In early January, Gate platform released the 2024 Annual Report on Cryptocurrency Fund Flows. Against the backdrop of Bitcoin halving, the expansion of spot ETFs, and a tightening regulatory environment, the report systematically outlines the migration trajectories of funds across different assets, sectors, and regions throughout the year. The report indicates that during a phase of high macro interest rates and liquidity structure repricing, funds have significantly concentrated on leading assets, with Bitcoin emerging as the biggest winner across cycles, while altcoins, represented by high β, face overall "tide-receding" pressure. Centered around this main theme, the report provides a relatively complete picture from multiple dimensions, including annual net fund inflows, asset structure differentiation, institutional fund preferences, and regional fund migrations, while also exposing the current fragile links within the cryptocurrency market.
Fund Flows and Market Structure Reconfiguration
● Annual Scale and Direction:
● The report shows that in 2024, cryptocurrency assets overall still maintain a net inflow pattern, but incremental funds are highly concentrated in a few mainstream assets like Bitcoin; compared to the last complete bull market phase, the broad participation of funds has significantly shrunk, with funds leaning towards "careful selection" rather than a comprehensive approach.
● Throughout the year, the flow of funds among different assets exhibits a "single-core driven" characteristic, with Bitcoin's fund absorption effect significantly enhanced, while the liquidity of mid to long-tail assets has experienced periodic drought.
● Bitcoin's Absolute Advantage:
● Under the combined effects of continuous expansion of spot ETFs, traditional institutions increasing allocations, and the strengthening narrative of "digital gold," Bitcoin has become the core target for mid to long-term allocation in 2024, being the only asset class in the report that has consistently maintained net inflows and stable growth across multiple quarters.
● The report mentions that Bitcoin-related products on Gate show a structural characteristic of increasing positions + decreasing turnover throughout the year, indicating a decline in short-term speculative trading and an increase in long-term allocation weight.
● Systematic Pressure on Altcoins:
● In contrast, altcoins recorded significant fund outflows in 2024, with some high-market-cap protocols still attracting funds during periodic market conditions, but from an annual perspective, most varieties struggle to offset the net outflow pressure caused by high-level retracements.
● The report points out that projects lacking clear cash flow support or strong network effects are more likely to encounter passive sell-offs due to "no one taking over" after liquidity tightens and narrative fatigue sets in, leading to a continuous outflow of funds throughout the year.
● Sector Rotation and Structural Differentiation:
● At the sector level, segments with real demand or on-chain revenue support (such as certain on-chain derivatives and infrastructure projects) are relatively resilient, while segments relying on sentiment and expectations (such as purely conceptual memes or unimplemented application narratives) experience greater volatility in fund flows, with annual net inflows being more unstable.
● The report emphasizes that funds within sectors also exhibit a highly concentrated "Matthew effect," with leading protocols capturing the vast majority of residual liquidity, while tail projects are rapidly marginalized by the market.
The Funding Scissors Gap Between Bitcoin and Altcoins
In 2024, a clear scissors gap has formed in the funding performance between Bitcoin and altcoins. This differentiation is not merely a comparison of strength in price dimensions but reflects deep changes in risk appetite, macro environment, and institutional participation structure. The report shows that Bitcoin has attracted funds during multiple key time windows throughout the year, and when macro uncertainties increase or regulatory events trigger panic, some funds originally allocated to high-risk altcoins choose to migrate passively or actively to Bitcoin, resulting in the accumulation of a "risk premium." This migration is not a transient emotional fluctuation but gradually solidifies into a systematic allocation behavior against the backdrop of accelerated ETF and compliance channel expansion.
At the same time, altcoins face significant valuation reset pressure under the intertwining of high volatility, high leverage, and liquidity tightening. Gate's data indicates that during market pullbacks, altcoins often face concentrated selling pressure first, with the speed of fund outflows exceeding that of mainstream assets. Many projects, lacking incremental buying pressure, can only rapidly reduce prices to match lower risk appetites. The other side of the funding scissors gap is the divergence in behavior patterns between institutions and retail investors: institutional funds tend to view Bitcoin as a strategic asset, while retail funds are more inclined to chase short-term bursts in the altcoin sector. However, when the main market trend shifts towards stability and higher liquidity requirements, retail behavior is also forced to contract with the overall environment, exacerbating the "amplified" bear market effect in the altcoin sector.
Regional Fund Migration and Structural Opportunities
The flow of funds at the regional level is another focal point worth noting in the Gate report. The report shows that in 2024, the asynchronous regulatory, monetary environment, and economic cycles across different global regions have led to stark contrasts in fund migrations. In developed markets with relatively clear regulatory environments and smoother compliance channels, institutions and high-net-worth individuals are increasing their allocations to mainstream assets like Bitcoin through ETFs, thereby driving a "northward inflow" of funds centered on compliance models.
