2025 will be a landmark year for the crypto industry, but also a year of significant market differentiation.
On the one hand, the total market capitalization of the crypto market has exceeded $4 trillion for the first time, Bitcoin has hit a new all-time high, institutional participation continues to deepen, the regulatory environment—especially policies related to stablecoins—has made substantial progress, and compliant investment tools are becoming increasingly abundant. All of these indicate that crypto assets are becoming more deeply integrated into the mainstream financial system.
On the other hand, fluctuating monetary policies, escalating trade frictions, and heightened geopolitical risks exacerbated macroeconomic uncertainty, causing the market to frequently enter "risk-averse mode" and significantly increase price volatility. This resulted in the total market capitalization of crypto assets fluctuating wildly between $2.4 trillion and $4.2 trillion , a range of nearly 76% . Despite continued improvements in industry infrastructure and the institutional environment, the crypto market still recorded a decline of approximately 7.9% for the year.
The core signal behind this is that by 2025, the price formation logic of crypto assets will be significantly more driven by the macroeconomy and traditional financial cycles, rather than simply determined by the adoption pace of the crypto industry itself.
Macroeconomic Environment: A Year of Fluctuations Amidst a Data Fog
From a macro perspective, 2025 can be defined as a year of "data fog" and high volatility. The market experienced a series of events, including the inauguration of a new US administration, the impact of "Liberation Day" tariffs, and a temporary government shutdown, significantly reducing the readability of macro data. Although speculative sentiment related to artificial intelligence and the OBBBA fiscal bill (a large-scale comprehensive fiscal bill passed by the US Congress in 2025) propelled Bitcoin to new highs at the beginning of the second half of the year, the slower-than-expected pace of regulatory progress led to a significant decoupling of crypto assets from the recovery of traditional risk assets at the end of the year.
However, the outlook for 2026 points to a clear "risk restart," driven by a "policy trio": globally synchronized monetary easing, massive fiscal stimulus through cash rebates and tax cuts, and a wave of regulatory deregulation. This combination is expected to replace retail-driven speculation with institutional inflows and, supported by a potential US strategic Bitcoin reserve, usher in a liquidity-driven expansion cycle for the crypto market.
Bitcoin: The trend of macro assetization is further strengthened.
Bitcoin exhibited a clear divergence between structural market strength and underlying economic activity in 2025. Despite BTC hitting new all-time highs multiple times throughout the year, its closing price declined slightly, underperforming gold and most major stock indices; however, its market capitalization remained stable at approximately $1.8 trillion, with its market share maintaining between 58% and 60%.
Despite weak price performance, the trend of funds concentrating on BTC has further intensified . US spot ETFs have seen net inflows exceeding $21 billion, with enterprise-level holdings surpassing 1.1 million BTC, representing approximately 5.5% of the total supply. Network security continues to improve: the network hashrate has exceeded 1 ZH/s, and mining difficulty has increased by approximately 36% year-on-year, indicating that miners' investment intentions remain strong.
In contrast, on-chain activity at the Bitcoin base layer has slowed: the number of active addresses has decreased by approximately 16% year-over-year, the number of transactions is lower than previous cyclical peaks, and speculative token activity is only appearing in a brief and unsustainable form. Overall, Bitcoin's liquidity, price formation, and demand are increasingly being realized through off-chain financial channels and long-term holding behavior , while the base layer plays a more auxiliary role. This further solidifies Bitcoin's position as a macro-financial asset rather than a transactional network.
Layer 1: Monetization determines long-term value.
At the L1 level, 2025 clearly demonstrated that "activity" itself is not equivalent to economic relevance . Many networks failed to translate user engagement into fees, value capture, or sustained token performance. Meanwhile, the L1 landscape continued to concentrate on a few leading public chains.
- Ethereum maintains its dominance in developer activity, DeFi liquidity, and overall value, but the offshoring of the execution layer and the fee compression brought about by Rollups have caused ETH to consistently lag behind BTC in relative performance. In contrast...
- Solana , while maintaining high trading volume and daily active users, has significantly expanded the supply of stablecoins, generating substantial protocol revenue even after speculative fervor subsided. It has also successfully obtained approval for a US spot ETF, significantly improving institutional accessibility.
- BNB Chain leverages its strong retail trading foundation and market narrative to drive on-chain spot, derivatives trading, and stablecoin settlement traffic, while actively developing RWA, making BNB the strongest performing mainstream asset in 2025.
The key signal for 2025 is that L1 differentiation will increasingly depend on its ability to monetize recurring cash flows (transactions, payments, or institutional settlements) rather than simply maximizing the number of transactions.
Ethereum L2: Scale achieved, differentiation is accelerating.
In 2025, the Ethereum Layer 2 network handled over 90% of Ethereum-related transaction execution, primarily due to the increased blob capacity and reduced data availability (DA) costs resulting from protocol upgrades. However, as execution migrates off-chain, the core issue remains: can this scale translate into sustained usage, fee revenue, and alignment with underlying economic incentives?
From this perspective, the results show a clear divergence: activity, liquidity, and transaction fees are mainly concentrated on a few optimistic Rollups (such as Base and Arbitrum) and some application chains with clear use cases and excellent user experience; while the usage of a large number of projects has declined sharply after the incentives faded.
