2023 Crypto Assets Market Review and 2024 Outlook

In 2023, the total market value of the crypto assets market returned to $1.7 trillion, growing over 110% for the year, marking the industry's recovery from the cyclical winter. Several significant events occurred in the industry this year:

1. A well-known trading platform reached a settlement with US regulators, promoting Crypto Assets companies to move towards compliance.

2. The Bitcoin ecosystem leads a new model of fair issuance for inscriptions, which is mainly attributed to the technical feasibility brought by the Taproot upgrade;

3. Ethereum's LSD/LSDFi defines "low-risk returns" within the industry, with ETH staking rewards regarded as "Crypto Assets treasury yield";

4. Layer 2 networks are gradually taking over Ethereum ecosystem applications. Currently, the total locked value of Layer 2 networks has reached $20 billion, approaching the $29 billion of the Ethereum mainnet.

5. A certain public chain has once again become a market hotspot, with its DePIN and MEME projects in the ecosystem attracting a lot of attention;

6. Real-world asset yields have become an important source of profit for DeFi lending protocols. Taking a well-known DeFi protocol as an example, 58.1% of its revenue comes from RWA (mainly U.S. Treasury bonds).

Looking ahead to 2024, industry experts predict the following ten major development trends:

1. After the approval of the Bitcoin spot ETF, it is expected to bring in over $30 billion in incremental funds. This will not only attract investors from the mainstream stock market but will also facilitate the entry of institutions.

2. The total market value of Bitcoin ecosystem inscriptions may reach over $20 billion. In the early stages, top MEME coins that truly achieve fair distribution are more likely to gain long-term consensus.

3. The Bitcoin Layer 2 network will develop rapidly, benefiting infrastructure applications in the Bitcoin ecosystem, such as specialized wallets and cross-chain bridge projects.

4. The total locked value of Ethereum Layer 2 networks is expected to surpass that of the mainnet, potentially reaching over $100 billion. Currently, the locked value on the Ethereum mainnet primarily comes from liquid staking protocols.

5. Although the scale of ZK Rollup may still not compare to that of Optimistic Rollup, the ZK-related modular components of Ethereum's Layer 2 network will tend to improve.

6. A certain cross-chain infrastructure project is expected to issue tokens in the first half of 2024, which may trigger a market boom in the field of full-chain interoperability.

7. Parallel EVM has become a new technological hotspot, expected to drive a new wave of growth for public chains supporting this technology.

8. The market size of Decentralized Physical Infrastructure Networks (DePIN) could grow 10 times, with the current total market value in this field being approximately $62 billion.

9. There may be popular all-chain games or autonomous world projects with strong social attributes. These types of games are usually lightweight but have high playability and social characteristics.

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

The year 2024, as the Year of the Dragon, will enter the twenty-year occurrence of the Nine Purple Li Fire movement starting from the beginning of spring on February 4. This is considered a long-term positive for the Crypto Assets market. With the continuous maturation and innovation of the industry, we have reason to look forward to a new year filled with opportunities and challenges.