2024 Industry Review and Outlook: The Rise of Stablecoin Payments and the Untapped Potential of BTC Layer 2

Jan 30, 2025

Author | Cobo

We’ve bid farewell to 2024, and the crypto industry stands at a pivotal moment. Groundbreaking advancements in blockchain security, stablecoin payments, AI-driven applications, exchanges, and BTCFi have shaped the landscape — and represent the future we’re committed to building.

We’ve compiled key trends that defined 2024 and offer insights into what’s ahead for 2025.

Key Takeaways

· CEX Market Evolution: Binance’s market share has declined from 50.9% to 42.5%, while mid-sized exchanges and DEXs are gaining ground. Traditional scale advantages are giving way to efficiency-driven competition, pointing to a three-way market battle in 2025 between major CEXs, innovative mid-sized exchanges, and DEXs.

· Security Landscape: While exploited addresses increased by just 3.7%, total financial losses surged 67%, with the largest single theft reaching $55.48 million. Attackers have shifted from mass phishing to sophisticated, targeted exploits.

· Bitcoin Layer 2 Opportunity: Unlike Ethereum’s dual L1/L2 innovation model, Bitcoin’s L1 lacks programmability, pushing all development and capital flow into L2 solutions. This dynamic is unlocking a trillion-dollar market, with major applications requiring Bitcoin L2 infrastructure and higher security standards than Ethereum’s L2 solutions.

· Stablecoin Evolution: Stablecoins are transitioning from crypto assets to mainstream payment infrastructure. Stripe’s $1.1 billion Bridge acquisition marks a watershed moment, as fintech giants actively integrate stablecoins to reduce costs and expand market reach.

· Stablecoin Market Restructuring: Full-service infrastructure providers like Bridge are scaling through mergers, while regional API services focus on compliance, pricing, and service differentiation. Companies like Cobo are specializing in custom wallet technology, risk management, and enterprise stablecoin solutions.

· AI Integration: The AI x Crypto sector is shifting from hype to utility. While uncertainty remains, AI Agents delivering practical value will dominate the industry. This shift will need to be supported by dedicated decentralized payment solutions — much like traditional businesses need banking infrastructure.

The Reshaping of Stablecoin Payments

Stablecoins are undergoing a fundamental transformation, evolving from crypto assets to core payment infrastructure. This shift is happening on two fronts: grassroots market demand and top-down infrastructure development.

Market Demand

Research by Castle Island Ventures shows stablecoins revolutionizing financial access in underbanked regions like Brazil and India. They’ve become essential tools for remittances, payments, savings, and inflation hedging — proving their real-world utility beyond speculation.

Infrastructure Advancement

Stripe’s $1.1 billion Bridge acquisition marks a significant milestone. Through Bridge’s API services, Stripe has drastically reduced cross-border payment costs — sending USDC on Base now costs under $0.01, compared to traditional $44 per transaction. This positions Stripe as a direct infrastructure operator, bypassing legacy banking systems.

Key Developments

·From Dependency to Autonomy: Before acquiring Bridge, Stripe relied on Visa and Mastercard, involving multiple intermediaries per transaction. Direct stablecoin settlement integration has created their own financial “pipes,” reducing costs and improving efficiency.

· Simplified Global Payments: Previously, sending stablecoins to Latin America required navigating local banking integrations, regulatory approvals, and multi-currency liquidity. Bridge consolidates these complexities into a simple API.

The stablecoin payments landscape continues evolving through:

· Full-service infrastructure providers scaling via M&A

· Regional API providers differentiating through compliance and services

· Specialized players like Cobo focusing on secure wallet technology and risk management

The Fall of CEX Dominance and the Rise of DEXs

The centralized exchange landscape is experiencing structural changes. Binance’s market share drop from 50.9% to 42.5% signals that scale alone no longer guarantees market leadership.

According to 0xScope’s 2024 CEX Market Report, Binance’s spot trading volume declined as its token listing strategy struggled. High pre-launch valuations often led to weak post-listing performance, while agile mid-sized exchanges and DEXs quickly adapted to emerging trends like meme coins.

Competitive Landscape

· Efficiency Focus: Competition has shifted from volume to execution speed. Platforms listing tokens within 24–48 hours of market discovery saw explosive growth.

· Security Innovation: The FTX collapse highlighted asset security importance. New solutions like Superloop are leveling the playing field through asset-mirroring mechanisms.

· DEX Evolution: Innovations like Hybrid Order Book-AMM models are bridging the CEX-DEX divide, making decentralized platforms more efficient.

The $TRUMP token launch demonstrated DEX capabilities, reaching $10 billion+ in market cap purely through decentralized trading. By 2025, a three-way market battle between top CEXs, mid-sized innovators, and emerging DEXs can be expected.

Bitcoin Layer 2: A Trillion-Dollar Undervalued Market

The significance of Bitcoin Layer 2 remains undervalued. Unlike Ethereum’s clearly defined split between L1 and L2, Bitcoin’s L1 lacks programmability, resulting in all advancements, such as DeFi, privacy tools, smart contracts — being forced onto L2.

Key Factors

1. Innovation Concentration: All Bitcoin innovation must occur on L2, making it the exclusive growth hub

2. Enhanced Security Requirements: Bitcoin’s L2 networks need stronger security than Ethereum’s for high-value transactions

3. BTCFi Potential: Experts predict multi-trillion-dollar market cap potential, possibly exceeding Ethereum’s peak ecosystem value

Companies like Cobo are pioneering security solutions through MPC custody and staking innovations.

The Evolution of AI x Crypto

The industry is moving from speculative AI tokens to functional AI Agents — autonomous entities handling financial transactions, trading, and asset management.

Market Segments

1. AI Agents: Standalone automated applications

2. Frameworks: Development platforms

3. Launchpads: Funding and scaling solutions

While most AI tokens may fail, AI Agents demonstrating clear market-product fit will thrive in the DeFi and gaming spheres. These Agents will require native decentralized payment solutions, driving demand for specialized infrastructure from companies like Coinbase, Skyfire, and Stripe.

Looking Ahead: 2025 and Beyond

Key themes for 2025:

- Bitcoin Layer 2 and BTCFi expansion

- Stablecoins reshaping global payments

- DEX market share growth

- AI x Crypto utility development

Success in the Web3 space will favor those prioritizing long-term growth, security, scalability, and efficiency.

As the future of crypto takes shape, stay ahead with Cobo’s expert solutions — connect with our team today.

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