The cryptocurrency market has matured “dramatically” in 2024 as billions of dollars flow into spot crypto exchange-traded funds (ETFs) and transaction volume spikes on blockchain networks, according to an Oct. 15 report by Coinbase and Glassnode.
“From the runaway success of spot ETFs to the spike in onchain activity to the upswing in trading volumes, it’s clear that markets have grown deeper, more liquid, more sophisticated, and more accessible,” according to the report, which was created by David Duong, Coinbase’s head of institutional research, and Glassnode’s analyst team.
Additionally, the accelerating adoption of stablecoins and a proliferation of Ethereum layer-2 scaling solutions “reflect the maturation of the market and the broadening of the crypto economy,” the report said.
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In 2024, the crypto market became less volatile as investors poured into higher-quality assets, the report said.
Bitcoin’s (BTC) three-month spot price volatility stands at less than 60%, down from a 2021 peak of nearly 130%, the data showed.
Stablecoins and BTC consumed a larger portion of crypto’s total market capitalization during the third quarter of 2024, according to data from Glassnode.
Spot BTC ETFs, which were listed in the United States in January, drew approximately $5 billion into the digital currency during the third quarter of 2024, according to data from Bloomberg and Coinbase.
In the third quarter, stablecoins’ total market capitalization hit an all-time high of roughly $160 billion “as market participants continue to utilize them for a variety of new and existing use cases,” according to Glassnode.
Ether (ETH) ETFs continued to see net outflows as investors cashed out of Grayscale Ethereum Trust (ETHE), which launched under a different fund structure in 2017 before converting to an ETF in 2024.
Spot ETH price performance is lagging behind BTC’s, but “looking beyond price reveals a rapidly growing Ethereum ecosystem, led by the strength of new and innovative layer-2s,” the report said.
In 2024, daily active Ethereum addresses rose sharply and transactions increased five-fold compared to the start of 2023, the report said. The report cited a proliferation of layer-2 scaling networks, such as Coinbase’s Base, as a catalyst.
Concurrently, ETH “has regained a substantial market share of fees among fee-earning L1 blockchains, rebounding from a low of 9% in late August to 40% in late September,” the report said.
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