Morning Minute | The "State of Crypto" from a16z's Perspective

TylerD's Market Summary

🤯 a16z Publishes "State of Crypto"

2024 has been a huge year for crypto.

Bitcoin and Ethereum ETFs have launched, stablecoins are seeing massive global adoption, AI has entered the ecosystem, and crypto has become a key political issue (with a potential BTC Strategic Reserve on the line).

a16z agees, as they outlined in their annual report on the State of Crypto.

What Happened
Yesterday notable crypto VC fund a16z released their annual report "State of Crypto Report 2024", which tracks trends and tech in the crypto industry.

The report calls 2024 crypto’s biggest year yet, with new highs in usage, policy breakthroughs, and groundbreaking tech advancements pushing the industry forward.

The report highlights seven key developments in 2024:

1. Crypto Activity at All-Time: Crypto usage has soared, with 220M active addresses in September alone. Solana, NEAR, and Coinbase’s Base led in activity growth, and mobile wallet usage hit a peak of 29M in June.
2. Key Political Issue: Crypto has become a major election topic, especially in swing states like Pennsylvania and Wisconsin. Recent U.S. crypto policies, such as the FIT21 Act, and the European Union’s MiCA reflect growing regulatory clarity.
3. Stablecoin Adoption: Stablecoins, lauded for fast, cheap transactions, have seen surging volumes, hitting $8.5T in Q2 2024. They're increasingly being used beyond trading, making up 32% of daily crypto usage.
4. Infrastructure Upgrades: Ethereum’s Dencun upgrade and new L2 networks have drastically cut fees and boosted blockchain capacity. Zero-knowledge proof technology is also advancing, opening new doors for developers.
5. DeFi Growth: Decentralized finance, now accounting for 34% of daily usage, continues to thrive. With over $169B locked in protocols, DeFi is challenging traditional financial systems.
6. AI 🤝 Crypto: AI is rapidly intersecting with crypto, with 34% of projects now integrating AI. The report suggests crypto can help decentralize AI compute, potentially countering trends toward tech centralization.
7. New Onchain Applications: Scalability has enabled a boom in applications like NFTs and social networks, with emerging consumer behaviors around low-cost NFTs and blockchain-based social experiences.

What Are They Saying

Some notable quotes from the report:

• Dryden Brown, Praxis co-founder, on infrastructure: “The scaling upgrades and lower fees now make it possible for entirely new kinds of consumer experiences. The next wave of crypto is going to be about user-friendly applications.”
  Daren Matsuoka, one of the report’s authors, on how crypto’s political significance is growing: “The number of policymakers discussing crypto on both sides is unprecedented, highlighting its staying power.”
• Rep. Ritchie Torres (D-N.Y.), discussing stablecoins: “Stablecoins could become the greatest experiment in financial empowerment humanity has ever undertaken.”

Why It Matters

a16z's report offers another reminder to zoom out from daily price action swings.

Crypto is growing and maturing, and its primary proven use cases of store of value (Bitcoin), payments (stablecoins) and speculation (via consumer apps, infrastructure, etc.) are as strong as ever.

The sector is growing and appears to be on the precipice of an explosion in AI Agent adoption.

And financial behemoths like BlackRock have their leader Larry Fink comparing crypto to the early days of the mortgage industry and high yield market, in the early stages of maturation.

The future of crypto is bright - don't get distracted...

🚚 What else is happening in NFTs?

Here is the list of other notable headlines from the day in NFTs:

