2025 was a year of milestone achievements alongside differing market performance for crypto. Total market capitalization surpassed US$4T for the first time and Bitcoin (BTC) reached a new all-time high (ATH), reflecting continued institutional adoption, regulatory progress – particularly around stablecoins – and the expansion of regulated investment products. At the same time, heightened macroeconomic uncertainty driven by monetary policy, trade tensions, and geopolitical risks dominated market behavior, leading to sharp price swings and repeated risk-off episodes. This drove a wide intra-year trading range of roughly 76%, with total market value swinging between ~US$2.4T and ~US$4.2T. Despite structural progress in market access and infrastructure, crypto markets ended the year down ~7.9%, underscoring that price formation in 2025 was increasingly shaped by macro conditions and traditional financial cycles rather than crypto-native adoption alone.
From a macro viewpoint, the year was defined by "data fog" and volatility, as markets navigated a new U.S. administration, the "Liberation Day" tariff shock, and a government shutdown that obscured economic signals. While Artificial Intelligence (AI) speculation and the OBBBA fiscal bill drove BTC to new highs in early H2, the market ended 2025 with crypto decoupling from rebounding traditional assets due to regulatory delays. However, the outlook for 2026 signals a definitive "risk reboot" driven by a "policy triumvirate": synchronized global monetary easing, substantial fiscal stimulus via cash/tax refunds, and a wave of deregulation. This shift promises to replace retail-driven speculation with institutional flows, positioning crypto for a liquidity-fueled expansion supported by the potential for a U.S. Strategic BTC Reserve.
Bitcoin showed a clear divergence between structural market-level strength and base layer economic activity. BTC reached new ATHs during the year but ended modestly lower, underperforming gold and most major equity indices, while maintaining a market capitalization near ~US$1.8T and sustaining ~58–60% market dominance. Capital concentration into BTC intensified despite softer price performance: U.S. spot ETFs accumulated over US$21B in net inflows, and corporate holdings surpassed 1.1M BTC, equivalent to ~5.5% of total supply. Network security continued to strengthen, with hash rate exceeding 1 ZH/s and mining difficulty rising ~36% year-on-year (YoY), signaling sustained miner investment. In contrast, base layer activity softened: active addresses declined ~16% YoY, transaction counts remained below prior cycle peaks, and speculative token activity appeared only in short, non-persistent bursts. The combined signal is that Bitcoin’s liquidity, price formation, and demand increasingly flowed through off-chain financial channels and holding behaviour, while the base layer played a secondary role, reinforcing Bitcoin’s position as a macro-financial asset rather than a transaction-led network.
Across Layer 1s (L1s), the year showed that activity alone was not a reliable indicator of economic relevance, with many networks failing to convert usage into fees, value capture, or sustained token performance. Separately, the L1 landscape continued to consolidate around a small number of leading networks. Ethereum remained dominant by developer activity, Decentralized Finance (DeFi) liquidity, and aggregate value, but its base layer execution footprint and rollup-driven fee compression weighed on ETH relative performance versus BTC. In contrast, Solana sustained high transaction volumes and daily active users, materially expanded stablecoin supply, generated meaningful protocol revenue even after speculative activity normalized, and secured U.S. spot ETF approval, reinforcing institutional accessibility. BNB Chain capitalized on prevailing market narratives and its strong retail transaction base to drive high on-chain spot and derivatives activity, large stablecoin settlement flows, and real-world asset (RWA) deployments, with BNB emerging as the best-performing major crypto asset. A key signal from 2025 is that L1 differentiation increasingly hinged on the ability to monetize recurring flows – trading, payments, or institutional settlement – rather than simply maximizing raw transaction counts.
Ethereum’s Layer 2 (L2) ecosystem accounted for over 90% of Ethereum-related transaction execution in 2025, supported by protocol upgrades that expanded blob capacity and lowered data availability (DA) costs. As execution migrated off-chain, the key focus was whether this scale could translate into sustained usage, fee generation, and economic alignment with the base layer. Under this lens, outcomes diverged sharply: activity, liquidity, and fee generation concentrated among a small number of optimistic rollups, notably Base and Arbitrum, as well as select app-specific chains with clear use cases and strong UX, while many others experienced sharp declines in usage once incentives faded. Zero-knowledge (ZK) rollups continued to make progress on prover efficiency and decentralization milestones but remained an order of magnitude behind optimistic rollups in total value locked (TVL) and fee generation. Fragmentation across more than 100 rollups, diminishing incentive effectiveness, and uneven sequencer decentralization remain among the binding constraints.
