1confirmation Q2 2024 Investment Report: Lack of Innovation, Ethereum Market Cap to Surpass Bitcoin Within Five Years

The prominent venture capital firm 1confirmation emphasized in its latest Q2 2024 investment report that cryptocurrencies are increasingly impacting traditional finance and government sectors. The report analyzed the success of Bitcoin and Ethereum ETFs, the political landscape's impact on the crypto industry, and key technological trends that may drive market growth in the future.

Integration of Cryptocurrency: ETFs and Political Influence

2024 is undoubtedly a significant year for the cryptocurrency industry. With the success of Bitcoin and Ethereum ETFs on Wall Street, cryptocurrencies have become an integral part of traditional finance. Currently, the assets under management (AUM) of Bitcoin ETFs have exceeded $780 billion, while Ethereum ETFs have reached $80 billion. Furthermore, as President Biden's anti-crypto policies face widespread rejection, both parties have gradually realized the difficulty of maintaining an anti-cryptocurrency stance. Cryptocurrency companies have donated $1.19 billion during this election cycle, accounting for 48% of total corporate donations.

Lack of Innovation: Repetitive Use Cases and Challenges with New Users

Despite significant progress in policy and finance within the cryptocurrency industry, recent reports indicate a lack of new consumer applications.

Popular products like meme coins on Solana and NFTs on Bitcoin are actually repetitions of past DeFi and NFT concepts. These products attract existing users and funds but struggle to bring in a large number of new users. The report emphasizes that the core question every cryptocurrency investor needs to consider is: What kind of products can truly attract over a billion users into the crypto world?

Ethereum Market Cap to Surpass Bitcoin Within Five Years

1confirmation firmly believes that Ethereum's market cap will surpass Bitcoin's in the next five years. Although Bitcoin's current market cap of around $1.2 trillion is four times that of Ethereum's $321 billion, Ethereum's actual applications and technological innovations in the blockchain field have greater potential. The report suggests that Ethereum is where the world's best developers are building decentralized network platforms, with ETH serving as the "digital oil" that powers this ecosystem. As Ethereum's market value gains more institutional recognition, rapid growth in its market cap is expected.

Market Predictions: Breakout Applications in 2024

The report highlights that market predictions will be the biggest highlight of 2024, with its market size potentially growing 100 times in the coming years. Polymarket is considered the best tool currently focusing on the U.S. presidential election and other global events, being the first crypto product that people use daily without being aware. This year, Polymarket's trading volume has exceeded $1.1 billion, with this growth relying on stablecoins on Ethereum. After the election, the prediction market is expected to see greater potential for development in news, culture, sports, and other fields.

The Future Outlook of DeFi, NFTs, and Emerging Applications

The report predicts a strong comeback for decentralized finance (DeFi) and NFTs, with new applications like SocialFi rising through application chains, layer-two, and layer-three networks. Non-custodial products will continue to expand, allowing users to trade, borrow, mint coins, and earn without relying on third parties. With the rise of layer-two networks like Base and specialized application chains, the user experience and scalability of cryptocurrencies will significantly improve, further expanding the market size. The report emphasizes that tribalism among L1 chains will gradually fade, and excellent developers will build in the most valuable and influential places.