2024 Crypto Market Outlook: 20 Predictions

The crypto market will experience numerous changes and opportunities in 2024. Below are 20 predictions for market development over the next year, for reference only and not constituting investment advice.

1. The second-layer network (L2) will continue to be a market hotspot. With the launch of the Ethereum Dencun upgrade, the significant decrease in L2 fees will drive the flourishing of the ecosystem. In addition to games, perpetual contracts, DeFi, and NFTs, fields such as social and decentralized infrastructure will also enter a period of explosive growth.

2. Multiple L2 projects will compete comprehensively with other public chains. With the implementation of EIP-4844 and the evolution of data availability layers, L2 will match high-performance public chains in terms of costs and speed. The competition between a well-known L2 and the Solana ecosystem will be a major highlight in 2024.

3. A well-known L2 will launch an economic mechanism in 2024, becoming an important force driving the explosion of L2.

4. If a certain L2 project achieves a breakthrough, it will open up the narrative of the entire chain game.

5. In 2024, an L2 project is expected to have a diluted total market value exceeding 100 billion dollars; in an optimistic scenario, it could break through 300 billion dollars during peak cycle periods. The landscape of the L2 market will not be fully determined in 2024, but it will basically take shape after this cycle.

6. The Bitcoin ecosystem has opened the door to innovation after experiencing the inscription boom. Multiple teams are exploring scalability solutions, including decentralized indexing, evolution of the inscription system, cross-chain, zero-knowledge proofs, and L2, among others. Once progress is made, it will promote the development of the Bitcoin ecosystem and accelerate its integration with the Ethereum ecosystem. This will be one of the most noteworthy evolutions in this cycle.

7. Ethereum L1 will gradually evolve into an enterprise-level blockchain, with most interactions of ordinary users taking place on L2/L3 and a few high-performance L1s. Ethereum will become the underlying asset in the encryption field. As modular blockchains develop, Ethereum will become the most important settlement layer, but most execution layers and some data availability layers will be outsourced. However, due to underlying security requirements, ETH will still capture the value of overall ecological growth.

8. Modularity will continue to be an important narrative, especially with intense competition in the data availability layer. The Ethereum restaking sector will also enter this race. The Cosmos ecosystem and the Ethereum ecosystem have both competition and integration in the modularity field. Third-party and native data availability solutions will compete, and the urgent demand for L2 will create market space for third-party solutions before the full sharding technology is realized.

9. In addition to the Ethereum and Bitcoin ecosystems, the Cosmos and Solana ecosystems will also continue to develop. Cosmos will make progress through modularization; Solana, on the other hand, relies on the development of its application ecosystem. As modular blockchains mature, Solana may evolve towards L2, participating in a broader crypto market and increasing its integration with Ethereum, thereby capturing greater value.

10. Web3 games will achieve breakthroughs on L2/L3( like certain well-known L2, and it is expected that one game will have over a million users. Games based on certain L2 chains will become the forefront of breakthroughs in Web3 games. With the launch of interoperability between game chains and more games, important insights will be provided for the evolution of Web3 games.

11. A certain NFT trading platform, in addition to integrating functions such as NFT exchanges and NFT lending, is expected to enter the NFT perpetual contract market this year, and even expand into the L2, Bitcoin, and Solana ecosystem NFT markets, likely continuing to play an important role as a transformative force in the industry.

12. In addition to the explosion of L2 projects, the Ethereum ecosystem is expected to experience a significant deflation, thereby achieving value capture. Unlike other L1 chains that increase issuance and distribute fees to miners, Ethereum will return newly minted tokens and fees to stakers and holders, which will incentivize more users to stake/re-stake, further locking up the ETH in circulation.

13. The perpetual contract market in DeFi is expected to see significant growth in 2024, with trading volumes of several well-known projects likely to reach more than five times that of 2023. While perpetual contracts may not be the main narrative in a bull market, they are likely one of the best fundamental tracks.

14. The advancement of modular blockchain and cross-chain technology will promote the integration of the Ethereum ecosystem with the Bitcoin ecosystem and the Solana ecosystem, giving rise to many currently unknown projects. According to the current evolutionary trend of the Bitcoin ecosystem, one possible path is for Ethereum to host a second-layer network for Bitcoin; if realized, the degree of integration between the two will gradually increase. In any case, the expansion of Bitcoin needs to follow a native route, and solutions like certain protocols, if they can achieve AVM, will have a significant impact on the development of the Bitcoin ecosystem.

15. Decentralized infrastructure ) DePIN ( will make breakthroughs on Solana and certain L2s, but this track is still in the early construction phase, and more exploratory projects will emerge.

16. Although artificial intelligence is still some way from being practically implemented, it does not affect its becoming one of the important narratives in 2024. AI protocols based on L2 and high-performance public chains will also gradually emerge.

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

18. NFTs, meme coins, and inscriptions will revive at a certain period, simultaneously driving up the trading volume of NFT exchanges and laying the market foundation for the launch of NFT perpetual contracts.

19. Some celebrities will enter the NFT, meme coin, and inscription fields.

20. With the development of L2 and the exploration of high-frequency applications, smart contract wallets are expected to start emerging in 2024.

It is important to note that the above analysis is based solely on current technology and market observations and may not be accurate. Please maintain independent judgment and ensure proper risk control.