2025 was a landmark year for the cryptocurrency industry, marked by significant market divergence. Total market capitalization surpassed $4 trillion for the first time, with Bitcoin (BTC) reaching a new all-time high (ATH), reflecting continued institutional adoption, regulatory progress (particularly surrounding stablecoins), and the expansion of regulated investment products. Simultaneously, high macroeconomic uncertainty driven by monetary policy, trade tensions, and geopolitical risks dominated market behavior, leading to sharp price fluctuations and multiple instances of risk aversion. This resulted in an extremely wide trading range throughout the year, approximately 76%, with total market capitalization fluctuating significantly between approximately $2.4 trillion and approximately $4.2 trillion. Despite structural improvements in market access and infrastructure, the crypto market still declined by approximately 7.9% for the year, highlighting that price formation in 2025 was increasingly influenced by macroeconomic conditions and traditional financial cycles, rather than simply driven by native crypto adoption.
From a macro perspective, this year was characterized by a "data fog" and volatility, with the market struggling against the backdrop of a new US administration, the impact of Liberation Day tariffs, and the economic signals obscured by the government shutdown. While AI speculation and the OBBBA fiscal bill propelled BTC to new highs in the second half of the year, regulatory delays caused the crypto market to decouple from the rebound of traditional assets by the end of 2025. However, the outlook for 2026 shows a clear "risk restart," driven by the "policy triad": synchronized global monetary easing, massive fiscal stimulus (through cash/tax refunds), and a wave of deregulation. This shift is expected to replace retail-driven speculation with institutional inflows, leading to a liquidity-driven expansion for cryptocurrencies and potential support from the US Strategic Bitcoin Reserve.
Bitcoin exhibited a clear divergence between structural market-level strength and underlying economic activity. BTC reached new highs for the year but closed slightly lower, underperforming gold and most major stock indices, while its market capitalization remained around $1.8 trillion, maintaining a market dominance of 58-60%. Despite the relatively weak price performance, the concentration of funds in BTC continued to intensify: US spot ETFs saw net inflows exceeding $21 billion throughout the year, and corporate holdings exceeded 1.1 million BTC, equivalent to approximately 5.5% of the total supply. Network security continued to improve, with a hash rate exceeding 1 ZH/s and mining difficulty increasing by approximately 36% year-over-year, indicating continued strong miner investment. In contrast, underlying activity slowed: active addresses declined by approximately 16% year-over-year, transaction volume was lower than previous cycle peaks, and speculative token activity only saw brief and unsustainable bursts. Overall, these signals suggest that Bitcoin liquidity, price formation, and demand are increasingly being realized through off-chain financial channels and holding behavior, with the underlying layer playing a secondary role, further reinforcing Bitcoin's positioning as a macro-financial asset rather than a transaction-driven network.
At the Layer 1 (L1) level, 2025 showed that mere activity volume is not a reliable indicator of economic relevance, with many networks failing to translate usage into fees, value capture, or sustained token performance. Meanwhile, the L1 landscape continued to concentrate on a few leading networks. Ethereum maintained its dominance in developer activity, decentralized finance (DeFi) liquidity, and total value, but its base-layer execution footprint and rollup-driven fee compression dragged down its performance relative to BTC. Conversely, Solana maintained high trading volume and daily active users, significantly expanded stablecoin supply, generated meaningful protocol revenue even after speculative activity normalized, and gained US spot ETF approval, further enhancing institutional accessibility. BNB Chain, leveraging mainstream market narratives and a strong retail trading foundation, drove on-chain spot and derivatives activity, large stablecoin settlement flows, and real-world asset (RWA) deployments, making BNB the best-performing major crypto asset. The key signal for 2025 is that L1 differentiation will increasingly depend on the ability to monetize recurring flows (transactions, payments, or institutional settlements) rather than simply maximizing the original transaction volume.
Ethereum's Layer 2 (L2) ecosystem handled over 90% of Ethereum-related transaction execution in 2025, thanks to protocol upgrades that increased blob capacity and reduced data availability (DA) costs. As execution migrates off-chain, a key focus is whether this scale translates into sustained usage, fee generation, and economic alignment with the base layer. From this perspective, results are significantly divergent: activity, liquidity, and fee generation are concentrated on a few optimistic rollups (such as Base and Arbitrum) and application-specific chains with clear use cases and excellent user experiences, while usage on many other chains has plummeted after incentives wear off. Zero-knowledge (ZK) rollups continue to improve in prover efficiency and decentralization milestones, but still lag behind optimistic rollups by an order of magnitude in total value locked (TVL) and fee generation. Fragmentation among more than 100 rollups, diminishing incentives, and uneven decentralization of sequencers remain major constraints.