While ZK Rollups continue to make progress in proof efficiency and decentralization, they still lag behind Optimistic Rollups by an order of magnitude in terms of TVL and transaction fee scale. Ecosystem fragmentation caused by more than a hundred Rollups, diminishing incentive marginal effects, and uneven progress in the decentralization of sorters remain limiting factors.
DeFi: Towards "Structural Institutionalization"
In 2025, DeFi took another step towards "structural institutionalization," with its core focus shifting to capital efficiency and compliance . TVL stabilized at $ 124.4 billion , and the capital structure clearly tilted towards stablecoins and interest-bearing assets rather than inflationary tokens.
A historic moment has occurred: RWA TVL ($17 billion) has surpassed DEX for the first time, primarily driven by tokenized Treasury bonds and stocks. Simultaneously, the U.S. GENIUS Act provided clear regulatory guidance for stablecoins, propelling their market capitalization past $307 billion and establishing them as a crucial global settlement infrastructure.
From a business model perspective, DeFi has become a mature cash flow system: protocol revenue has reached $16.2 billion, comparable to large traditional financial institutions, and governance tokens have gradually evolved into "crypto blue chips" with real yield. The proportion of on-chain transactions continues to increase, with the spot trading ratio between DEXs and CEXs once approaching 20% .
Stablecoins: The True Year of Mainstream Adoption
2025 marked a breakthrough year for stablecoins, propelling them into the mainstream. Benefiting from regulatory certainty and institutional participation brought about by the GENIUS Act, the total market capitalization of stablecoins increased by nearly 50% year-on-year, surpassing $305 billion . Daily transaction volume grew by 26% to $3.54 trillion, far exceeding Visa's $1.34 trillion, fully demonstrating the advantages of stablecoins in fast, borderless payments.
New heavyweight players are constantly emerging: six new stablecoins, including BUIDL, PYUSD, RLUSD, USD1, USDf, and USDtB, have all surpassed $1 billion in market capitalization , bringing new competition and real-world application scenarios to the market. These changes collectively lay the foundation for the continued expansion of stablecoins in payments, savings, and fintech.
Consumer-grade encryption: From infrastructure to applications
Consumer-grade crypto is entering a critical phase: blockchain infrastructure is maturing, and the industry's focus is clearly shifting towards real-world applications and seamless experiences . Leading this transformation are new types of banks and fintech platforms—whether Web2 giants or Web3 native projects—that are rapidly evolving into " bank-like services " built on the blockchain.
While the hype surrounding crypto games and social applications may cool somewhat by 2025, the deep integration of blockchain into global payments and fintech lays the foundation for the next wave of truly native application networks. During this phase, the industry's mission is also evolving: no longer merely pursuing decentralization itself, but consciously building trustworthy and verifiable systems to earn the trust of both consumers and institutions.
Cutting-edge technology: The intersection of AI Agents and on-chain payments
Cutting-edge technologies in 2025 will focus on AI Agents, on-chain payments, and decentralized coordination of real-world infrastructure . The most substantial progress will come from Agent payments: enabling pay-per-use for APIs, data, and automated processes through native HTTP settlement standards (re-enabling the 402 "Payment Required" path).
By the end of the year, the payment system had processed over 100 million transactions, with a cumulative transaction value exceeding $30 million and a daily transaction volume exceeding 1 million, of which more than 90% were driven by agents.
Meanwhile, decentralized physical AI ( DePAI ), as an extension of DePIN, is gaining popularity, but its development bottlenecks stem more from data quality, the gap between simulation and reality, capital intensity, and security and regulatory requirements than from token design itself. In contrast, DeFAI and DeSci are still in the exploratory stage and have not yet demonstrated sustainable economic output.
The mechanism is embedded, rather than simply open.
The core characteristic of institutional adoption is that crypto is embedded in core financial processes, rather than merely serving as a price exposure tool. Banks are gradually moving closer to mainstreaming crypto-secured loans, and the acceptance of BTC (and some ETH) as financial-grade collateral is increasing; compliant crypto ETFs continue to expand in breadth and structure, further solidifying ETFs' position as the preferred entry point for institutions.
Tokenized money market funds have emerged as a trusted use case for RWAs, considered an on-chain "cash equivalent" due to their faster settlement, collateral flexibility, and auditability. Meanwhile, the crypto asset treasury (DAT) has expanded rapidly, but data from 2025 also shows increasing sustainability pressures on this model as highly leveraged treasury instruments underperform simple, yield-generating ETFs. This reflects a shift in cryptocurrency development from simple asset accumulation to an infrastructure and yield-oriented model.
Global Regulation: Divergent but Converging
Global crypto regulation is maturing by 2025, but the paths are different and complementary: the United States passed the GENIUS Act (July), establishing the first federal-level stablecoin framework; Europe officially implemented MiCA and strengthened the licensing system; Hong Kong consolidated its crypto hub status through the Stablecoin Ordinance and tax incentives; and Singapore further raised compliance and licensing thresholds in June.
At the international level, countries are accelerating their commitments to the OECD Crypto Asset Reporting Framework (CARF), laying the foundation for tax transparency and cross-border information exchange.
Looking ahead to 2026
As we head into 2026, we have several key themes in particular to watch, and expect significant progress in these areas throughout the year. These themes span multiple narratives and tracks, including the macro environment and Bitcoin, institutional adoption, policy and regulation, stablecoins, tokenization, decentralized trading, and prediction markets.
