Crypto Market Experiences Dramatic Maturation in 2024

The cryptocurrency market has undergone significant maturation in 2024, with billions of dollars flowing into spot crypto exchange-traded funds (ETFs) and a notable increase in transaction volumes across blockchain networks, according to a report released on October 15 by Coinbase and Glassnode.

The report, authored by David Duong, Coinbase’s head of institutional research, along with the analyst team from Glassnode, states, “From the remarkable success of spot ETFs to the surge in on-chain activity and increased trading volumes, it’s evident that the markets have become deeper, more liquid, sophisticated, and accessible.”

The rapid adoption of stablecoins and the expansion of Ethereum layer-2 scaling solutions also reflect the market’s maturation and the broadening scope of the crypto economy, the report highlights.

In 2024, the crypto market has shown reduced volatility as investors gravitate towards higher-quality assets. Bitcoin’s three-month spot price volatility has dropped to below 60%, down from nearly 130% at its peak in 2021.

According to data from Glassnode, stablecoins and Bitcoin have come to represent a larger share of the total cryptocurrency market capitalization during the third quarter of 2024. Spot BTC ETFs, which were launched in the United States in January, attracted approximately $5 billion into Bitcoin during the third quarter, based on information from Bloomberg and Coinbase.

The report notes that stablecoins reached an all-time high total market capitalization of around $160 billion in the third quarter, as market participants increasingly utilize them for various new and existing applications.

Meanwhile, Ether ETFs experienced outflows as investors moved funds out of the Grayscale Ethereum Trust (ETHE), which transitioned from its original fund structure to an ETF in 2024. Although the performance of spot ETH prices has lagged behind that of BTC, the report emphasizes that the Ethereum ecosystem is rapidly expanding, driven by innovative layer-2 solutions.

In 2024, the number of daily active Ethereum addresses has surged sharply, and transaction volumes have increased five-fold compared to the beginning of 2023, according to the report. The proliferation of layer-2 scaling networks, such as Coinbase’s Base, has been cited as a key catalyst for this growth.

Additionally, ETH has regained a significant share of transaction fees among fee-earning layer-1 blockchains, bouncing back from a low of 9% in late August to 40% by the end of September, the report concludes.