We recently had the pleasure of hosting the team at Blockchain Founders Fund for an enlightening conversation on the monumental evolution of cryptocurrency. Our discussion illuminated the key drivers behind the recent market surge, the influx of institutional capital, and the foundational advancements solidifying crypto's place in the global economy.
Our discussion highlighted the impressive resurgence of the cryptocurrency market. From 2021-2022, Bitcoin surged to $69,000, propelling the overall listed cryptocurrency market capitalization from $300 million in 2020 to an astounding $2.8 trillion by November 2021. While 2020 saw $5.5 billion invested across approximately 1000 deals, reflecting early investor interest, by 2022, capital invested soared to $33.3 billion across 2670 deals. Even during the bear market of 2023, crypto venture capital deployment marked its third-largest year on record. Most recently, 2024 has witnessed a moderate rebound in funding, alongside Bitcoin and other crypto assets reaching all-time highs, pushing the overall market cap to a remarkable $3.8 trillion.
A significant catalyst for this market expansion has been "The ETF Push". The US approved 11 spot Bitcoin ETFs in January 2024, marking a pivotal moment. These ETFs attracted an impressive $1.9 billion in inflows within their first three days, setting a new record for event ETF launches and surpassing inflows seen in gold and tech funds. As of June 2025, the total Assets Under Management (AUM) for US Spot Bitcoin ETFs alone stands at approximately $135 billion. Globally, the landscape is even broader, with over 20 Bitcoin Spot ETFs collectively exceeding $160 billion in AUM. Leading the charge among these are BlackRock's IBIT with $75 billion in AUM, Fidelity's FBTC at $33.5 billion, and Grayscale's GBTC at $19.9 billion.
A critical theme in our discussion was the substantial entry of institutional and traditional businesses into the crypto space, which is recognized as one of the biggest catalysts for the current Crypto Bull Run. Filers ranked by institution type in Q1 2025 reveal significant activity from hedge funds, such as Millennium Management Inc. ($1,855.0 million). Companies such as MicroStrategy have made headlines for their massive Bitcoin holdings, currently holding 597,325 BTC valued at an estimated $65.7 billion.
Adoption and activity metrics underscore the growing mainstream acceptance of cryptocurrency. Monthly active wallet addresses have reached 220 million globally, with estimated actual users ranging from 30 million to 60 million, accounting for duplicate addresses. Among the most active networks, Base (22M monthly active addresses) and Solana (with 7.7K net new developers in 2024) are leading the charge, largely due to their attractive cost structures and enhanced interoperability across networks.
The crypto sector is undergoing a significant phase of consolidation, as larger players and traditional businesses strategically acquire entities, thereby injecting crucial liquidity for early-stage investors. This trend is evidenced by a series of high-profile acquisitions: Mastercard's acquisition of CipherTrace in September 2021, Cboe Global Markets completing its acquisition of ErisX in May 2022, Coinbase acquiring One River Digital Asset Management, Binance's $400 million bid to acquire CoinMarketCap in March 2020, Robinhood completing its $200 million acquisition of crypto exchange Bitstamp in June 2025, and PayPal acquiring Curv in March 2021.
A crucial point highlighted in our conversation was that crypto infrastructure is maturing and scaling. The ecosystem is becoming increasingly multichain, facilitating seamless value flow between interoperable blockchains. A significant portion of Ethereum's activity is now migrating to Layer 2 (L2) solutions, which effectively reduce costs for users and enable access to applications built across various networks.
Ethereum's scaling efforts since 2021 have dramatically slashed on-chain transaction costs by over 99%. To illustrate, sending USDC internationally via traditional wire transfer costs an average of $44. On Ethereum, this cost decreased from $12 (2021 average gas price) to $1 (Sept 2024 average gas price). However, the most striking reduction is seen on Base L2, where the average gas price for sending USDC in September 2024 was less than $0.01.
Finally, our discussion underscored that stablecoins have found a strong product-market fit, particularly in payments. Their activity has continued to grow even amidst crypto market volatility, emphasizing their adoption beyond just exchange trading. Circle, the issuer of USDC, went public with an initial valuation of roughly $6.8 billion, and today boasts a market cap of $50 billion. In FY2024, Circle Internet Group reported $1.68 billion in revenue, $215.9 million in EBITDA, and $155.7 million in profit. Stablecoins have already facilitated an impressive $8.5 trillion in transaction volume across 1.1 billion transactions.
