Crypto Market in 2024: 20 Predictions and Future Outlook

2024 predictions are pure conjectures and contain many biases. They cannot be used as investment advice. They are only for entertainment and do not need to be taken seriously.

L2 remains one of the most pivotal narratives in 2024. With the upgrade of dencun, the cost of L2 will drop significantly, which will trigger the rapid development of the L2 ecosystem. In addition to games, perp, defi, and nft, areas such as social networking and dependence will also usher in an explosive period.

L2 expansion solutions, such as arb, op, zksync, starknet and blast, are competing comprehensively with other public chains. With the implementation of EIP-4844 and the evolution of the data availability layer, these L2 solutions are on par with high-performance public chains in terms of transaction fees and processing speed. Therefore, 2024 will be an important focus of competition among ecosystems such as arbitrum and solana.

3. zksync will launch an economic mechanism in 2024 and become an important force in promoting the explosion of L2.

4. If Starknet achieves a breakthrough, it will start from the full chain game narrative.

In 2024, there may be a situation where the market value of an L2 project exceeds US$100 billion. Even at the peak of the market, this number may reach US$300 billion. However, the final structure of the L2 market will not be determined until after 2024. Nonetheless, after this cycle, the competitive landscape of the L2 market will be basically finalized.

6. The Bitcoin (BTC) ecosystem has begun a series of expansion explorations after the battle of Inscription. These explorations include decentralized indexing, the evolution of inscription systems, decentralized cross-chain technology, zero-knowledge proofs (zk-SNARKs), and second-layer solutions (L2). Once progress is made, the Bitcoin ecosystem will develop and its integration with the Ethereum ecosystem will be accelerated. The exploration of the Bitcoin ecosystem is one of the most compelling evolutions of the current cycle.

Ethereum L1 gradually evolves into a B2B chain. User interaction will mainly occur on L2/L3 and a few high-performance L1s. Ethereum gradually becomes the underlying asset in the encryption field. With the development of modular blockchain, Ethereum will become the most important settlement layer, and the execution layer and part of the DA layer may be outsourced. However, due to underlying security requirements, ETH will still capture the value of the overall ecological growth.

8. As predicted in 2023, modularity will still be an important narrative in 2024, especially in the fierce competition at the DA level. The Ethereum re-pledge field will also enter the DA layer for competition. In the field of modularization, the cosmos ecosystem and the Ethereum ecosystem compete and merge. There will be competition between third-party DA and native DA. Before danksharding was implemented, L2’s urgent market demand led to a certain scale of demand for third-party DA.

9. In addition to the Ethereum and BTC ecosystems, the cosmos and solana ecosystems will also continue to develop, which is consistent with the prediction at the beginning of last year. Cosmos will advance through modularity; Solana will advance through applications. In addition, as the modular blockchain matures, one of the evolutionary directions of Solana is to participate in the broader encryption ecosystem like other L2s, and its integration with Ethereum will be higher, thereby capturing greater value.

10. Web3 games have achieved breakthroughs in L2/L3 (arb, starknet, etc.), and one game has more than one million users (this has not been achieved in 2023, but it should be mature in 2024). Game chains based on Arb will become the forefront of web3 game breakthroughs. Magic will be launched in 2024 with the interoperability of more games in the game chain, which will have important implications for the evolution of web3 games.

11. In addition to integrating nft dex, nft lending, and blast, blur is expected to enter nft perp this year, and even the nft market of L2, btc, and sol ecology. Blur still has the opportunity to play the most important industry in 2024 One of the spoilers.

12. In addition to the explosion of projects on L2, the Ethereum ecosystem is also expected to produce large-scale deflation, thereby achieving value capture. Unlike other L1 chain additional issuance fees that go to miners for security expenses, all new additions and fees are fed back to staking and holding users, which will encourage more users to pledge/re-pledge, thereby further locking in the eth in circulation.

13. Perp in defi will develop on a large scale in 2024, and snx, gmx, gns, dydx, etc. will all generate at least 5 times the transaction volume in 2023; perp is not necessarily an important narrative in the bull market, but There is a high probability that it is one of the tracks with the best fundamentals.

14. The advancement of modular blockchain and cross-chain technology will lead to the integration of the Ethereum ecology, the BTC ecology, and the Solana ecology. This cycle will see the emergence of many currently unknown projects. According to the current ecological evolution of Bitcoin, one of the paths may be Ethereum carrying the second layer of Bitcoin. If it comes true, the integration of Bitcoin and Ethereum will gradually increase. No matter what, the expansion of Bitcoin needs to follow its own native path. If protocols like atomicals can be implemented, it will have an important impact on the ecological development of Bitcoin.

15. Depin has made some breakthroughs in solana and arbitrum. This track is still in the early stages of construction, and more exploratory projects will come out.

16. AI is still a long way from actual implementation, but this does not affect it from becoming one of the important narratives in 2024. AI protocols based on L2 and high-performance public chains will gradually emerge.

17. The Ethereum remortgage track will become one of the important narratives at some point this year.

18, NFT, MEME, and inscriptions will recover at some point, which will also bring an increase in NFT DEX trading volume and provide a market basis for the launch of NFT Perp.

19. Some celebrities have entered the fields of nft, meme, and inscriptions.

20. With the development of L2 and the exploration of high-frequency applications, smart contract wallets have the opportunity to start to emerge in 2024.

21. Risk warning: All the above analysis is only a one-sided observation of technology and market, and may not be correct. Please be sure to maintain your own judgment and do a good job in risk control.

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