In 2025, DeFi took another step towards "structured institutionalization," focusing on capital efficiency and compliance. TVL stabilized at $124.4 billion, with a significant shift in capital composition towards stablecoins and interest-bearing assets rather than inflationary tokens. A historic milestone was RWA TVL ($17 billion) surpassing DEXs, driven by the adoption of tokenized government bonds and stocks. Simultaneously, the US GENIUS Act provided regulatory clarity for stablecoins, pushing their market capitalization past $307 billion and establishing their central role as a global settlement infrastructure. Functionally, DeFi matured into a cash-flow-driven industry. Protocol revenue surged to $16.2 billion, comparable to major traditional financial giants, transforming governance tokens into productive "blue-chip" assets. On-chain execution also dominated, with spot DEX and CEX trading volumes peaking at nearly 20%.
2025 marked a breakthrough year for stablecoins, propelling them into the mainstream. Total market capitalization surged nearly 50%, exceeding $305 billion, thanks to the landmark regulatory clarity and institutional entry brought about by the GENIUS Act. Average daily trading volume soared 26% to $3.54 trillion—far surpassing Visa's $1.34 trillion—demonstrating stablecoins' superiority in fast, borderless payments. This momentum was fueled by a new wave of heavyweight players: six new stablecoins (BUIDL, PYUSD, RLUSD, USD1, USDf, and USDtB) each surpassed the $1 billion market capitalization threshold, bringing new competition and real-world utility. These developments collectively laid the foundation for the continued expansion of stablecoins in payments, savings, and fintech use cases.
Consumer crypto is entering a decisive era: blockchain infrastructure has matured, and the focus has decisively shifted to real-world applications and seamless execution. Leading this transformation are new banks and fintech platforms—from Web2 giants to Web3 native projects—rapidly evolving into full-fledged banking services built on a blockchain track. While the enthusiasm for crypto gaming and social applications cooled this year, the deep integration of blockchain with global payments and fintech has laid a crucial foundation for a new generation of truly native networks designed from the outset around transparency and verifiability. As the industry shifts from infrastructure building to application-driven growth, its core mission is also evolving: from decentralization for decentralization's sake to consciously designing trustworthy, verifiable systems to inspire confidence in consumers and institutions.
In 2025, cutting-edge technologies will focus on AI agents, on-chain payments, and decentralized coordination of real-world infrastructure. The most substantial progress will be in agent payments achieving internet-scale availability via the HTTP native settlement standard (Revival 402 "Payment Required" path), enabling pay-per-use models for APIs, data, and automated workflows. By the end of the year, this track has processed over 100 million payments, with a cumulative transaction volume exceeding $30 million and over 1 million daily transactions, with agents driving over 90% of the traffic. Meanwhile, Decentralized Physical AI (DePAI) will gain attention as an extension of DePIN to coordinate autonomous machines, but progress in 2025 will be more constrained by data quality, the simulation-to-reality gap, capital intensity, and security and regulatory requirements than by token design. In contrast, DeFAI and DeSci remain in the exploratory stage, with limited evidence of sustainable economic output compared to agent-native payments and early machine economic use cases.
Institutional adoption is characterized by embedding crypto into core financial workflows, rather than simply accessing it through price exposure. Banks are moving closer to mainstream crypto-backed lending, indicating greater acceptance of BTC (and selectively ETH) as financial-grade collateral within custody and compliance frameworks. Meanwhile, the continued expansion of regulated crypto ETFs in both breadth and structure reinforces their position as the preferred access channel for institutions. Tokenized money market funds are emerging as a trusted RWA tokenization use case, gaining traction as on-chain cash equivalents due to faster settlement, better collateral liquidity, and auditability. Simultaneously, enterprise digital asset treasury (DATs) are expanding rapidly, but sustainability pressures are becoming apparent in 2025: leveraged treasury instruments are underperforming simple interest-bearing ETF alternatives—emphasizing a shift towards infrastructure and yield-driven adoption rather than mere asset accumulation.
Global crypto regulation is maturing along a divergent but complementary path: the US is advancing innovation through the GENIUS Act (July) and establishing the first federal stablecoin framework; Europe is implementing the strictly licensed MiCA; Hong Kong is consolidating its hub status through stablecoin regulations and tax incentives; and Singapore is strengthening high standards through stricter compliance and licensing rules (June). Internationally, commitments to the OECD Crypto Asset Reporting Framework (CARF) are accelerating, laying the foundation for standardized tax transparency and cross-border information exchange.
Looking ahead to 2026, we are particularly excited about several key themes and anticipate significant progress in these areas throughout the year. These themes encompass multiple narratives and sectors, including the macro environment and Bitcoin, institutional adoption, policy and regulation, stablecoins, tokenization, decentralized trading, and prediction markets.