In contrast, in regions where local currencies are under continuous pressure or where trust in the financial system is lacking, cryptocurrency assets are increasingly viewed as a "hard currency alternative" and a tool for capital flight. The report specifically mentions countries like Venezuela, where high inflation and significant currency devaluation have led residents to use assets like Bitcoin not only for investment speculation but also for cross-border transfers and value storage, creating a demand structure completely different from that of developed markets. Fund data also reflects that once local currencies experience severe fluctuations, the on-chain and on-site activity in these regions will simultaneously surge, exhibiting typical "risk-averse purchasing" behavior.
Meanwhile, some Asian markets maintain a certain degree of flexibility and experimentation in policy attitudes, resulting in a multi-layered market structure within the region: on one hand, compliance-friendly jurisdictions attract trading platforms and project parties, while on the other hand, some markets with unclear regulations easily become concentrated areas for high-risk products and high-leverage trading. Gate's data suggests that regional fund migration is not simply "from A to B," but rather forms a multi-center, multi-layered fund network under the joint influence of regulatory boundaries and capital demands, providing an important reference for understanding potential structural opportunities that may arise in the future.
The Structure of Bull and Bear Forces and Fund Games
Surrounding the funding flow pattern in 2024, the internal bull and bear forces in the market have formed a tense confrontation. The bullish camp believes that Bitcoin's demonstrated resilience and continuous fund absorption effect against the backdrop of high macro interest rates and persistent inflation have preliminarily validated its position as a "core allocation of digital assets," and the expansion of spot ETFs and the entry of more institutions also mean that every future macro easing cycle will amplify its price elasticity. They particularly emphasize that the changes in fund structure presented in the Gate report essentially represent a long-term process of "credit migrating to on-chain," with Bitcoin, as the asset closest to the traditional financial paradigm, naturally becoming the main battlefield for this migration.
In contrast, the bearish or cautious camp is more concerned about the structural risks brought about by the current concentration of funds. They point out that while the high concentration of funds in a few leading assets and sectors enhances the short-term resilience of these assets, it also sows the seeds of potential "resonance risk"—once the macro environment suddenly reverses or regulatory negatives concentrate, this concentration will amplify the magnitude of systemic pullbacks. Regarding the altcoin sector, the cautious believe that the general outflow of funds in 2024 is not the end but a deep correction of the previous round of high valuations and bubbles, with many projects' market values continuing to converge towards more reasonable or even undervalued levels, accompanied by liquidity collapse and project clearances.
At the regional level, there are also significant divergences in bullish and bearish views. Optimists believe that the rigid demand of emerging markets to combat local currency depreciation will continue to provide "bottom buying" for assets like Bitcoin, while compliance products in developed markets will offer a channel for ceiling expansion. Pessimists warn that if global regulations tighten further in the future and cross-border capital flows are further restricted, some funds currently relying on regulatory gray areas may be forced to halt, thereby suppressing overall incremental funds.
Key Time Windows and Fund Flow Outlook
Looking ahead to the next few quarters, the funding trajectory presented in the Gate report for 2024 provides important references for predicting the next stage's key time windows. In the short term, the market will continue to focus on the macro interest rate path, regulatory progress in the U.S. and Europe, and changes in growth expectations of major economies. Once signals of clear easing expectations and overall valuation recovery of risk assets emerge, Bitcoin is expected to gain further favor from allocation funds on the existing funding basis, maintaining its position as the "only winner." Structurally, if Bitcoin continues to maintain stable net inflows while the clearance process for altcoins approaches its end, the market may form a stable pattern centered on mainstream assets, with selected altcoins as a supplement in the future.
In the medium term, regional fund migration will remain an important variable affecting market structure. The expansion of compliance channels in developed markets and monetary pressures in emerging markets will jointly shape the direction of fund flows across different jurisdictions, while platform-based institutions will further strengthen their role as "liquidity routers." For investors, it may be more important to understand the institutional logic and macro pricing framework behind changes in fund structure rather than simply chasing high β, seeking assets and sectors that can both accommodate compliant funds and have real demand support.
From a longer-term perspective, the funding scissors gap between Bitcoin and altcoins presented in 2024 may only be the starting point of a new round of cycle reconstruction. As the boundaries between traditional finance and the crypto world continue to blur, funds will traverse on-chain and off-chain with greater efficiency, and the relative value between assets will increasingly depend on real cash flows, network effects, and regulatory adaptability. In such an environment, any asset that deviates from fundamental constraints and relies solely on narrative-driven growth will inevitably struggle to sustain incremental funds in the long term, while assets like Bitcoin, which have already been incorporated into the global asset allocation framework, may continue to solidify their core position in every round of macro shocks.
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