As 2024 draws to a close, those in the cryptocurrency world are doing their year-end summaries. For the Bitcoin ecosystem, although there has been development, it is far from meeting the expectations at the beginning of the year. Some people summarize it as a “failure”, some choose to “believe”, and I end it with “regret”.
2024 actually had a good start. People had high expectations for the Bitcoin ecosystem at the beginning of the year, believing that it would completely explode and enter the mainstream limelight. Since the Ordinals protocol was born in December 2022, the Bitcoin ecosystem has gone through a year of growth, transitioning from the “wild age” to the “industrial age”, forming three main tracks: asset issuance protocols, Layer 2 (L2), and Bitcoin staking.
Looking at the Layer 1 asset issuance protocol, influenced by Binance listing BRC20 tokens, the inscription concept became popular, driving up the prices of tokens of other protocols. At the same time, there is great anticipation for the upcoming Runes protocol.
From the perspective of L2 development, there was a spurt of growth at the beginning of 2024. The congestion of the mainnet and the need to increase the playability of assets have made Bitcoin L2 a popular entrepreneurial direction. Domestic and foreign venture capitalists have made large-scale investment layouts, expecting to reproduce the glory of the Ethereum L2 ecosystem.
From the perspective of Bitcoin staking, Babylon completed financing and开启了 the staking and restaking narrative. People believe that the Bitcoin staking and restaking赛道 has broad prospects and can awaken the whales to participate in the ecosystem.
In addition, the construction of general infrastructure for the Bitcoin ecosystem is gradually being perfected. Unisat and OKX Wallet have become the main wallets and trading markets. The approval and listing of Bitcoin spot ETFs marks Bitcoin’s integration into traditional finance and strengthens people’s expectations for the Bitcoin ecosystem.
However, in 2024, the Bitcoin ecosystem did not迎来 surpassing attention and development compared to previous bull markets and entered a long period of silence.
The performance of mainnet assets is deteriorating. In April 2024, Bitcoin迎来 its fourth halving and the Runes protocol was上线. The project side raised transaction fees, but the符文started at its peak and the speculative enthusiasm subsided within two weeks. The new project vitality and liquidity within the ecosystem have been sluggish for a long time. Other asset protocols are similar. The year-to-date high point decline of ORDI reached 70%. The reason may be that the fair asset issuance narrative cannot generate a wealth effect. Chinese and foreign investors do not take over each other’s positions, and the ecosystem has not formed a joint force.
The survival rate of Bitcoin L2 is less than 20%. Casey, the founder of the Ordinals protocol, criticized that all Bitcoin L2s except the Lightning Network are castles in the air. In the past 12 months, there have been more than 100 Bitcoin L2 projects. Now, only 19 remain, with a total value locked (TVL) of about 2.8 billion US dollars. While in the Ethereum ecosystem, just Arbitrum’s TVL reaches 3 billion US dollars. The reasons include that most early Bitcoin L2s lack innovation. The adoption of an EVM-like architecture + cross-chain bridge approach has been questioned. Bitcoin L2s started the TVL battle too early. For example, after Merlin fired the first shot, it quickly collapsed, turning attention from expectation to disappointment and criticism.
The Bitcoin staking narrative has received limited recognition. Babylon and the Bitcoin restaking ecosystem behind it are expected tracks. However, compared to EigenLayer, its TVL is only one-third, and market attention has not increased with the rise of Bitcoin. The market more recognizes Ethereum as native financial assets on the chain and views Bitcoin as “digital gold”. Large holders are reluctant to hand over Bitcoin. Traditional finance prefers Bitcoin spot ETFs and MSTR. Babylon has set the stage, but there are liquidity risks and security issues in restaking protocols, causing concerns for both large and retail investors participating in staking.
In conclusion, although 2024 had a good start for the Bitcoin ecosystem, its performance in all aspects is regrettable. However, there are still firm holders and builders in the Bitcoin ecosystem. The community is continuously building, infrastructure is being perfected, and innovation is on the way. In 2025, will everything be better? Although we haven’t waited for a larger-scale explosion this year, I still believe that the Bitcoin ecosystem will become the protagonist of this cycle and welcome 2025 with full confidence. If it were you, what keyword would you give to the Bitcoin ecosystem this year?
