Q2 2024 Crypto market sector snapshot

Research reports

This is our Q2 2024 crypto market sector snapshot, a report from our Sygnum investment research. 

The Layer 1 sector has been dominating the headlines, with significant developments around the major tokens: Bitcoin, Ethereum and Solana. However, the Web3 sector has been the best performing decentralised application sector, with strong narratives and user growth supporting AI-linked projects and the DePIN niche, while there are signs of revival in the gaming sector.

As DeFi yields again trump fiat yields and the incidence of hacks continues to decline, established protocols are likely to see continued user and volume growth. A new breed of restaking protocols is growing significantly, with EigenLayer becoming the second largest DeFi protocol in terms to total valued locked, surpassing DeFi stalwarts Aave, Market and Uniswap. Other segments are also poised for growth, such as protocols linked to real-world asset tokenisation and the potential rise of a Bitcoin DeFi ecosystem.

Meanwhile, tokenised investment products, such as the BlackRock-launched tokenised money market fund BUIDL or Ethereum’s tokenised yield arbitrage strategy USDe, have been well received by the market and quickly gathered substantial assets under management.

The Layer 2 sector has been the worst performer year-to-date, despite Ethereum’s successfully scalability upgrade catalysing strong growth in transaction volumes for Layer 2 protocols, on concerns about value capture by the tokens and due to the market’s continued preference for Solana’s integrated approach to scaling.

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This 12-page report is available to qualified investors. Please find further insights and news from our team here.

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The information in this publication pertaining to Sygnum Bank AG (“Sygnum”) is for general information purposes only, as per date of publication, and should not be considered exhaustive. This publication does not consider the financial situation of any natural or legal person, nor does it provide any tax, legal or investment advice. This publication does not constitute any advice or recommendation, an offer or invitation by or on behalf of Sygnum to purchase or sell any assets. No elements of precontractual or contractual relationship are intended. While the information is believed to be from accurate and reliable sources, Sygnum makes no representation or warranties, expressed or implied, as to the accuracy of the information. Sygnum expressly disclaims any and all liability that may be based on such information, omissions, or errors thereof. Any statements contained in this publication attributed to a third party represent Sygnum‘s interpretation of the data, information and/or opinions provided by that third party either publicly or through a subscription service, and such use and interpretation have not been reviewed by the third party. Sygnum reserves the right to amend or replace the information, in part or entirely, at any time, and without any obligation to notify the recipient of such amendment / replacement or to provide the recipient with access to the information. Simultaneously, there is no obligation of Sygnum to inform recipients of information, if before provided information later becomes outdated, inaccurate or obsolete, unless otherwise provided by applicable law. The information provided is not intended for use by or distributed to any individual or legal entity in any jurisdiction or country where such distribution, publication or use would be contrary to the law or regulatory provisions or in which Sygnum does not hold the necessary registration, approval authorization or license. Except as otherwise provided by Sygnum, it is not allowed to modify, copy, distribute or reproduce, display, license, or otherwise use any content for commercial purposes.

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