Meme Coins, L1s, and Stablecoins—Coin Metrics Breaks Down 2024’s Crypto Revolution

Meme Coins, L1s, and Stablecoins—Coin Metrics Breaks Down 2024’s Crypto Revolution

The year 2024 marked a transformative period for the cryptocurrency market, highlighted by groundbreaking developments, record-breaking milestones, and emerging trends, as detailed in Coin Metrics’ “State of the Network” report by Tanay Ved.

Inside 2024’s Crypto Transformation

2024 saw remarkable growth in the cryptocurrency space, beginning with the launch of spot Bitcoin exchange-traded funds (ETFs) in January. These ETFs attracted massive attention, accumulating over $105 billion in assets under management and holding 5.6% of Bitcoin’s (BTC) total supply. This development played a significant role in propelling Bitcoin to a new all-time high of $73,000 in Q1, setting a solid foundation for the bullish momentum that carried through the year.

Despite a mid-year period of consolidation, Bitcoin’s price surged past the $100,000 mark by year’s end, fueled by institutional adoption, a pro-crypto administration, and favorable market conditions signaled by a rate-cutting cycle following the U.S. presidential election.

Bitcoin, Meme Coins, and L1 Platforms Soar

Bitcoin stood out as the year’s top performer, gaining an impressive 125%. Solana (SOL) and Ethereum (ETH) also posted substantial gains of 78% and 44%, respectively. Meme coins, particularly Dogecoin (DOGE) and Pepe (PEPE), saw renewed retail interest, contributing to their rising popularity. At the same time, legacy cryptocurrencies like XRP and Stellar (XLM) experienced unexpected comebacks, demonstrating the dynamic nature of the crypto space.

Alternative layer one (L1) platforms like Sui (SUI) and decentralized finance (DeFi) protocols such as Aave gained increasing attention. This thematic shift reflected changing investor preferences, shaped by market catalysts and technological advancements.

“Alternative Layer-1s like Sui (SUI) and established blue-chip DeFi protocols like Aave also gained traction, reflecting investor sentiment and thematic rotations in 2024,” explained Ved.

Institutional Engagement and Ethereum’s Scaling Solutions

Institutional involvement was a key driver in 2024’s market performance. One notable trend was the rise of Ethereum layer two (L2) rollups and the implementation of Ethereum Improvement Proposal (EIP)-4844, also known as "blobs." This innovation reduced transaction costs and improved Ethereum’s scalability. However, this shift also reduced the value accrual for Ethereum (ETH) holders, presenting a challenge for Ethereum's economic model.

The April Bitcoin halving event further reshaped the market by reducing daily Bitcoin issuance to 450 BTC. Miners responded by adopting more efficient hardware and diversifying into AI data center operations.

Stablecoins Continue to Grow in Importance

Stablecoins played an increasingly central role in global financial infrastructure in 2024, with their aggregate supply surpassing $210 billion. Tether (USDT) and USD Coin (USDC) remained dominant, while tokenized securities began to gain traction. Blackrock’s launch of the BUIDL fund exemplified this trend, highlighting stablecoins’ growing utility in payments, savings, and liquidity provisioning.

Regulatory Evolution and the U.S. Election Impact

The regulatory landscape in 2024 also evolved, with the European Union introducing stablecoin-specific requirements under the Markets in Crypto-Assets (MiCA) regulation, reshaping the Euro-pegged stablecoin sector. Meanwhile, the 2024 U.S. presidential election proved transformative for the crypto market. The pro-crypto policies of the new administration fueled market optimism, propelling Bitcoin past $100,000 and driving substantial growth in prediction markets and smart contract platforms.

However, uncertainties remain regarding the timeline and implementation of crypto-friendly policies, leaving the industry cautiously optimistic as it heads into 2025.