The landscape of cryptocurrency has undergone a seismic shift since the release of the first annual State of Crypto Report two years ago. Back then, crypto was largely on the sidelines of policy discussions, spot Bitcoin and Ethereum exchange-traded products (ETPs) had not yet gained U.S. Securities and Exchange Commission (SEC) approval, and Ethereum had not completed its transition to a more energy-efficient proof-of-stake consensus mechanism. Layer-2 (L2) networks—designed to scale transaction capacity and reduce costs—were underutilized, and transaction fees were significantly higher than they are today.
Fast forward to 2024, and the narrative has transformed. The latest State of Crypto Report captures how crypto has emerged as a mainstream policy issue, achieved critical technological milestones, and evolved in user and builder behavior. This year’s report highlights:
- The rise of stablecoins as a foundational crypto use case
- The convergence of crypto with AI, social networks, and gaming
- Fresh data on crypto interest in U.S. swing states ahead of the 2024 election
Crypto activity has reached all-time highs, fueled by infrastructure maturation—especially after major scalability upgrades—that have slashed on-chain transaction costs. The rise of Ethereum L2s and other high-throughput blockchains has made crypto more accessible than ever.
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Key Findings at a Glance
- Crypto activity and adoption are at record levels
- Crypto is now a pivotal topic in U.S. election discourse
- Stablecoins have solidified their role as crypto’s killer app
- Infrastructure upgrades have boosted throughput and cut costs dramatically
- Decentralized finance (DeFi) remains a dominant force
- Crypto can help address core challenges in artificial intelligence (AI)
- Scalable infrastructure unlocks new on-chain application possibilities
1. Crypto Activity and Adoption Hit Record Highs
Monthly active blockchain addresses have surged to an all-time high of 220 million in September—more than triple the figure from late 2023. While active address counts can be manipulated more easily than other metrics, they still offer valuable insight into network engagement.
The growth is largely driven by Solana, which accounts for roughly 100 million active addresses. Other major contributors include NEAR (31 million), Coinbase’s L2 network Base (22 million), Tron (14 million), and Bitcoin (11 million). Among EVM-compatible chains, BNB Chain follows Base with 10 million active addresses, while Ethereum trails with 6 million. (Note: These totals are de-duplicated across EVM chains using public keys.)
This trend is mirrored in builder interest. According to the newly launched a16z Crypto Builder Energy Dashboard, the share of founders building or planning to build on Solana jumped from 5.1% in 2023 to 11.2% in 2024. Base saw a similar rise—from 7.8% to 10.7%—while Bitcoin’s builder interest doubled from 2.6% to 4.2%.
Ethereum remains the top destination for developers at 20.8%, followed by Solana and Base. Other notable ecosystems include Polygon (7.9%), Optimism (6.7%), Arbitrum (6.2%), Avalanche (4.2%), and Bitcoin (4.2%).
Meanwhile, monthly active users of mobile crypto wallets hit 29 million in June 2024—a new peak. While the U.S. leads in per-capita adoption (12% of users), its share of the global wallet base has declined due to increased international adoption and compliance-driven geo-blocking by projects.
Crypto’s global footprint continues to expand. After the U.S., top markets include Nigeria—where regulatory sandbox initiatives have spurred consumer use in bill payments and retail—India, driven by rising smartphone penetration, and Argentina, where citizens increasingly turn to stablecoins amid currency devaluation.
Despite these metrics, estimating true active users remains complex. Combining multiple methodologies, we estimate between 30 million and 60 million monthly active crypto users globally—just 5% to 10% of the 617 million people who reportedly own crypto as of mid-2024.
This gap reveals a massive opportunity: re-engaging passive holders. With improved infrastructure enabling richer user experiences, more dormant users may soon become active participants in on-chain ecosystems.
2. Crypto Emerges as a Key U.S. Election Issue
For the first time, crypto has entered the national political spotlight in the 2024 U.S. election cycle. Interest in crypto is particularly strong in swing states that could decide the outcome.
Pennsylvania and Wisconsin—expected battlegrounds in November—ranked fourth and fifth in crypto search interest since 2020. Michigan placed eighth, while Georgia held steady. Arizona and Nevada saw declines.
One catalyst for rising interest is the approval of Bitcoin and Ethereum ETPs. Though often called ETFs, these products are technically registered as ETPs under SEC Form S-1, indicating they do not hold securities. Still, their launch has broadened investor access, with over $65 billion in assets now held on-chain via these products.
The SEC’s greenlight marks a pivotal moment for U.S. crypto policy. With bipartisan support growing—evidenced by the House passing the FIT21 Act with backing from 208 Republicans and 71 Democrats—legislative clarity may soon follow.
