Following a notable 109% surge in 2023, crypto markets experienced a continued rise in the first half of 2024, with total market capitalization up by 37.3%. This growth was largely driven by a 60.2% gain in the first quarter of the year, while the second quarter reversed some of these gains as market capitalization declined by 14.3%.
The successful launch of spot BTC exchange-traded funds (“ETFs”) in the U.S. in January marked a pivotal moment for the industry and ushered in a period of bullish sentiment and positive flows. While the initial price reaction was muted, the following months saw strong gains as the market digested the impact of the ETFs on attracting new capital, increasing accessibility to a greater pool of investors, and reinforcing the growing acceptance of crypto as a mainstream investment.
Notably, the first half of the year saw several narratives gain momentum—points meta,restaking hype, memecoins frenzy, and airdrop seasons, among several others. While some of these narratives may have died down, they have undoubtedly been strong contributors to on-chain activity and transactions in the first half of the year.
Looking ahead, we are keeping a close eye on the Fed’s interest rate policies, the approval and traction of the spot ETH ETFs, and the emergence or resurgence of crypto-specific narratives by monitoring on-chain metrics. We are cognizant of the structural overhang of a large amount of upcoming unlocks in the coming months and years, and we urge investors to do their own research. On the bright side, valuations for many tokens have retraced somewhat in the past few months to more reasonable levels.