2023 Crypto Assets Industry Review and 2024 Outlook

In 2023, the total market capitalization of the Crypto Assets market returned to $1.7 trillion, with an annual growth of over 110%, marking that the industry has passed the winter period. Several important events stood out this year:

1. A major trading platform has reached a settlement with US regulators, pushing compliance for Crypto Assets companies to become a mainstream trend.

2. The Bitcoin ecosystem has led a new model of fair issuance of inscriptions, which is mainly due to the technical feasibility brought by the Taproot upgrade.

3. Ethereum's LSD/LSDFi defines the concept of "low-risk returns" in the industry, with ETH staking returns seen as similar to "Crypto Assets government bond yields".

4. The second layer network is gradually taking on Ethereum ecological applications, and the total locked value of the second layer has reached 2 billion USD, approaching Ethereum's 2.9 billion USD.

5. Solana once again becomes a hotspot, with DePIN and MEME projects in its ecosystem regaining market attention.

6. Real-world asset (RWA) yields have become an important source of profit for decentralized finance (DeFi) lending protocols, with a leading DeFi protocol generating 58.1% of its income from RWA (mainly government bonds).

Looking ahead to 2024, the following ten trends are worth paying attention to:

1. After the approval of the Bitcoin spot ETF, it is expected to bring in more than $30 billion in incremental funds.

2. The total market value of inscriptions in the Bitcoin ecosystem may exceed 20 billion USD, and leading MEME projects that are truly fairly issued may gain long-term consensus.

3. Bitcoin's second-layer solutions will rapidly develop, benefiting the infrastructure projects of the Bitcoin ecosystem.

4. The total locked value of Ethereum's second-layer network is expected to exceed that of the Ethereum mainnet, potentially reaching over $100 billion.

5. Although the total locked value of zero-knowledge (ZK) Rollup may still not compete with optimistic Rollup, the ZK-related modular components of the Ethereum Layer 2 network will tend to improve.

6. A certain cross-chain project is expected to issue coins in the first half of the year, which may trigger a market boom in the field of full-chain interoperability.

7. The new narrative of parallel EVM will drive the secondary growth of certain public chains.

8. The market size of Decentralized Physical Infrastructure Networks (DePIN) could grow 10 times.

9. There may emerge popular autonomous worlds or fully on-chain games with strong social attributes.

10. The integration of AI and Crypto Assets in multiple application scenarios will produce star cases, such as using Bitcoin as a payment currency for AI, and utilizing Zero-Knowledge Machine Learning (ZKML) for training sensitive data and model evaluation.

These trends indicate that the Crypto Assets industry will see significant developments in technological innovation, expansion of application scenarios, and market scale. As the industry matures gradually, compliance and the improvement of infrastructure will lay the foundation for wider adoption.