AI and Memecoins Dominate 2024 Crypto Gains, While Layer 2 Struggles

CoinGecko’s year-end report for 2024 paints a vivid picture of the crypto market’s most notable trends, highlighting significant contrasts in performance across various sectors.

While artificial intelligence (AI) and memecoins dominated the year with impressive gains, other areas, such as Layer 2 solutions, struggled to keep pace.

AI projects stole the spotlight in 2024, surging by an average of 2,940% and marking their territory as the year’s top performers. This explosive growth was largely fueled by the success of the Virtuals Protocol (VIRTUAL), which became a standout player in the sector. A late-year rally nearly doubled AI’s earlier gains, positioning it as a frontrunner for long-term profitability.

Memecoins followed closely, capturing investor attention with an average return of 2,185%. A remarkable spike in March saw the sector’s returns leap from under 100% to over 1,700% within weeks, demonstrating the volatile yet lucrative nature of these assets. However, despite a December peak of over 3,200%, memecoin enthusiasm began to wane as the year drew to a close.

Real-world assets (RWA) quietly carved out their place, achieving steady growth with an average annual return of 820%. After a slow mid-year period, renewed momentum in November, partly driven by the performance of MANTRA (OM), helped the sector finish strong.

Conversely, Layer 2 projects faced a challenging year, reporting average losses of 21%. The sector’s underperformance was driven by widespread declines across top projects, as well as a shift toward building independent Layer 2 networks, which struggled to deliver consistent results.

While 2024 showcased the incredible potential of certain crypto trends, it also revealed the challenges facing less dominant sectors, setting the stage for new opportunities and adjustments in the year ahead.