Three Crypto Trends to Watch in 2024
As prices surge, applications mature, and institutional adoption reaches a tipping point, the crypto industry is entering a new era of growth. Regulators are also considering new regulations that could bring stability to the industry. Here are three key trends that are shaping the crypto landscape.
1. Payments Gain Traction as the Killer App of Crypto
Stablecoins are becoming a transformative force in digital finance. The number of stablecoins in circulation has grown from $5 billion in 2020 to over $170 billion in December 2024. Their monthly transfers have surpassed traditional payment networks in transaction volume, and they have become a significant holder of US debt.
These fiat-backed digital assets have the potential to reduce friction in global money movement. Mobile wallet adoption is rapidly growing in emerging markets, creating a large market opportunity, and financial institutions are taking notice.
Stripe’s $1.1 billion acquisition of the crypto company Bridge in October could signal a growing institutional recognition of stablecoins’ potential. This could validate the staying power and legitimacy of blockchain technology.
Given the advantages in speed, efficiency and transparency, blockchain technology is gradually blending into conventional financial technology, becoming the unseen back-end to many front-end apps that are already familiar to users.
In 2024, nearly 20% of fintech VC investment went to companies building with crypto technology, more than double the share from four years ago.
The traditional financial system is taking steps to accept crypto, such as crypto ETFs. These ETFs offer a wrapper that rebrands crypto from a niche technological experiment to a legitimate, investable asset class.
However, challenges remain, including regulatory ambiguity and infrastructure gaps. The nascent ETF ecosystem still faces fundamental questions of asset allocation, risk metrics, and valuation methodologies, making this a pivotal moment of institutional adaptation and financial innovation.
2. Decentralized AI Enters the Chat
Decentralized AI is one of the most promising crypto use cases to emerge in 2024. This area involves blockchain networks and companies creating scalable AI infrastructure to rival centralized large language models.
Networks tuned specifically for AI tooling, such as NEAR protocol and Bittensor, are experiencing explosive growth.
The economics of tokenized networks create a marketplace for building and running AI models, which could encourage the distribution of computing resources better than a centralized company could.
VC investment into companies combining AI and crypto increased 2x in 2024.
Significant challenges remain. The immense capital requirements for training LLMs are a major hurdle. Data access also poses a barrier, as decentralized models face competition from centralized giants that possess vast amounts of user data.
3. Web3 Gaming: If You Build It, They Will Come
Web3 gaming is one of the most active user groups within crypto. On-chain games attracted 5.5 million daily active wallets in Q3 2024, the most of any sector.
Web3 gaming has the potential to power on-chain economies by driving demand for tokenized products and services. So far, despite continued growth, it’s yet to fully achieve that vision. The key is a single, high-quality game that can drive mass adoption.
Game development takes time, and many titles are still in development. Despite challenges, the overall commitment to expanding the technology remains strong, with community-driven projects showcasing innovation in engagement and gameplay.
In 2024, roughly 23,000 developers were building crypto games every month, and that number is likely to rise as lower fees on L2 solutions further incentivize builders and users alike.
Looking Ahead
As crypto regulations evolve and Bitcoin continues to surge, the industry is poised for significant change. These trends, along with regulatory developments and the performance of Bitcoin, warrant close observation as the crypto space continues to evolve.
