a16z 2024 State of Crypto Report | Eddy Lazzarin & Daren Matsuoka
In this episode of Bankless, we sit down with Eddy Lazzarin and Daren Matsoukaon to explore the current landscape of crypto and its future. From all-time high active addresses to the rise of mobile wallet use in developing countries, we discuss the signals for adoption and the massive opportunity for startups. We also dive into the political impact of crypto in 2024, stablecoins’ role in reshaping the U.S. Dollar, the Ethereum fee economy, and whether Crypto x AI is the next wave of innovation. Don't miss this forward-looking conversation on the state of the crypto industry and what to expect in 2024.
The State of Crypto in 2024: Adoption, Challenges, and Opportunities
As we venture further into 2024, the world of crypto has never been more dynamic. With active addresses hitting all-time highs, the adoption signals are undeniable. However, as user interfaces improve, the relationship between crypto users and addresses continues to evolve. It’s easier than ever to spin up new addresses, so while the number of active addresses grows, it doesn’t necessarily reflect individual users. The real takeaway here is that crypto infrastructure is becoming more accessible, and with that, the barriers to entry are lowering, which bodes well for future adoption.
Mobile Wallet Use: A Global Perspective
Interestingly, developing countries like Nigeria, India, and Argentina are leading the charge in mobile wallet adoption. This surge shows that crypto offers real-world solutions to populations facing economic instability, high inflation, or limited access to traditional banking. These countries are finding tangible utility in crypto, and their adoption is a powerful indicator of how blockchain can thrive in environments where financial infrastructure is lacking.
Only 5-10% of Crypto Holders Are On-Chain
This stat presents an immense opportunity for startups and projects. If only a fraction of crypto holders are interacting on-chain, there’s a vast market waiting to be tapped. Companies that can improve on-chain experiences, enhance user education, or create innovative financial products stand to benefit greatly from this underdeveloped segment of the industry.
Crypto and Politics: A Growing Force
2024 has shown that crypto is no longer just a niche interest but a political force with growing influence. As more individuals enter the crypto space, the voter base is expanding, and crypto-related issues are becoming more prominent in political discourse. The question now is: how much sway will the crypto community have in shaping future policies?
Stablecoins and the U.S. Dollar
Stablecoins have taken the financial world by storm, now holding a significant portion of U.S. debt. Currently, they rank as the #20 holder, but could they eventually reach the top spot? While that’s uncertain, what is clear is that the demand for stablecoins is growing, especially in regions with unstable fiat currencies. They are increasingly seen as a reliable reserve currency on the internet, offering a digital alternative to the U.S. Dollar for a global audience.
Ethereum Fee Economy and Scalability
The Ethereum fee economy has been a hot topic, especially with transaction fees being lower than before. However, with the next wave of adoption on the horizon, the question remains: have we scaled enough to support it? If the past year’s developments are any indication, Ethereum is getting closer to achieving the scalability required to handle mass adoption without compromising on decentralization.
Crypto x AI: Innovation or Meme?
The intersection of crypto and AI has sparked much debate. Is it just a meme, or are we seeing real innovation? As more projects explore the potential of integrating AI into decentralized applications, this trend has the potential to unlock new use cases. Whether it’s enhancing DeFi, automating smart contracts, or developing more intuitive user experiences, the convergence of AI and crypto may redefine what’s possible.
DeFi Market Share: Are We Going Bankless?
Decentralized Finance (DeFi) continues to push the boundaries of what’s possible without traditional financial intermediaries. But are we truly going bankless yet? DeFi’s market share is growing, but there’s still a long way to go before it can compete with the legacy financial system. The next few years will be critical in determining how far DeFi can scale.
Builder Interest and What’s Next
Despite the challenges, the crypto space is still attracting a vibrant builder community. Developers are pushing the envelope across various sectors, from DeFi to NFTs to Crypto x AI. As we look ahead to 2024 and beyond, the focus will be on how these innovations mature and how well they address the needs of a growing user base.
Crypto is at a pivotal moment. With global adoption rising, political influence expanding, and innovations like AI integration emerging, the future of this space is filled with opportunities. For builders, investors, and everyday users alike, 2024 will be a year to watch.