Cryptocurrency activity has reached an all-time high.
As of September 2024, there are 220000000 active addresses that have used the blockchain for transactions at least once. This is three times more compared to the end of 2023. Contributing to this growth is the Solana blockchain (100 million addresses), followed by NEAR Protocol (31 million), Base (22 million), Tron (14 million) and the Bitcoin blockchain (11 million).
Increasing developer interest:
– Ethereum remains the leader in terms of the share of such interest (20.8%); followed by Solana and Base.
– Growth in the activity of digital wallets installed on smartphones: 29,000,000 active users in June 2024. At the same time, the share of users from the US decreased, while countries such as Nigeria, India and Argentina showed growth.
Cryptocurrency has become an important topic of discussion ahead of the US election
Interest in cryptocurrencies has grown noticeably in key states such as Pennsylvania and Wisconsin. The increase in interest is due in part to the launch of exchange-traded funds (ETFs) based on Bitcoin and Ethereum, which have already led to a total investment in these cryptocurrencies to the amount of $ 65 billion, if we talk about US operators of such ETFs.
In the same year, but later than in January, when Bitcoin ETFs were launched in the US, similar exchange-traded funds appeared in Hong Kong, but so far the demand for such financial instruments remains lower there than in the US.
Politicians from both major parties in the US, Democratic and Republican, are increasingly supporting crypto-initiatives. Important steps include a new law in Wyoming that gives legal recognition to DAOs.
Bills such as MiCA in the European Union and the FIT21 initiative in the US are setting new rules for the crypto industry. They are aimed at simplifying the work of crypto companies, as well as protecting users, while creating barriers to illegal activities. These initiatives highlight the desire of the US and European Union governments to find a balance between controlling and encouraging innovation in the fast-growing cryptocurrency sector.
Stablecoins have found their niche in the market
The volume of transactions with stablecoins for the 2nd quarter of 2024 reached 8.5 trillion dollars in the world, exceeding, for example, the volume of operations through Visa cards twice. Most stablecoins (99%) are denominated in US dollars, which works to strengthen the position of the dollar in the global economy.
The average cost of USDC transactions on Ethereum has dropped from $12 (in 2021) to one dollar, and on the Base blockchain to one cent. The use of stablecoins continues to grow even in the face of a decrease in cryptotrading volumes, which confirms the value of stablecoins not only for carrying out investment transactions for the purchase and sale of cryptocurrencies.
The regulation of stablecoins continues to evolve globally. For example, US authorities are considering issuing a sovereign digital dollar (CBDC) to compete with private stablecoin issuers such as Tether and Circle.
Improvements in cryptocurrency infrastructure have reduced costs and increased the capacity of blockchains
Blockchain transaction speeds have increased by an average of more than 50x in four years thanks to the development of Ethereum’s L2 networks and other high-performance blockchains. After the Dencun update, Ethereum L2 commissions have dropped significantly.
Technologies based on zero-knowledge proofs (ZK) have opened new possibilities for scalability and privacy. Despite the successes, ZK-based virtual systems (zkVM) still lag behind traditional computers in terms of performance. In addition, the use of these technologies requires significant computing resources, which is associated with the increasing demand for electricity.
DeFi remains popular and continues to grow
Decentralized finance (DeFi) attracts about 34% of active users in the world of cryptocurrency. More than $169 billion has already been invested in various DeFi protocols.
ETH’s staking share has risen to 29% thanks to Ethereum’s move to Proof-of-Stake consensus. It also drives the creation of new DeFi products, such as ETH-based derivatives, for example.
The crypto industry is helping to solve AI problems
Approximately 34% of crypto projects use AI technologies, especially in infrastructure solutions. As the process of training AI models evolves, blockchain can offer decentralized solutions capable of preventing the monopolization of technology by a few players. So far, companies like OpenAI and Google dominate the neural network market, but decentralized networks offer an alternative, making AI accessible to a wider range of users and developers.
Scalable blockchain infrastructure opens up possibilities for new applications
The reduction of transaction costs in blockchains has stimulated the development of new applications such as social networking on the blockchain. In addition, the segment of games on the blockchain, in particular, based on Ethereum, is developing.
Prediction markets (oracle platforms) are also gaining popularity, especially in the run-up to the US election. All this suggests that new consumer applications are becoming a reality thanks to the increase in the speed of transactions on the blockchain, as well as the decrease in the average size of commissions.