The 2024 State of Crypto Report highlights a dynamic ecosystem achieving new milestones. Cryptocurrency activity has reached all-time highs, stablecoins have solidified their role as a pivotal application, and blockchain infrastructure enhancements have drastically reduced transaction costs. The convergence of crypto with emerging fields like artificial intelligence and social networking signals robust growth potential and broader adoption.
Cryptocurrency Activity and Usage Reach All-Time Highs
Active cryptocurrency addresses have never been more numerous. As of late 2023, over 220 million addresses interacted with a blockchain at least once, representing a threefold increase from the beginning of the year. It's important to note that active address metrics can be susceptible to manipulation; however, the overall trend indicates substantial growth.
This surge is largely attributed to networks like Solana, which accounted for approximately 100 million active addresses. Other significant contributors include NEAR (31 million), Base (22 million), Tron (14 million), and Bitcoin (11 million). Among Ethereum Virtual Machine (EVM) compatible chains, Base and BNB Chain also demonstrated considerable activity.
The number of monthly mobile crypto wallet users also hit a record 29 million in June 2024. While the United States still represents the largest share of users (12%), its relative portion of the global total has declined as adoption spreads worldwide. Countries like Nigeria, India, and Argentina are experiencing rapid growth driven by regulatory developments, mobile penetration, and economic factors like currency devaluation.
Estimating the true number of active users is complex, but by combining multiple methodologies, the global monthly active cryptocurrency user base is estimated to be between 30 million and 60 million. This represents a significant opportunity to re-engage passive crypto holders as improved infrastructure enables more compelling applications and user experiences.
Crypto Emerges as a Key Political Topic Ahead of US Elections
Cryptocurrency has firmly entered the national political discourse in the current US election cycle. Its prominence is particularly notable in key swing states. An analysis of Google Trends data reveals that since the last election in 2020, Pennsylvania and Wisconsin rank fourth and fifth, respectively, in terms of proportional crypto search interest. Michigan also shows a notable jump in interest.
A major catalyst for this increased attention has been the approval of Bitcoin and Ethereum Exchange-Traded Products (ETPs). These products have broadened investor access, and their total assets under management have already reached $65 billion. This regulatory milestone, alongside bipartisan support for proposed legislation like the FIT21 Act, indicates growing political acceptance.
Globally, the European Union and the United Kingdom have been particularly proactive in engaging with crypto policy. The EU's Markets in Crypto-Assets (MiCA) framework is the first comprehensive crypto policy legislation and is expected to be fully implemented by the end of the year.
Stablecoins have become a central topic in these policy discussions. With over 99% of stablecoins denominated in US dollars, they are increasingly seen as a tool to bolster the dollar's global standing. Their growth has been so significant that stablecoins now rank among the top 20 holders of US debt.
Stablecoins Achieve Product-Market Fit
Stablecoins have emerged as one of crypto's most undeniable "killer apps," enabling fast, cheap, and global payments. Major infrastructure upgrades have been a key enabler, reducing the cost of transactions involving stablecoins by over 99% in some cases.
The scale of stablecoin adoption is staggering. In Q2 2024, stablecoin transaction volume reached $8.5 trillion across 1.1 billion transactions. This volume is more than double that of Visa during the same period, placing stablecoins in direct competition with established payment giants.
Crucially, stablecoin activity appears decoupled from crypto market volatility. Even when spot trading volumes decline, the number of addresses sending stablecoins continues to grow, suggesting they are being used for utility—like payments and remittances—and not just speculation.
In terms of daily crypto usage, stablecoins account for 32% of active address activity, second only to decentralized finance (DeFi). This underscores their integral role in the current ecosystem. 👉 Explore real-time stablecoin analytics
Infrastructure Upgrades Boost Capacity and Slash Costs
The rise of Ethereum Layer 2 (L2) networks and other high-throughput blockchains has increased the total transaction processing capacity of the ecosystem by more than 50 times compared to four years ago.
Ethereum's "Dencun" upgrade (EIP-4844), implemented in March 2024, was a watershed moment. It introduced "blobs" of data that drastically reduced the cost for L2s to post data back to the main Ethereum chain. As a result, fees on L2 networks plummeted, making them vastly more efficient and user-friendly even as their usage grew.
Zero-Knowledge (ZK) proof technology is another critical area of advancement. This technology is vital for scalability, privacy, and interoperability. The cost of verifying ZK proofs on Ethereum has decreased even as the value secured by these proofs has increased, making the technology both cheaper and more popular.
These infrastructure improvements explain why blockchain infrastructure remains one of the most popular categories for developers. L2 networks, in particular, have become one of the top five hottest builder sub-categories.