In 2025, DeFi took one more step in transitioning to "structural institutionalization," focusing on capital efficiency and compliance. TVL stabilized at US$124.4B, with capital composition shifting significantly toward stablecoins and yield-bearing assets rather than inflationary tokens. A historic milestone occurred as RWA TVL (US$17B) surpassed DEXs, driven by the adoption of tokenized treasuries and equities. Simultaneously, the U.S. GENIUS Act provided regulatory clarity for stablecoins, propelling their market cap over US$307B and establishing them as essential global settlement infrastructure. Functionally, DeFi matured into a cash-flow powerhouse. Protocol revenue surged to US$16.2B, comparable to major TradFi institutions, turning governance tokens into productive "blue chip" assets. On-chain execution also gained dominance, with DEX-to-CEX spot trading ratios peaking at nearly 20%.
2025 marked the breakthrough year when stablecoins went mainstream. Total market capitalization surged nearly 50% to over US$305B, fueled by landmark regulatory clarity from the GENIUS Act and institutional entry. Daily transaction volumes soared 26% to an average US$3.54T – dwarfing Visa's US$1.34T and proving stablecoins' superiority for fast, borderless payments. The momentum came from a wave of new heavyweights: six new stablecoins (BUIDL, PYUSD, RLUSD, USD1, USDf, and USDtB) each crossed the US$1B market cap threshold, bringing fresh competition and real-world utility. Together, these developments set the stage for sustained stablecoin expansion across payments, savings, and fintech use cases.
Consumer crypto entered a defining era: blockchain infrastructure reached maturity, and the focus shifted decisively toward real-world applications and seamless execution. Leading this transition were neobanks and fintech platforms–both Web2 giants and Web3 natives–that are quickly evolving into full-fledged, bank-like services built on blockchain rails. While enthusiasm for crypto gaming and social apps cooled during the year, deeper integration of blockchain into global payments and fintech laid critical groundwork for a new wave of truly native networks to emerge in these sectors, designed from the ground up around transparency and verifiability. As the industry pivots from infrastructure-building to application-driven growth, its core mission is evolving: moving beyond decentralization for its own sake toward the deliberate design of trustworthy, verifiable systems that inspire confidence in both consumers and institutions alike.
Frontier Tech in 2025 focused on the convergence of AI agents, on-chain payments, and decentralized coordination of real-world infrastructure. The most tangible advance was agentic payments becoming usable at internet scale via an HTTP-native settlement standard (reviving the 402 “Payment Required” path), enabling pay-per-call monetization for APIs, data, and automated workflows; by year-end, this rail had processed 100M+ payments, surpassed ~US$30M in cumulative volume, sustained >1M daily transactions, and saw agents drive over 90% of flows. In parallel, decentralized physical AI (DePAI) gained traction as an extension of DePIN toward coordinating autonomous machines, though progress in 2025 was constrained less by token design and more by data quality, sim-to-real gaps, capital intensity, and safety and regulatory requirements. By comparison, DeFAI and DeSci remained exploratory, with limited evidence of durable economic output relative to agent-native payments and early machine-economy use cases.
Institutional adoption was defined by crypto being embedded into core financial workflows rather than accessed purely through price exposure. Banks moved closer to mainstream crypto-backed lending, signaling greater acceptance of BTC (and selectively ETH) as finance-grade collateral within custody and compliance frameworks, while regulated crypto ETFs expanded in breadth and structure, reinforcing ETFs as the preferred institutional access route. Tokenized money market funds emerged as a credible RWA tokenization use case, gaining traction as on-chain cash equivalents due to faster settlement, collateral mobility, and auditability. At the same time, corporate digital asset treasuries (DATs) scaled sharply in footprint, but 2025 highlighted growing sustainability pressure as leveraged treasury vehicles underperformed simpler, yield-bearing ETF alternatives – underscoring a shift toward infrastructure- and yield-driven adoption over pure asset accumulation.
Global crypto regulation matured along divergent yet complementary paths: the U.S. advanced innovation through the GENIUS Act (July), establishing the first federal stablecoin framework; Europe implemented MiCA with rigorous licensing; Hong Kong solidified its hub status via the Stablecoin Ordinance and supportive tax incentives; Singapore reinforced high standards with stricter compliance and licensing rules (June). Internationally, commitments to the OECD's Crypto-Asset Reporting Framework (CARF) accelerated, setting the stage for standardized tax transparency and cross-border information exchange.
Moving into 2026, several key themes are particularly exciting to us, and we anticipate significant progress in these areas throughout the year. These themes span various narratives and sectors, such as those related to the macro environment and Bitcoin, institutional adoption, policy and regulation, stablecoins, tokenization, decentralized trading, prediction markets and more.
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