Cryptocurrency is a digital or virtual asset that runs without the involvement of a central authority, such as a bank or government, and uses cryptography for security. Cryptocurrency transactions are recorded and verified using decentralized technology, usually blockchain. Cryptocurrencies are not represented as real coins or banknotes; they exist only in digital form. The digital tokens stored in digital wallets serve as an expression of their value.
The second wave of deficit occurred at the end of 2020, when the chips of the most popular company, NVIDIA, increased in value by about two times in a month.
Modern life is concentrated in databases. For example, the presence of money in the bank account of each particular user is confirmed by a corresponding entry in the bank's database.If people did not trust the bank, they would not keep their funds there. Consequently, those who manage the databases are trusted. However, what if you could create a database whose management would be owned by all its users?
It is what a user (or group of users) named Satoshi Nakamoto published an article called "Bitcoin: A Peer-to-Peer Electronic Cash System" in 2008, giving rise to the first cryptocurrency, now known as Bitcoin.
Leading countries in bitcoin mining, November 2024
Bitcoin price, logarithmic scale, US$, 2010-2024
Ethereum is a decentralized blockchain platform that creates a peer-to-peer network for the secure execution and verification of smart contracts. Ethereum has its cryptocurrency, ether (ETH).
Traditional contract and smart contract
Smart contracts are computer programs stored on the blockchain that follow “if-then” logic and are guaranteed to execute according to the rules defined by their code, which cannot be changed once created.
Vitalik's idea attracted public interest, which is why the Swiss non-profit organization Ethereum Foundation was founded. Ethereum Foundation became the developer of the Ethereum network.
In 2014, ether was first offered to those who wanted it. For 1 bitcoin, you could get 2,000 ethers.
Ether price, logarithmic scale, US$, 2016-2024
The most popular fiat-backed token is USDT. It was first released by Tether in 2014 on the Bitcoin blockchain.in 2019, the Tether company stated that only 74% of its assets are backed by fiat currency.
USD Coin (USDC) is a digital stablecoin, that was launched in September 2018 by the Centre consortium. USDC is backed by fiat currency and is similar in function and use to USDT.
The algorithmic stablecoin DAI was released in 2017. The token's value is tied to the value of one dollar, but the collateral occurs through mathematical algorithms, not with currency or bonds.
First Digital (FDUSD) is a stablecoin issued by FD121 Limited, a subsidiary of First Digital Limited, which holds all FDUSD reserves in segregated accounts.
Total market capitalization of cryptocurrencies and bitcoin, 2013-2024, $B
Bitcoin market dominance, 2016-2024
As of November 30, 2024, the total market capitalization of stablecoins was $191.70 billion. The undisputed leader among stablecoins is USDT, which occupies about 70% of the total market capitalization of stablecoins or $135.12 billion in value terms. Next comes USDC, which occupies about 21% of the total capitalization or $40.15 billion.
The market capitalization of the stablecoin market, 2021-2024, $B
Volume of USDT transactions per 24 hours on EVM blockchains, %
The Ethereum blockchain is in second place with a large gap (28.2%).
NFT market capitalization and trading volume, 2023-2024
The total NFT market capitalization reached $43.39 billion by the end of November 2024, up from $18.08 billion in January 2024. However, after increased demand for NFTs in the first half of November, trading volume declined towards the end of the month, which may be due to increased investor interest in major cryptocurrencies.
Number of games by chain, November 2024
As of November 30, 2024, the GameFi market cap reached a six-month high of $35.71 billion. The peak of 2024 was in the spring, when the capitalization rose to $49.97 billion in March. However, all these values are below the ATH of $164.22 billion in October 2022.
In terms of audience acquisition, the situation is different. Since the beginning of 2024, the number of daily active users (DAU) of all GameFi projects has been steadily increasing from 1.6 million in January to an all-time high of 6.6 million users by the end of November 2024.
The decentralized finance (DeFi) segment is a market for financial services built on distributed networks without the participation of centralized institutions as intermediaries. By the end of November 2024, on the wave of the overall market growth, the coins that provide 57% of the capitalization (Lido, Chainlink, and Uniswap) also grew, raising the total DeFi market capitalization to $110.1 billion from $73 billion in October.
