone can build a payments platform on stablecoin infrastructure.  According to VISA, +161 million active unique addresses sent +4.4 billion transactions worth +$25.7 trillion in the past 12 months.  The market capitalization of the entire stablecoin sector reached an all-time high of +$204 billion in December 2024 with around 67% of the market share denominated by Tether USDT and 21% in Circle USDC.  Collectively, stablecoin issuers are the 18th largest foreign holders of U.S. debt, surpassing countries such as Germany and South Korea.  This trend may continue as U.S. denominated stablecoins from traditional payments giants such as PayPal or more products with banking partners proliferate, such as the involvement of DBS and Standard Chartered with the Global Dollar Network.

The TVL of the Decentralized Finance (DeFi) market reached +$140 billion in December 2024.  Base is the largest Ethereum L2 on the Superchain by TVL, starting the year with +$751 million in assets, and ending with around $14 billion. Aerodrome is the top Decentralized Exchange (DEX) on Base by TVL with +$1.35 billion in assets and +$111 billion worth of trading volume in 2024. Adoption is credited to the protocol’s “MetaDEX” approach which combines features from Curve, Convex, and Uniswap.  Despite Aerodrome’s adoption, Uniswap remained the top DEX by TVL with +$5.87 billion in assets and +$736 billion worth of trading volume in 2024. Uniswap announced the launch of Unichain, a DeFi-native Ethereum L2 on the Superchain, representing a shift from general purpose blockchains to those optimized for a specific purpose.

From the launch of Bitcoin in 2009 to onchain AI agents in 2024, as blockchain technology and its consumer applications continue to mature, we're witnessing the birth of a borderless economy, one that promises digital property rights, self-sovereign identities, and greater accessibility for people worldwide. As we look to 2025, it's clear that this new digital frontier is reshaping our understanding of money, value, and economic participation, offering unprecedented opportunities for individuals and businesses alike.

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