Grayscale report: Cryptocurrency market value exceeds global inflation-linked bond market value in Q4 2024

According to a report by Grayscale Research, the cryptocurrency market capitalization rose from US$1 trillion to more than US$3 trillion in the last quarter of 2024, surpassing the total value of the global inflation-linked bond market. At one point, the cryptocurrency market capitalization was even twice the total market capitalization of the U.S. high-yield bond market. However, the report data shows that the cryptocurrency market capitalization is still significantly smaller than the global hedge fund industry or Japan’s approximately $4.5 trillion stock market. As of writing (December 31, 2024), the cryptocurrency market capitalization is approximately $3.3 trillion. The significant growth in cryptocurrency market capitalization in the fourth quarter was largely attributed to Trump’s election victory in November. The smart contract platform space was particularly competitive during the quarter, with Ethereum and Solana emerging as the dominant players. So-called high-performance blockchains are also attracting significant attention in this category. “Investors are also eyeing other L1 networks, including high-performance blockchains like Sui and TON integrated with Telegram,” the Grayscale Research report explains. Despite increased competition, smart contract platforms face various design choices that impact the scalability, security, and decentralization of the network, and these specific design choices also result in different block times, transaction throughput, and average transaction fees. At the same time, the report stated that there is a statistical relationship between the fee income and market capitalization of smart contract platforms. In other words, the greater a network’s ability to generate fee revenue, the greater its ability to pass value to the network through token burns or staking rewards.