Categories of protocols and their total TVL, $B
Lido is the leader in TVL not only in its category, but also among all other DeFi projects.
The global Web 3.0 market size was valued at $2.18B in 2023 and is projected to reach $65.78B by 2032, with a CAGR of 46% during the forecasted period, according to Precedence Research.
The cryptocurrency and blockchain technology market consists of multiple segments and groups of players,
each playing a different role in the ecosystem.
Cryptocurrency exchanges
Centralized exchanges are Binance, Coinbase, and Kraken.
They provide high transaction speeds and ease of use but require trust to the exchange operator.
Examples include Uniswap, SushiSwap.
DEXs provide greater anonymity and security because they do not require funds to be transferred to a third party's control.
Cryptocurrency custody services
Cryptocurrency is stored by a third party, such as an exchange. Custodial cryptocurrency wallet holders do not store and manage private and public keys, as well as the addresses of their wallets. All this information is stored by a third-party company on whose platform an account is created for the holder. The advantage for the holder in this case is the convenience of access – it is enough to enter only one key to log in to the wallet.
Custodial wallets examples:
Wallets whose holders have full access to their funds and are personally responsible for their safety. The holder manages the cryptocurrencies and processes the transactions themselves. Because of this, non-custodial wallets tend to be more difficult to use. Non-custodial cryptocurrencies can be software-based or hardware-based and differ in terms of access and management procedures.
Depositories / Custodians
These are institutions or services that provide custody and management of digital assets for institutional and private investors.
They ensure the security of assets, including cryptocurrencies, and often offer additional services such as asset insurance.
Examples of depositories and custodians:
Auditors
Auditors are specialized companies that perform technical audits of smart contracts and blockchain platforms to ensure their security and reliability. They help prevent bugs in the code and protect user assets. Some examples of such companies include:
Cryptocurrency trading access providers for the general market
Bitcoin Trusts and ETFs are financial instruments that allow investors to invest in Bitcoin without directly purchasing the cryptocurrency.
The ProShares Bitcoin Strategy ETF (BITO) is the first US futures Bitcoin ETF launched in 2021. Since then, there have been other funds: Valkyrie Bitcoin Strategy ETF, Invesco Bitcoin Strategy ETF, VanEck Bitcoin Strategy ETF, and Galaxy Bitcoin Strategy ETF.
In 2024, the SEC approved 11 spot Bitcoin ETFs. The approval follows a lawsuit by Grayscale, which challenged the SEC's decision to reject a spot Bitcoin ETF application. Among the approved companies are Bitwise (BITB), Grayscale (GBTC), Hashdex (DEFI), Valkyrie (BTF), BlackRock (IBIT), Invesco (BTCO), Ark (ARKB), VanEck (HODL), WisdomTree (BTCW), Fidelity (FBTC), and Franklin (EZBC).
The growing integration of blockchain technology and cryptoassets into traditional financial systems has the potential to change the financial landscape, intertwining traditional finance and cryptocurrencies.
Traditional financial institutions such as Fidelity, BNY Mellon, and State Street have begun offering cryptocurrency custody services in response to strong demand from institutional investors for secure and regulated crypto services. Platforms such as J.P. Morgan's Onyx and Citi Token Services are using blockchain to improve asset utilization and provide instant transaction settlement.
In addition, strategic collaboration between traditional financial institutions and fintech startups can drive innovation and facilitate the integration of blockchain and cryptoassets into traditional finance.
In the first 11 months of 2024, the Cryptocurrency & Blockchain vertical saw 1,599 venture deals, the same level as the previous year. The compound annual growth rate (CAGR) from 2015 to 2024 ( incomplete year) has reached 39.88%.
Cryptocurrency & Blockchain – VC deals number, 2015 – 2024 (11 months)
Venture capital investment in Cryptocurrency & Blockchain market increased from $0.31B in 2015 to $8.70B in the first 11 months of 2024, at a compound annual growth rate (CAGR) of 44.85%. The amount of capital raised for the incomplete year of 2024 was higher than in the full previous year.
