(Global) Cryptocurrency and blockchain infrastructure provider Binance has released its first half-yearly report for 2024, offering an in-depth analysis of the cryptocurrency market’s performance in the first six months of the year. Produced by the Binance Research team, this comprehensive report highlights key narratives, technological advancements and investment trends across sectors including DeFi, Web3 gaming, artificial intelligence and institutional adoption.
Key takeaways from Binance’s 2024 Semi-Annual Report:
Market growth
The total market capitalization of cryptocurrencies increased by 37.3% this year and reached approximately $2.27 trillion. This growth was primarily driven by an excellent first quarter following strong performance in 2023.
Bitcoin Performance vs. Traditional Assets
Bitcoin’s dominance has grown significantly thanks to key events such as the fourth Bitcoin halving and the approval of spot ETFs in the US. This approval generated over $14.7 billion in net inflows, giving the cryptocurrency a positive start to this 2024 year. Compared to other traditional funds. financial investments, Ethereum and Bitcoin lead the way with returns of 48% and 43%, respectively, this year, outperforming major stock indexes, many of them with single-digit returns. Gold, the most touted alternative to bitcoin, is up just 13% this year, while crude oil is up about 14%.
The Rise of Decentralized Finance (DeFi)
Decentralized finance (DeFi) saw a 72.8% increase in Total Value Locked (LTV), which is used to measure the total value of assets locked or used on a decentralized finance (DeFi) platform, to $94.1 billion. . The influx of capital into the DeFi ecosystem has benefited most sectors, fueling the emergence of new protocols that make previously inaccessible financial services now available on the blockchain.
Recovery of stablecoins
The market capitalization of stablecoins reached a two-year high of $161 billion, a significant recovery and only 14.5% from the peak reached in April 2022.
Game projects
Despite a drop in the market capitalization of gaming project tokens in the second quarter, the Web3 gaming sector witnessed solid user growth. This trend highlights the sector’s potential for further expansion and innovation, driven by the promise of token launches and greater user engagement.
Crypto-gaming projects gained notable momentum in the first half of 2024, with the total combined market capitalization of tokens in the sector peaking at $32 billion in March. Since then, it has cooled along with the rest of the market, and now has a total market cap of $17.8 billion.
Clearly, Web3 gaming is not yet fully developed, as with a total valuation of $17.8 billion, the total valuation of Web3 gaming is only 0.7% of the total cryptocurrency market capitalization.
Despite their obvious beginnings, venture capital investors have shown more interest in Web3 games compared to Web2 games. According to Konvoy’s Q1 2024 Gaming Industry Report, venture capital funding increased 94% quarter-over-quarter, and funding rounds increased 28%. Technologies, platforms and game development studios that use Web3 technologies have contributed significantly to these numbers.
The growing investor appetite for Web3 projects related to the world of video games may be an early sign, at least in the eyes of venture capitalists, that “Web3 games” are becoming synonymous with “gaming” itself.
The synergy between AI and cryptocurrencies
The convergence of AI and crypto is becoming more apparent, and AI is taking advantage of cryptocurrencies as they allow secure and direct transactions without the need for intermediaries or trusting a single entity. This synergy supports decentralized computing systems, artificial intelligence agents capable of complex tasks, and identity verification solutions. In turn, AI is improving the crypto sector through improved user and developer experiences, smart contract functionality, and automation. In 2024, AI-related tokens outperformed the broader market, with a total market capitalization in circulation of over $26 billion.
Trends for the second half of 2024
The report predicts several key themes for the second half of 2024, including continued institutionalization, changing macroeconomic conditions in the United States, progress in Bitcoin scalability and the rise of decentralized finance (DeFi), the growth of ownership economy applications, tokenization of real assets (RWA), and growth in Web3 games.