• Ethereum led NFT trading volume with $5.4M on the day; Bitcoin was next with $2.35M, and then Solana with $1.9M
• ETH NFT leaders were mixed; Punks -1% at 26.3 ETH, Pudgy +1% at 9.1, BAYC -2% at 10.9; Milady led volume +12% to 4.84 ETH
• Smurfcat (+80%) and Treehouse Squirrels (+65%) led top movers
• BTC NFT leaders were mostly red; NodeMonkes -4% at 0.165 BTC, Puppets -3% at 0.17 BTC, OMB -1% at 0.192, Quantum Cats +2% at 0.249
• The Runes leaders were mostly green; DOG +6% at $562M mc, PUPS -12% at $127M, RSIC +5% at $96M mc, BDC +18% to $92M, GIZMO +22% to $18M, and new mint POOKA hit $2.8M on 23 BTC volume
• Solana NFT leaders were mostly red with Mad Lads -1% at 46 SOL, SMB -2% at 19.2 and RCs -17% at 29.2
• Artist Diewiththemostlikes minted out his Notable Pepes card at 0.069 ETH, opening up at a 0.469 ETH floor
• 0xDeafbeef closed his "MOVEABLE TYPE" mint after 100k mints came through on Shape
• mpkoz sold his first 20 Bokeh lamps for $3000 each during his Art Blocks Curated auction on Wednesday, with his other 300 digital pieces to be sold on Oct 21 in a ranked auction
• Gremplin saw over 50k mints on his "Ticker Treat" drop on Base, priced at 0.000666 ETH 
• A "CryptoPunks: Free to Claim" book is now available for preorder, costing $100 with shipping beginning in December 
• PixelVault teased the return of BattlePlan! alongside a potential prize pool of 50,000 $APE
• Faraway chose Avalanche to build its own L1 to support its gaming ecosystem, including notable Web3 games HV-MTL and Legends of The Mara

💰 Token, Airdrop & Protocol Tracker

Here's a rundown of major token, protocol and airdrop news from the day:

🌎 Around Crypto and Web3

A few other Crypto and Web3 headlines that caught my eye:

• Crypto majors are red down 1-2%;  BTC -1% at $67,170; ETH even at $2,610, SOL -2% at $152; FTT was a top alt mover up 15%
• Memecoin majors were also red down 2-4%; DOGE -2%, SHIBA -4%, PEPE -3%, WIF -3%, BONK +2%, POPCAT +1%, and MOG +4%
• A lucky GOAT memecoin trader turned $5,000 into $1.5M during GOAT's run to $300M
• A new memecoin based on Disney Park's new baby tiger "Bakso" was a top mover on Wednesday, running to $10M (now $6M)
• a16z released its "State of Crypto" report, highlighting 7 key developments over the past year
• Vitalik continued his blog outlining his vision for the future of Ethereum with his "part 2: The Surge" piece
• Radiant Capital was exploited for $50M in its 2nd exploit of the year, this time stemming from its multi-sig
• VanEck teased a long-term bet on Parallel with another web3 gaming investment, with details to be announced soon
• Robinhood will allow BTC futures trading in its app
• PayPal's PYUSD has seen its market cap drop by 40% from its $1B high set in August, largely tied to a reduction in supply on Solana as protocols offer less juicy yield

🚀 Memecoin Movers 

• $FOREST (+325% to $13M market cap, SOL)
• $WYAC (+300% to $30M market cap, SOL)
• $JERRY (+50% to $24M market cap, SOL)
• $DOLAN (+41% to $63M market cap, SOL)
• $AUTISM (+35% to $16M market cap, SOL)

📈 NFT Floor Price Increase (ETH)

• Treehouse Squirrel (70%, 0.25 ETH Floor)
• The Llamas (56%, 0.89 ETH)
• Smurfcat (47%, 0.11 ETH)
• Mutant Garden Seeder (37%, 1.15 ETH)
• Honey Bastards (31%, 0.21 ETH)

🗓 Upcoming Mints and Events

Today is another busy day of mints.

ACK is dropping his newest collection in "Tempted in the Garden," consisting of 5 1/1s and a limited edition of 30 (with prints and digitals).

Then Gizmo the Cat is doing an Ordinals mint, following the recent success of the Runes (though not affiliated).

See the full list and dive in for more details with Swizzy's daily mint monitor. 

• Today - Mythic Seeds (10:00 a.m. ET)
• deBridge - DBR token launch (12:00 p.m. ET)
• RJ x Verse - Crash (1:00 p.m. ET)
• ACK - Tempted in the Garden (2:00 p.m. ET)
• Gizmo The Cat (5:00 p.m. ET)

Enjoy this write-up and/or want to sponsor the Morning Minute? Follow along with me on Twitter @tyler_did_it or reach out via email to tyler.d.warner@gmail.com.