Cryptocurrency & Blockchain – VC deals total volume, $B, 2015 – 2024 (11 months)
According to PitchBook, the Cryptocurrency & Blockchain market is categorized into 5 major segments:
In the first 11 months of 2024, the number of exits in the Cryptocurrency & Blockchain vertical remained consistent with the previous year with 85 exits. 84 of them were made through M&A and 1 deal was an IPO of 21Shares.
Private companies venture backed at the time of the exits
Since January 2023, the largest (according to post-money estimates) Crypto/Blockchain vertical companies that have attracted financing through late-stage transactions (Series C+) have become Blockchain.com , WorldCoin, BitGo and Matrixport.
Blockchain.com is a developer of a digital asset platform for buying, storing and using cryptocurrency.
WorldCoin is a developer of a digital currency platform designed to provide privacy and overall blockchain transparency.
BitGo provides secure and scalable solutions for the digital asset economy, offering custodial services, borrowing and lending, and underlying infrastructure.
Matrixport is a developer of a blockchain-based cryptocurrency trading platform.
The table provides a summary of digital asset legislative, regulatory, and licensing status as of November 2024. It factors in the implications of the EU's Markets in Crypto-Assets Regulation (MiCA), which came into effect in June 2023.
– Legislation/regulation in place. Signifies that comprehensive crypto legislations/regulations have been established.
– Active legislative/regulatory engagement. Indicates that there is ongoing activity, such as regulatory discussions, consultations, or pending implementation of crypto-related laws and regulatory frameworks.
– Legislative/regulatory process not initiated. Implies that the jurisdiction has not yet started formulating or considering specific crypto asset legislations or regulatory frameworks.
2023 was a productive year for the SEC, with lawsuits filed against Coinbase, Kraken, and Binance / Binance US The SEC filed 784 lawsuits, obtained financial compensation orders totaling nearly $5B, and paid almost $1B to affected investors. In addition to proceedings, the SEC seeks to shape the regulatory treatment of the cryptocurrency market. In 2023, the Commission proposed to expand and strengthen the role of qualified custodians as registered investment advisers custody assets on behalf of their investors.
In addition, actions taken by the US Internal Revenue Service (IRS) are noteworthy. The IRS has issued a rule requiring cryptocurrency brokers, including trading platforms, payment processors and specific digital asset wallets, to report data on cryptocurrency transactions valued at more than $10,000 in 2024.
Within the US federal entities, California joins New York and Louisiana as the third state to establish a regulatory framework for licensing virtual currencies. The state passed the "Digital Financial Assets Act" (DFAL), which requires cryptocurrency service providers to obtain a license from the Department of Financial Protection and Innovation (DPFI). This law will take effect in July 2025.
Other jurisdictions are taking similar measures. For example, the Monetary Authority of Singapore (MAS) finalized a regulatory framework for issuers of stablecoins in August 2023.
Another key bill this year is the "21st Century Financial Innovation and Technology Act" which could move cryptocurrencies from a securities category to a commodity category with the CFTC taking the lead. Similarly, the bipartisan "Responsible Financial Innovation Act" (RFIA) seeks to classify most cryptocurrencies as commodities, shifting more responsibility to the CFTC and establishing regulation of stablecoins.
Timeline for MiCA Implementation
The main focus in the European Union remains the development of the previously mentioned Markets in Crypto Assets Regulation (MiCA), which is the first cross-jurisdictional regulatory framework for crypto assets.
The draft was initially introduced in 2020 in response to the Global Stablecoin Initiative.
1inch Network
Fundraising history
The company is funded by 57 investors. Among them are Mirana Ventures, Platinum Capital, Wintermute Ventures, Gemini Frontier Fund, Jane Street, Celsius Network,etc.
Blockchain.com
Fundraising history
ConsenSys
Fundraising history
LayerZero
Fundraising history
StarkWare
Fundraising history
Fireblocks
Fundraising history
Chainalysis
Fundraising history
Uniswap
Fundraising history
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