Bitcoin and Ethereum Shine Amid 7000% Surge in Layer-1 Blockchain Tokens, but Competition Intensifies

• Layer 1 blockchains experienced an explosive growth of 7000% in 2024, significantly driven by Bitcoin and Ethereum, yet lesser-known tokens achieved remarkable success as well.

• According to analytics by CoinGecko, factors such as Trump’s electoral success and favorable market conditions have significantly contributed to this crypto bull run, igniting fierce competition among L1 and L2 solutions.

• Newly established Layer 1 projects launched in 2024 are grappling with severe challenges while established protocols continue to thrive in niche sectors like RWA tokenization.

Layer 1 tokens soared by 7000% in 2024, with notable influence from Trump’s win; however, competition from L2 solutions presents challenges for new players.

Layer-1 Tokens Surge in 2024

As reported by CoinGecko, the cryptocurrency market has witnessed a staggering 7000% increase in Layer-1 token valuations since the beginning of 2024. Key contributors to this surge include major players like Bitcoin and Ethereum, while unexpected tokens have also shown impressive growth rates within specific market segments. Analysts point to several macroeconomic factors, with Trump’s recent electoral victory serving as a pivotal moment that rejuvenated investor confidence.

“The cryptocurrency market in 2024 has gone vertical, encouraged by Trump’s election victory. The demand for L1 solutions has surged… with competition intensifying among L1 blockchains to secure market dominance. However, they are facing stiff competition from Layer-2 solutions, which focus on enhancing transaction speeds and efficiency,” CoinGecko noted in their latest report.

Data reveals that while established blockchains like Bitcoin, Ethereum, and Solana lead the market cap rankings, there are emerging contenders that have outperformed these giants in percentage growth. The CEO of analytics firm CryptoQuant has pointed out that Bitcoin could potentially become a global currency by 2030, underscoring its significant market advantage.

Despite this, Bitcoin’s inability to breach the $100,000 mark last week has raised questions about continued momentum; overwhelming market greed could lead to delays in achieving this target. Conversely, new Layer 1 assets are capitalizing on unique advantages in diverse areas.

Best Performing Layer-1 Coins. Source: CoinGecko

Among these new projects, Mantra (OM) has recently hit an all-time high, leveraging its partnership with the burgeoning RWA tokenization industry. Similarly, AIOZ has shown consistent growth, propelled by its innovative content delivery network model. CoinGecko has also observed that the growth of Layer-2 networks is creating an increasingly competitive landscape for Layer-1 tokens.

Compounding the challenges for new Layer-1 contenders, CryptoQuant has underscored the robust competition that exists within the space. Their analysis indicates that many Layer-1 initiatives launched this year have struggled significantly, while established protocols continue to leverage their existing user bases and technological superiority. This trend is increasingly pronounced as the demand for efficient Layer-2 infrastructures continues to rise.

Established Protocols’ Competitive Edge

Established Layer-1 blockchains are not only benefiting from first-mover advantages but are also adapting to market demands, which positions them favorably against newer entrants. These protocols thrive in specific niches, such as Real World Asset (RWA) tokenization, which addresses the growing need for blockchain solutions in traditional asset markets. This adaptability is crucial in a market that values speed and scalability, often at odds with the more cumbersome development of entirely new protocols.

Conclusion

In summary, the crypto landscape in 2024 has demonstrated a remarkable surge in Layer-1 token values, powered largely by leading projects like Bitcoin and Ethereum, alongside surprising new entrants. While established blockchains continue to dominate, the competitive pressures from Layer-2 solutions pose challenges for new Layer 1 projects striving for market relevance. Investors and participants should remain vigilant and informed of ongoing developments in this dynamic environment, ensuring a proactive approach to opportunities and risks within the crypto space.