Stablecoin Market Approaches Pre-TerraUSD Crash Levels: Binance Research

The cryptocurrency market has shown continued upward momentum in the first half of 2024, building on the gains from 2023. The total market capitalization is currently around $2.27 trillion, reflecting a substantial 37.3% growth year-to-date.

Most of these gains were concentrated in the first quarter, which saw an impressive 60.2% increase. However, the second quarter was more challenging, with the market retracing some of these gains and decreasing by 14.3%.

When comparing performance with traditional assets, cryptocurrencies have outperformed significantly; Bitcoin and Ethereum recorded returns of 48% and 43%, respectively, year-to-date. Analysts have noted the notable diversification benefits of Bitcoin, highlighting its strong performance relative to traditional finance portfolios.

Layer-1 blockchain networks began the year on a strong note. Bitcoin solidified its market dominance following its fourth halving event, the introduction of the Runes Protocol, and the approval of spot exchange-traded funds in the U.S., which have attracted over $14 billion thus far. Ethereum experienced growth through restaking and the implementation of the EIP-4844 update.

Additionally, the BNB Chain has been advancing its opBNB and Greenfield projects, while making strides in the memecoin sector and launching new blockchain linking features.

The first half of 2024 also saw a surge in Layer-2 (L2) activity, especially within zero-knowledge (zk) projects. These developments led to significant capital inflows, elevating the total value locked (TVL) in L2s to $43 billion—a remarkable 90% increase over six months.

The decentralized finance (DeFi) sector witnessed substantial capital influxes, resulting in a 72.8% year-to-date growth in TVL, now reaching $94.1 billion, up from $54.4 billion at the year’s start. This growth has positively impacted nearly every DeFi sector, enabling the availability of previously inaccessible financial tools on-chain.

The stablecoin market has shown significant recovery, now standing just 14.5% below its peak in April 2022, prior to the collapse of a major stablecoin. As of June 30, 2024, the stablecoin market cap reached $161 billion, marking a two-year high. Tether’s USDT continues to lead the market, though competitors like Circle’s USDC and Ethena’s stablecoin have gained traction. Analysts remarked on the impressive recovery of the stablecoin market, returning to levels not seen since before the significant collapse.

In contrast, the NFT markets faced challenges in the first half, with declining sales volumes and major projects experiencing floor price drops exceeding 50%. Blur maintained its market dominance, partly due to the success of its token airdrop, while Pudgy Penguins found some success through their line of physical toys. Bitcoin NFTs continued to thrive despite market fluctuations.

Web3 gaming experienced a robust performance in Q1, but the second quarter saw a decline in gaming token market caps along with other altcoins. Nevertheless, user growth in Web3 gaming remained strong, with projects like Pixels and Hamster Kombat attracting substantial player numbers through promising token airdrops. Analysts indicated that user growth remains robust even amidst price volatility.

Looking ahead to the second half of 2024, six key themes stand out as particularly promising, with expectations for significant advancements in areas such as the macroeconomic environment, Bitcoin ecosystem, ownership economy applications, and real-world asset integration. The outlook for these themes remains optimistic as the year progresses.