Data & Insights: The Year in Crypto – ETFs, Memes, and DeFi Renaissance

ETF Round Up

• The spot Bitcoin ETF might be the most significant development in crypto this year. The exchange-traded product enabled a wide swath of retail and institutional investors to gain exposure to Bitcoin, ushering in a renewed interest in the crypto industry.
  • By December 2024, the seven Bitcoin ETFs had a staggering total AUM of $114 billion, dwarfing initial forecasts of $14 billion for the first year.
  • The January 11th launch marked a pivotal moment for crypto market accessibility. In the first month, substantial trading volumes surpassed many expectations. 
• These ETFs smashed some impressive records in the tradfi space, making them one of the most successful ETF launches. 
  • BITO became the fastest ETF to reach $1 billion in assets in just two days, beating SPDR Gold Trust (GLD), which achieved this in three days. 
  • Blackrocks ETF (IBIT) crossed a staggering $30b in AUM in just 293 days since launch. The previous record was 1,272 days. 
• Market dynamics showed two distinct phases of growth for the ETFs in 2024, with initial enthusiasm driving strong inflows in Q1, followed by a period of moderated volume.
  • A second wave of accumulation emerged following the U.S. election results, coinciding with Bitcoin breaking above $100,000.
• The ETF's success has catalyzed broader market developments:
  • The July 23rd launch of spot Ethereum ETFs, which have accumulated $10.6B in AUM so far this year. 
  • As investors become more familiar with crypto and the industry receives increased attention, we're seeing an increasing number of investors look at speculative assets beyond Bitcoin.

Making a Meme out of Everything

• The GMCI Meme index has emerged as 2024's strongest performing sector, delivering 320% returns and significantly outpacing other crypto sectors, including AI (91%) and the top 30 cryptocurrencies (88%) in second and third, respectively. 
  • The index began its upward trajectory in March 2024, maintaining consistent outperformance through year-end.
  • November saw particularly strong performance, with the index reaching peaks of 550% before moderating to close the year.
• The performance reflects broader shifts in market dynamics:
  • A move away from high fully diluted valuation (FDV) venture-backed tokens.
  • The rise of community-driven tokens through platforms like pump.fun.
• The emergence of new coins that captivated audiences and the renewed interest in established meme projects were key drivers of meme coin performance throughout the year.
  • Some of the most notable memecoins of this year include new entrants like Wif, Fartcoin, and Pengu.
  • Established coins, such as Doge and Shib, also got their time in the spotlight. 
• Memecoins demonstrated remarkable resilience throughout 2024, with trading volumes remaining robust across both centralized and decentralized venues. 
  • Different meme trends captured market attention in successive waves, helping maintain consistent retail engagement and trading activity throughout the year.
• The sector's outperformance underscores significant changes in market behavior throughout 2024. 
  • Retail investors have demonstrated increasing influence over market movements, while community-centric token distribution models have proven particularly effective at maintaining engagement and value. 
  • This success suggests an opportunity to shift away from traditional venture-backed projects toward those emphasizing grassroots community building and organic growth.
• While the sector has shown remarkable returns, the GMCI Meme index represents broader market trends rather than specific token performance. It serves as a benchmark for the overall memecoin category.

We Didn’t Predict This

• Polymarket had a stellar year in 2024, achieving exponential growth across multiple metrics, including active traders, volume, and open interest (OI), which reached all-time highs earlier this year.
  • The platform’s cumulative trading volume surpassed $9 billion, with a monthly all-time high of $2.63 billion recorded in November alone. 
  • Active traders reached a new peak of 314.5K in December, while open interest (OI) hit an all-time high of $510 million during the November U.S. election.
• The monthly volume of Polymarket grew at a rate of 66.5% throughout the year.
  • In January, Polymarket recorded just $54 million in trading volume, but by November, this figure had risen to over $2.6 billion, representing a nearly 48x increase within the year.
  • However, December experienced a 34% decline in monthly trading volume compared to November, largely due to the conclusion of Polymarket’s largest-ever event, the U.S. election, which took place in early November.
• Open interest followed a similar trend to volume, peaking at $510 million in November but subsequently declining to $120 million by December, a drop of 76.5% from its record high.
• Despite these declines in volume and OI, the number of monthly active traders on Polymarket continued to grow at an average rate of approximately 74% per month throughout the year.
  • At the beginning of the year, Polymarket had just over 4,000 active traders on the platform.
  • Interestingly, December has seen this metric continue to make a new all-time high of over 314.5K traders, which contrasts volume and OI.
  • This shows that individual participants' appetites for betting have continued to increase despite the lack of a large singular event to bet on.
• While political events have historically dominated Polymarket, post-election saw a noticeable shift in user preferences, with sports-related markets emerging as the most popular sector.
  • The shift from politics to sports is a natural evolution for prediction markets/betting platforms such as Polymarket.
  • This transition toward shorter-term betting markets, such as individual sports games, has likely contributed to the disparity between rising active trader numbers and subdued OI.
  • Sports markets often involve smaller bets that resolve quickly, in contrast to the longer-term capital commitments typically seen in political markets.
  • Additionally, the conclusion of the U.S. election in November resulted in an exodus of participants who were primarily drawn to the platform for this high-stakes event.
  • Many of these users and their capital have not yet returned, leaving behind a core base of active traders who continue to engage with smaller, more frequent betting opportunities.

