 Who’s really getting rich from the crypto bull run? 
2024-12-06

An ongoing memecoin trading frenzy amid the cryptocurrency bull run is allowing traders to experience dizzying highs and lows, yet those benefitting from the “gold rush” appear to be the sellers of picks and shovels, the crypto infrastructure providers.
Memecoin popularity has seen Solana-based decentralized applications (DApps) gather record revenue from activity onchain, with automatic market maker Raydium seeing a record $11 million in 24-hour fees earlier this month.
Onchain activity for Solana exploded over the past few weeks, with decentralized exchange (DEX) daily volumes surging from about $1.6 billion to a $10 billion peak, according to Blockworks data.
Crypto bull markets, including this one, have often drawn comparisons to the California Gold Rush, which occurred between 1848 and 1855 after gold was discovered at a construction site, sparking mass migration as miners flocked to the area.
By 1853, about 250,000 gold miners had moved to the area, and the extraction of gold rose rapidly. Still, it’s widely believed that most of the wealth didn’t go to the miners but to the entrepreneurs who provided them with goods and services.
In other words, those selling picks and shovels made the real money, not those using them to find gold. 
In crypto, those selling picks and shovels are infrastructure providers, including trading platforms, blockchain networks, wallet providers, payments systems and other decentralized applications.
Speaking to Cointelegraph, Gracy Chen, CEO of cryptocurrency exchange Bitget, agreed that the “picks and shovels” analogy remains relevant in a cryptocurrency market context “as it represents the essential infrastructure required for cryptocurrency and the broader ecosystem to function.”
Comparing the sector to the California Gold Rush, Chen pointed to the 2017-18 initial coin offering (ICO) boom, which ended with various investors suffering losses, while “ICO founders reaped significant profits, often including in luxury purchases like Lamborghinis and extravagant villas.”
A Binance spokesperson told Cointelegraph the “picks and shovels” analogy is “not a perfect fit for the multi-dimensional nature of crypto markets,” but agreed it “describes the entities providing essential infrastructure and services” including “stablecoin issuers, blockchain networks, mining companies and ETF [exchange-traded fund] providers, among others.”
Benefitting from the crypto gold rush
In the chart above, it’s clear decentralized exchanges on Solana are reaping the benefits, as trading volumes — and, as a result, collected fees — have soared thanks to the memecoin trading frenzy.
David Gogel, vice president of strategy at the dYdX Foundation, told Cointelegraph that historically, exchanges “have consistently been the biggest beneficiaries of bull runs, as trading volume surges drive substantial revenue from fees.”
Gogel added that while he sees the trend continuing, in the current market cycle, a new class of “sophisticated non-custodial wallets” like Phantom is “capturing significant activity through their mobile apps.” They manage to do so by offering a seamless integration into the ecosystem in which the trading frenzy is ongoing.
Vijay Chetty, CEO of the first layer-2 network combining Ethereum and Solana, Eclipse, said cryptocurrency gateways and asset issuers like Circle and Tether benefit from the growth of the stablecoin supply and act as on-ramps for users.
Token and memecoin launchpads such as Pump.fun are also doing well, Chetty said. Aggregators such as Jupiter, which facilitates swapping activity, and Solana MEV (Maximum Extractable Value) and liquid staking platforms such as Jito are also generating a “significant amount of fees,” he added.
Indeed, Dune Analytics data shows that daily transaction volumes on Pump.fun, a platform used for token launches, have exploded over the last few weeks. The platform became so popular that it had to deactivate its live-streaming feature after facing backlash over the explicit content it hosted.
Illia Otychenko, a lead analyst at cryptocurrency exchange CEX.IO, told Cointelegraph that infrastructure providers — including oracles and software development kit providers — are also “well-positioned to thrive,” but added each market cycle introduces a new type of gold.
According to Otychenko, in 2021, about 71% of the total value locked in decentralized finance was concentrated on decentralized exchanges and lending platforms, while in the current cycle, it has shifted so that “liquid staking and restaking [are] emerging as major beneficiaries.
However, Binance’s spokesperson pointed out that cryptocurrency users may also benefit from the frenzy due to the “unique dynamics of the crypto market.” They added:
As a result, they said that while infrastructure providers remain critical in the ecosystem’s growth, the “winners in crypto markets may include traders, speculators, and venture capitalists.”
Bitget’s Chen echoed the sentiment, saying, “Anyone adept at utilizing advanced technologies can profit from digital assets — not just the developers or providers of these technologies.”
Is the current crypto bull run sustainable?
The current crypto market boost may benefit traders and infrastructure providers, but observers are uncertain how long the bull run will last.
CEX.IO’s Otychenko said the surge “doesn’t appear to be sustainable” after volumes exploded but added that it could “potentially establish a new baseline for Solana fees.” He noted that in March 2024, Solana’s daily fees soared from $200,000-$400,000 to $2 million-$3 million before stabilizing in the $1 million-$2 million range.
Binance’s spokesperson said that while the frenzy indicates heightened user engagement and activity, its “sustainability remains uncertain.” Fee spikes may “typically be intermittent, closely tied to broader market cycles and specific events.”
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The long-term outlook will depend on “how market narratives and user behavior evolve.” They added:
This, they concluded, could include an expansion into gaming, decentralized finance and “other high-growth areas that may foster long-term utility and participation.” Business models may also change as the market adapts, with potential dynamic fee structure implementations if fees surge to prohibitive levels.
Bitget’s Chen said that we’re seeing a “stress test for the existing blockchain infrastructure,” adding that addressing high transaction fees and increasing throughput “has become urgent again.”