Which Tracks Are Institutions Bullish on in 2024? A Review of Research Reports

2024 is a hopeful year for the crypto market, with the approval of BTC spot ETF expected to bring in billions of dollars into cryptocurrencies. All eyes are on the exciting new tracks worth watching. By combing through research reports from multiple institutions, including Messari, a16z, Coinbase, and more than twenty other top-tier institutions, we have identified the tracks that institutions will be watching in 2024.

1) Bitcoin Ecosystem

After the launch of Ordinals, a Bitcoin-based digital content encoding scheme, in December 2022, it sparked a frenzy in the crypto and Bitcoin ecosystems. In 2023, the Bitcoin ecosystem experienced strong growth, with Bitcoin's dominance (the percentage of Bitcoin's market capitalization in the

cryptocurrency

market) rising from around 38% in January to about 50% by December, making it one of the most notable ecosystems to watch in 2024.

Institutional forecasts generally look optimistic for the development of the Bitcoin ecosystem this year:

• Bitwise, a leading U.S. cryptocurrency index fund manager, predicts that Bitcoin trading prices will surpass $80,000 in 2024.

• Coinbase believes that at least in the first half of 2024, institutional investment will continue to focus primarily on Bitcoin, as the approval of ETFs will create strong demand among traditional investors to enter this market.

Other institutions are also bullish on their forecasts, primarily due to:

• The U.S. Securities and Exchange Commission (SEC) has approved a Bitcoin spot ETF, and the next major event, the Bitcoin halving in April, is approaching, with significant changes expected in supply and demand.

• The Bitcoin ecosystem will see upgrades in infrastructure, increased programmable functionalities, including base protocols like Ordinals, and the development of various protocols such as layer 2 and other scalable layers like Stacks and Rootstock.

2) Ethereum Layer 2 Development

In addition to the Bitcoin ecosystem, Ethereum, as the pioneer of smart contracts, is also a key focus of institutional predictions for 2024, especially with the development of Ethereum Layer 2. Vitalik's release of the Ethereum 2024 roadmap and the approaching Cancun upgrade have led to recent surges in tokens of Ethereum Layer 2 projects such as ARB and OP.

Competition in the public blockchain ecosystem has always been fierce. In 2023, ecosystems like Solana and Avalanche developed rapidly, overshadowing Ethereum's momentum. However, Ethereum, as a leader, has begun to exert its strength. Most institutional forecasts are based on the expectation that with the completion of the Cancun upgrade, gas fees will significantly decrease, leading to an explosion in Ethereum Layer 2 ecosystems in 2024. For instance, Bitwise believes that significant upgrades to the Ethereum blockchain will reduce average transaction costs to less than $0.01, laying the groundwork for more mainstream applications.

If the upgrade is successful, leading projects in Ethereum Layer 2 (such as Optimism, Arbitrum, Base, etc.) can fully compete with other Layer 1 public blockchains in terms of performance.

Furthermore, according to Vitalik's vision, zero-knowledge proofs are the future of Ethereum Layer 2 in the long run, and projects like zkSync and StarkWare are also highly regarded.

3) Development of the Solana Ecosystem

In the past year of 2023, the Solana blockchain ecosystem has performed impressively, laying a solid foundation for its long-term development in terms of both technical advancements and community growth. The ecosystem's explosive growth has attracted a significant number of users and funds.

Various institutions predict that in 2024, more projects will choose to migrate to or build on the Solana blockchain, expecting its ecosystem to continue its explosive growth. This is because Solana is perceived as resilient in terms of TPS (transactions per second), gas fees, and community users.

In 2024, market institutions have focused their expectations for Solana on several key areas:

• Technological upgrades such as the development of lightweight clients through Tinydancer, allowing validators to complete verification tasks at lower costs and achieve a higher degree of decentralization.

• Improvements in performance, including increased throughput and efficiency, enhanced user experience, deployment of new token standards, etc., enhancing its robustness.

• The release of new products, increased on-chain liquidity, and expansion of developer tools are driving the prosperity of the Solana DePIN ecosystem.

4）DePIN（Decentralized Public Internet Network）

DePIN, short for Decentralized Physical Infrastructure Network, is a novel approach to building and maintaining infrastructure in the real world. Its goal is to construct decentralized networks in industries such as telecommunications, energy, mobile communications, and storage. In 2023, there were over 650 DePINs with a market value exceeding $20 billion and annual revenue exceeding $1.5 billion.

DePIN covers a wide range of areas, including server networks, wireless networks, sensing networks, and energy networks. Currently, various forecasts suggest significant growth potential for the DePIN sector. For example, according to the crypto research firm Messari, the overall industry size of DePIN is currently approximately $22 trillion and is expected to grow to $35 trillion by 2028. Messari specifically focuses on several subcategories of DePIN, including the cloud storage market, decentralized databases, decentralized wireless networks, and integration with AI.

5) The GameFi Boom: Development of Blockchain Gaming

In 2021 and 2022, the blockchain gaming sector experienced a flourishing period, evolving from “Play to Earn” to “X to Earn,” with projects like Axie and Stepn gaining widespread popularity. However, the blockchain gaming scene in 2023 was relatively subdued. Nevertheless, with the improvement of infrastructure, many institutions remain optimistic about the future of blockchain gaming.

From the perspective of the traditional Web2 market, gaming is a highly promising sector and has become an integral part of many people's lives. Moreover, most traditional gamers have limited awareness of the GameFi (Gaming Finance) field.

Azuki researcher Wale Swoosh believes that gaming will be one of the defining trends of 2024. In terms of cryptocurrency applications, gaming has always been and will continue to be a great Trojan horse. Swoosh firmly believes that the Web3 gaming trend observed at the end of 2023 will not only continue into the next year but will also become more pronounced.

Kelvin Koh, Co-founder and Chief Information Officer of Spartan Capital, believes that there will be a wave of AAA Web3 games launching in 2024, bringing in millions of new Web3 users.

Overall, institutions are bullish on GameFi for two main reasons:

Firstly, in 2024, there is a growing number of blockchain projects focusing on gaming. Besides some traditional prominent blockchains, new ones like Oasys and Sui are also joining the fray.

Secondly, the entry of traditional gaming giants into the sector. For instance, Oasys has attracted many well-known publishers to join its ecosystem, including Ubisoft Entertainment, Square Enix, Activision Blizzard, Epic Games, and others.