They Were Right About A DeFi Renaissance

• Various DeFi protocols this year have generated large amounts of revenue, with many established protocols making revenue figures close to their 2021 highs, while newer platforms have established themselves as critical contributors.
  • This has sparked what many have been calling a "DeFi renaissance."
• The Solana ecosystem has been one of the standout success stories
  • Pump.fun is the obvious standout of the year, being the 0-to-1 protocol that arguably captured the most amount of attention out of any other protocol
  • Over the course of 2024, Pump.fun generated an impressive $313 million in fees, averaging $31 million per month, with an extraordinary average monthly growth rate of nearly 77%
  • As a direct beneficiary of Pump.fun’s success and the growth of the Solana ecosystem as a whole, Jito also experienced explosive revenue growth.
  • From just $5 million in fees in January, Jito grew at an average monthly rate of 79%, reaching a total of $603 million in fees by the end of the year.
• Meanwhile, Ethena has seen the most impressive growth trajectory in recent months in terms of the fees it has generated.
  • From just $1.7 million in fees in January 2024, Ethena collected over $267 million by the end of the year.
  • Notably, over 54% of Ethena’s revenue for the year was generated in the last 3 months, as this figure grew at an average rate of 150% per month during this period.
• On the other hand, MakerDAO managed to far surpass its revenue figures from its previous all-time highs in May 2021 of $12.8 million and April 2024 of $32.6 million.
  • As of the time of writing, MakerDAO has generated nearly $40 million in December 2024, up over 38% compared to the previous month.
  • It has also generated over $313 million in fees for the year, a 176% increase compared to 2023.
  • Despite the growth in revenue, the MKR token is actually down 10% year-to-date, as of the time of writing.
• For Aave, 2024 marked a resurgence to near all-time highs, with December revenue reaching $60.9 million, close to its October 2021 peak of $65.39 million.
  • Over the year, Aave generated a total of $389 million in fees, averaging $32.4 million per month, with a steady monthly growth rate of 14%
  • This represents a 244% increase in annual revenue compared to 2023.
  • With this, the Aave token is currently up over 206% year-to-date at the time of writing.

DEX To The Future

• In December 2024, DEX to CEX futures trade volume hit an all-time high of 10.17%.
  • This marks its highest point in recent history.
  • This rise should come as no surprise, given the significant improvements in on-chain user experience (UX) and infrastructure over the past few years.
• The increase in DEX futures trading can be attributed to the growing adoption of platforms like Hyperliquid, Jupiter, ApeX, Satori Finance, and Drift, which have demonstrated consistent growth in recent months.
  • Throughout 2024, the total volume on these DEXs has increased at an average rate of 26.5% per month.
  • By December, the cumulative volume reached $285 billion, driven by exceptional growth among a few standout platforms.
  • Hyperliquid emerged as the leader, contributing 78.8% of the total DEX volume, with a monthly volume of over $225 million in December.
  • Following Hyperliquid, Jupiter captured 9.8% of the market, recording over $28 million in December.
  • Other contributors included ApeX, Satori Finance, and Drift, which accounted for 6.2%, 3.6%, and 1.6% of the volume, respectively.
  • These standout DEXs were selected as they consistently displayed increasing volumes in recent months.
• While the cumulative total of these DEXs has recorded a new monthly high in December, the same cannot be said for CEXs.
  • The total volume for Bitcoin and Ethereum futures on CEXs in December failed to surpass the highs recorded in the previous month.
  • Bitcoin futures volumes on CEXs in December were 17% lower than in November, while Ethereum futures volume on CEXs in December remained roughly equal to its November levels.
  • Despite these declines, the absolute numbers remain significantly higher than those of their DEX counterparts.
  • In December, Bitcoin futures on CEXs generated over $2.14 trillion in volume, while Ethereum futures accounted for $1.28 trillion, illustrating the continued dominance of centralized platforms in sheer scale.
• Regardless, the data underscores a clear and undeniable trend, as decentralized futures platforms are steadily eating into the market share of their centralized counterparts.