At the state level, Wyoming’s passage of the Decentralized Unincorporated Nonprofit Association (DUNA) law grants legal recognition to DAOs, enabling decentralized networks to operate without sacrificing their core principles.
Internationally, the EU’s Markets in Crypto-Assets (MiCA) regulation sets a precedent as the first comprehensive framework, set for full implementation by year-end.
Stablecoins are central to this policy conversation. With over 99% pegged to the U.S. dollar, they offer a tool to reinforce dollar dominance globally—even as the euro lags at just 0.2%. Remarkably, stablecoins now rank among the top 20 holders of U.S. debt, surpassing nations like Germany.
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3. Stablecoins: The Killer App of Crypto
Stablecoins have cemented their status as crypto’s most impactful use case—enabling fast, low-cost global payments at scale.
As Congressman Ritchie Torres noted: “The widespread use of dollar stablecoins—powered by smartphones and blockchain encryption—could become the largest financial empowerment experiment in human history.”
Technological advances have slashed transaction costs. Sending USDC on Ethereum now averages $1 in gas fees—down from $12 in 2021. On Base, it costs less than a cent.
Compare that to the $44 average cost of an international wire transfer.
By Q2 2024, stablecoin transaction volume hit $8.5 trillion across 1.1 billion transactions—more than double Visa’s $3.9 trillion over the same period.
Unlike speculative trading activity, stablecoin usage shows no correlation with market cycles. Even as spot trading declines, the number of addresses sending stablecoins continues to grow—indicating broader utility beyond speculation.
Stablecoins now account for 32% of daily crypto activity by active addresses, second only to DeFi at 34%.
4. Infrastructure Upgrades Drive Efficiency
The rise of stablecoins is inseparable from infrastructure progress.
Blockchain throughput has increased over 50x since 2020, thanks to L2s and high-performance chains.
Ethereum’s Dencun upgrade (EIP-4844), rolled out in March 2024, slashed L2 fees dramatically—even as transaction value surged.
Similarly, zero-knowledge (ZK) proofs are becoming more efficient. While spending on ZK verification has decreased, the value secured via ZK rollups continues to rise—proving greater cost-effectiveness and adoption.
Though ZK virtual machines (zkVMs) still lag behind traditional computing performance, they represent a promising frontier for verifiable, low-cost computation.
5. DeFi Remains Strong and Growing
DeFi leads in daily usage with 34% of active addresses involved in lending, borrowing, or trading.
Over $169 billion is locked across thousands of protocols.
Since Ethereum’s shift to proof-of-stake, staked ETH has risen from 11% to 29%, enhancing network security.
As traditional banking consolidates—with two-thirds fewer banks since 1990—DeFi offers a decentralized alternative.
6. Crypto Can Solve Critical AI Challenges
AI and crypto are increasingly intertwined.
One-third of crypto builders now integrate AI into their projects—a rise from 27% in 2023.
AI model training costs grow fourfold annually, risking centralization among tech giants.
Crypto projects like Gensyn (decentralized AI compute), Story (IP tracking), Near (open-source AI), and Starling Labs (media provenance) aim to counter this trend.
7. Scalability Unlocks New Consumer Apps
Lower fees enable novel use cases:
- NFTs: From high-value collectibles to social minting on platforms like Zora
- Social: Farcaster-based apps rank among top builder categories
- Gaming: Titles like Pirate Nation push rollup gas limits
- Prediction Markets: Growing interest despite U.S. legal hurdles
Frequently Asked Questions
Q: Why are stablecoins considered crypto’s killer app?
A: Stablecoins enable fast, low-cost cross-border payments with real-world utility—unlike volatile cryptocurrencies used mainly for speculation.
Q: How do L2 networks reduce transaction costs?
A: L2s process transactions off the main chain and batch them on Ethereum, drastically cutting gas fees while maintaining security.
Q: What is the significance of ZK proofs in blockchain?
A: ZK proofs allow one party to prove a statement is true without revealing underlying data—enabling privacy, scalability, and trustless verification.
Q: Why is DeFi growing despite market downturns?
A: DeFi offers tangible financial services—lending, borrowing, yield generation—that remain valuable regardless of price cycles.
Q: Can crypto really decentralize AI?
A: Yes—by distributing compute resources, protecting creator rights, and ensuring data authenticity through blockchain verification.
Q: Are prediction markets legal in the U.S.?
A: Non-crypto prediction markets like Kalshi are regulated by the CFTC; crypto-based ones remain in a legal gray area.
The momentum behind crypto is undeniable—driven by policy progress, infrastructure gains, and expanding use cases. As scalability improves and adoption grows, the next wave of innovation is just beginning.
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