Decentralized Finance (DeFi) Remains Popular and Is Growing
The only category that attracts more builder interest than infrastructure is Decentralized Finance (DeFi), which also commands the largest share of daily active addresses at 34%.
Since the "DeFi Summer" of 2020, decentralized exchanges (DEXs) have captured 10% of all spot crypto trading activity—a significant shift from just four years ago when all such activity occurred on centralized platforms. Over $169 billion is currently locked across thousands of DeFi protocols, with major sub-categories including lending, borrowing, and staking.
The transition of Ethereum to a Proof-of-Stake (PoS) consensus mechanism over two years ago dramatically reduced the network's energy consumption. The share of staked ETH has since risen from 11% to 29%, substantially enhancing network security.
DeFi presents a promising alternative to the increasing concentration in the traditional US financial system, where the number of banks has fallen by two-thirds since 1990.
Crypto's Potential to Solve AI's Pressing Challenges
Artificial Intelligence (AI) is a dominant trend across technology, and its intersection with crypto is becoming increasingly significant. There is a notable overlap between users of top AI websites, like ChatGPT, and users of major crypto platforms.
This connection is also evident among builders. Approximately one-third (34%) of crypto projects reported using AI in some capacity, a rise from 27% the previous year. Blockchain infrastructure projects are the most likely to be integrating AI technology.
A primary challenge with AI is the extreme centralization of power and resources. The cost of training frontier AI models has been increasing fourfold annually over the past decade, potentially limiting development to only the largest tech companies.
The decentralized nature of blockchain networks offers a counterpoint to this centralization. Several crypto projects are already tackling AI-related challenges:
- Gensyn: Democratizing access to AI computing resources.
- Story: Helping track intellectual property and compensate creators.
- NEAR: Running AI on an open-source, user-owned protocol.
- Starling Labs: Helping verify the authenticity and provenance of digital media.
The synergy between crypto and AI is expected to strengthen in the coming years.
Scalable Infrastructure Unlocks New On-Chain Applications
As transaction costs have fallen and blockchain capacity has increased, a new wave of consumer applications has become feasible.
The NFT market exemplifies this shift. While secondary market trading was dominant during periods of high fees, a new consumer behavior has emerged: the minting of low-cost NFT collections on social platforms like Zora and Rodeo. This was nearly impossible before fees dropped dramatically.
Social networking is another burgeoning category. While it still represents a small fraction of daily on-chain activity, it attracts significant builder energy, with 10.3% of crypto projects in 2024 being social-related. Projects building on social protocols like Farcaster are among the top five hottest builder sub-categories.
On-chain games are also pushing the limits of blockchain scalability. The rollups powering games like "Pirate Nation" consistently rank among the highest gas consumers across all Ethereum rollups.
Prediction markets are gaining momentum, especially with the upcoming US election. Although crypto-based prediction markets are not legal in the US, non-crypto platforms are making headway, with Kalshi recently winning a court case regarding the listing of election contracts.
The dawn of new consumer behaviors is here. As blockchain technology continues to advance down the classic price-performance curve, these applications are poised to flourish.
Frequently Asked Questions
What is the main takeaway from the 2024 State of Crypto Report?
The core finding is that the crypto ecosystem is maturing rapidly. Activity is at an all-time high, critical infrastructure has dramatically improved, and stablecoins have proven to be a major utility. Furthermore, crypto is intersecting with other powerful trends like AI, signaling a new phase of growth and innovation.
Why have stablecoins become so important?
Stablecoins offer a fast, cheap, and global payment solution, addressing a real-world need for efficient value transfer. Their transaction volume now rivals that of major traditional payment networks, demonstrating significant product-market fit beyond speculative trading.
How have transaction costs been reduced?
Costs have fallen primarily due to scaling solutions, especially Ethereum Layer 2 networks. The pivotal Dencun upgrade in March 2024 introduced a new data storage method for L2s, slashing their operating costs and, consequently, the fees passed on to users.
What is the connection between AI and cryptocurrency?
Both are transformative technologies. Crypto, with its decentralized nature, offers potential solutions to the problem of AI centralization. Projects are exploring ways to democratize AI compute, verify digital content, and create user-owned AI protocols.
What are the most popular categories for crypto developers?
The two largest categories are Blockchain Infrastructure and Decentralized Finance (DeFi). Following them, there is significant builder interest in emerging areas like Social Networking and AI-enabled applications.
Is crypto adoption growing in the United States?
Yes, adoption is growing, as seen in record numbers of active addresses and mobile wallet users. However, the US share of global users is decreasing as adoption accelerates even faster in other parts of the world, particularly in countries with high mobile penetration and volatile local currencies.