Binance 2024 Mid-Year Report: 6 Key Themes to Watch
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Binance 2024 Mid-Year Report: 6 Key Themes to Watch
In the first half of 2024, the total market capitalization of the cryptocurrency market increased by 37.3%, driven by the launch of Bitcoin ETFs and strong growth in decentralized finance (DeFi).
Navigating Web3 tides with focused insightsAuthor: Binance Research
Translation: Baicai Blockchain
After a significant 109% growth in 2023, the crypto market continued its upward trajectory in the first half of 2024, with total market capitalization rising by 37.3%. This growth was primarily driven by a strong 60.2% increase in Q1, followed by a partial retracement in Q2 where market cap declined by 14.3%.
January marked a pivotal moment for the industry with the successful launch of U.S. spot Bitcoin exchange-traded funds (ETFs), triggering a period of bullish sentiment and positive capital inflows. While the initial price reaction was muted, the market gained strong momentum in subsequent months as it absorbed the implications of ETFs in attracting new capital, enhancing investor accessibility, and reinforcing the acceptance of cryptocurrencies as mainstream investments.
Notably, several narratives gained traction during the first half of the year—such as points meta, restaking hype, memecoin mania, and the airdrop season. Although some of these themes have since cooled, they undoubtedly served as powerful drivers of on-chain activity and trading volumes during this period.
Looking ahead, we will closely monitor the Federal Reserve's interest rate policy, the approval and progress of spot Ethereum ETFs, and the emergence or revival of crypto-specific narratives through on-chain indicators. We recognize the structural overhang posed by the large volume of tokens scheduled to unlock in the coming months and years, and urge investors to conduct their own research. The good news is that valuations for many tokens have corrected over the past few months, returning to more reasonable levels.
Below are key highlights from this report:
1. Public Blockchains – Layer 1 & Layer 2
Layer 1 (L1) blockchains performed strongly at the start of the year. Bitcoin maintained its market dominance following its fourth halving, the launch of the Runes protocol, and the approval of U.S. spot ETFs—so far attracting over $14 billion in fund inflows. Ethereum experienced a reset and burst of activity amid the EIP-4844 upgrade, BNB Chain continued development on opBNB and Greenfield, while Solana excelled in the memecoin space and launched blockchain links ("blinks").
The first half of 2024 was an airdrop season for the Layer 2 (L2) ecosystem, especially zero-knowledge (zk) projects. Promised incentives attracted substantial capital into L2 chains, pushing total value locked (TVL) in L2s to $43 billion—an increase of 90% within the first six months alone.
2. DeFi
2024 saw a significant influx of capital into decentralized finance (DeFi), driving year-to-date (YTD) TVL up by 72.8%, from $54.4 billion at the start of the year to $94.1 billion. This growth benefited nearly all DeFi sectors, both major and niche, enabling some protocols to bring previously unattainable financial primitives on-chain.
3. Stablecoins
The stablecoin market rebounded significantly, now only 14.5% below its peak before the TerraUSD (UST) collapse in April 2022. As of June 30, 2024, stablecoin market capitalization reached $161 billion, a two-year high. While Tether’s USDT continues to dominate, Circle’s USDC and Ethena’s USDe have also gained market share.
4. NFTs
The NFT market experienced turbulence in the first half, with declining sales volumes and floor prices of major projects dropping over 50%. Blur maintained its dominance, fueled by the BlastToken airdrop, while Pudgy Penguins achieved some success with physical toys. Bitcoin NFTs also continued to perform well.
5. SocialFi
SocialFi continued evolving, with the Lens Protocol announcing the upcoming launch of its zk chain, Lens Network. Farcaster sustained user growth after launching Frames, and friend.tech released its token and v2. Fantasy.top’s trading card game also emerged as a notable highlight.
6. GameFi
The Web3 gaming sector started strong in Q1, but in Q2, GameFi project tokens saw sharp declines in market capitalization alongside broader altcoin markets. Despite falling prices, user growth metrics were healthier than ever, with projects like Pixels and Hamster Kombat attracting large player bases through token airdrops.
Other noteworthy areas include memecoins, artificial intelligence (AI), and decentralized physical infrastructure networks (DePIN). These sectors continued to attract strong interest from investors and the broader community in the first half of 2024.
7. Outlook for H2
As we enter the second half of 2024, we remain particularly focused on six key themes and expect significant developments across these areas throughout the year. These themes span various narratives and sectors, including those tied to macroeconomic conditions, the Bitcoin ecosystem, ownership economy applications, and real-world assets (RWAs).
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