The crypto landscape has transformed significantly over the past two years. From being a niche topic, cryptocurrency has become a major focus for policymakers, investors, and developers worldwide. The approval of Bitcoin and Ethereum exchange-traded products (ETPs), Ethereum’s shift to proof-of-stake, and the explosive growth of Layer 2 (L2) solutions have all contributed to a more mature, scalable, and user-friendly ecosystem. This report highlights the most important developments and emerging trends based on a16z’s latest research and data.
Executive Summary
The 2024 a16z Crypto State of the Industry Report reveals unprecedented levels of activity and innovation in the crypto space. Key areas of growth include:
- Record-high on-chain engagement
- The rise of crypto as a political topic in the U.S.
- Stablecoin adoption reaching product-market fit
- Major infrastructure improvements reducing costs
- Continued expansion of DeFi
- Convergence of crypto and artificial intelligence (AI)
- New consumer applications enabled by scalable networks
These trends underline the industry’s progress toward broader adoption and utility.
1. Crypto Activity and Usage Hit All-Time Highs
Monthly active crypto addresses have surged to new records. As of September, 220 million addresses interacted with a blockchain—more than triple the number from late 2023. Solana leads with around 100 million active addresses, followed by NEAR (31M), Base (22M), Tron (14M), and Bitcoin (11M).
Ethereum remains a top choice for developers, with 20.8% expressing interest in building on it. Solana and Base follow closely, highlighting a competitive and diversified developer ecosystem.
Mobile wallet usage has also grown significantly. In June 2024, monthly mobile crypto wallet users reached 29 million. While the U.S. accounts for 12% of these users, countries like Nigeria, India, and Argentina are rapidly adopting crypto, especially for payments and as a hedge against inflation.
Globally, we estimate between 30 million and 60 million active crypto users monthly. This represents a significant opportunity to re-engage passive holders as better infrastructure and apps emerge.
2. Crypto as a Key U.S. Election Issue
Cryptocurrency has become a central topic in the 2024 U.S. election cycle. Swing states like Pennsylvania and Wisconsin have seen some of the largest increases in crypto-related search interest since 2020.
The approval of Bitcoin and Ethereum ETPs has broadened investor access and contributed to growing mainstream awareness. These products collectively hold $65 billion in on-chain assets.
Policy developments are also accelerating. The FIT21 Act passed the House with bipartisan support, and Wyoming’s DUNA Act provides legal recognition for decentralized autonomous organizations (DAOs). In the E.U., the Markets in Crypto-Assets (MiCA) regulation is set to take full effect by year-end.
Stablecoins, in particular, have become a policy focal point. Over 99% of stablecoins are dollar-denominated, reinforcing the dollar’s global role while opening new discussions about financial innovation.
3. Stablecoins Achieve Product-Market Fit
Stablecoins have emerged as one of crypto’s first “killer apps.” They enable fast, low-cost, cross-border payments and are increasingly used beyond trading.
In Q2 2024, stablecoins facilitated 1.1 billion transactions totaling $8.5 trillion—more than twice Visa’s volume during the same period. Their usage continues to grow independent of market volatility, indicating real-world utility.
The average cost to send USDC on Ethereum has fallen from $12 in 2021 to just $1 today. On Base, it costs less than a cent. These low fees make stablecoins competitive with traditional payment networks.
Stablecoins now account for 32% of daily crypto activity by addresses, second only to DeFi. This reflects their critical role in the ecosystem.
4. Infrastructure Upgrades Reduce Costs and Boost Capacity
Blockchain scalability has improved dramatically. Networks now process 50x more transactions per second than four years ago, thanks largely to L2 solutions and high-throughput chains like Solana.
Ethereum’s Dencun upgrade (EIP-4844) was a milestone. It reduced L2 transaction fees by over 99% in some cases, making the network more efficient as adoption grows.
Zero-knowledge (ZK) proof technology is also advancing. Despite increased usage, the cost of verifying ZK proofs has decreased, paving the way for more scalable and private applications.
These improvements make blockchain infrastructure one of the most popular categories among developers. L2 networks are now among the top five subcategories by builder interest.
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5. DeFi Remains Popular and Continues to Grow
Decentralized finance (DeFi) is the largest category of crypto usage, representing 34% of daily active addresses. Since the “DeFi Summer” of 2020, decentralized exchanges (DEXs) have captured 10% of all spot crypto trading activity.
The total value locked (TVL) in DeFi protocols exceeds $169 billion, with staking and lending among the top subcategories.
Ethereum’s transition to proof-of-stake has significantly reduced its energy consumption. The amount of staked ETH has increased from 11% to 29% in two years, enhancing network security.
DeFi offers a promising alternative to the trend of financial centralization, especially as the number of U.S. banks has declined by two-thirds since 1990.
6. Crypto Solutions for AI’s Biggest Challenges
Artificial intelligence is another major trend intersecting with crypto. There is significant overlap between users of AI platforms like ChatGPT and visitors to top crypto websites.
About 34% of crypto projects are now incorporating AI—up from 27% a year ago. Blockchain infrastructure projects are the most likely to use AI tools.
AI development is becoming increasingly centralized due to the high cost of training models. Crypto can help democratize access through decentralized compute networks, IP tracking, and verification systems.
Projects like Gensyn, Story, Near, and Starling Labs are already working on solutions that combine crypto and AI. This convergence is likely to strengthen in the coming years.
7 Scalable Infrastructure Unlocks New On-Chain Applications
Lower transaction costs and higher throughput are enabling new consumer behaviors. For example, NFT activity has shifted from high-value secondary sales to low-cost minting on social platforms like Zora and Rodeo.
Social networking apps, though still a small part of daily on-chain activity, attract significant developer interest. Over 10% of crypto projects in 2024 are social-related.
On-chain gaming is also pushing scalability limits. Some games, like Pirate Nation, require more gas than any other Ethereum rollup.
Prediction markets are gaining traction ahead of the U.S. election, despite regulatory challenges. These platforms demonstrate how crypto can enable new forms of engagement and speculation.
As blockchain technology continues to improve, we expect more innovative applications to emerge.
Frequently Asked Questions
What is the main focus of the a16z 2024 crypto report?
The report provides an overview of key trends in the crypto industry, including adoption rates, regulatory developments, infrastructure improvements, and emerging use cases like stablecoins and AI integration.
How has crypto adoption changed since 2023?
Monthly active addresses have more than tripled, with significant growth in regions like Africa and South Asia. Mobile wallet users have also reached new highs, reflecting broader global access.
Why are stablecoins considered a killer app?
Stablecoins enable fast, cheap, and borderless payments. Their transaction volumes now exceed those of major traditional payment networks, demonstrating real utility and adoption.
What role does policy play in crypto’s future?
Regulatory clarity is critical for growth. Recent legislative efforts in the U.S. and E.U. aim to provide frameworks that support innovation while protecting users.
How is AI being used in crypto?
AI is being integrated into blockchain infrastructure for tasks like data verification, computation, and content authentication. This synergy is expected to enhance both fields.
What are the most promising crypto categories for developers?
DeFi, infrastructure, and social applications are currently the most popular. Scalability improvements are also enabling new consumer-focused apps in gaming and NFTs.
Conclusion
The crypto industry has made undeniable progress over the past year. From policy wins and technical upgrades to new applications and growing adoption, the ecosystem is more robust than ever. While market cycles will continue, the underlying trends suggest a promising future for blockchain technology and its role in the global economy.
For those interested in diving deeper into the data or exploring development opportunities, many resources and platforms are available. 👉 Learn more about advanced blockchain tools