Even as crypto prices fell, trading hit record highs, proving investors stayed active during the market shock.
Stablecoins surged in 2025 as traders sought safety and liquidity while prices dropped and volatility stayed high.
Institutions kept buying crypto despite the dip, signaling long-term confidence even as Bitcoin lagged stocks and gold.
The crypto market faced a sudden shock in late 2025 as prices fell hard despite rapid growth underneath. CoinGecko Research followed the crypto market’s big drop across exchanges and institutions.
As per the report, investors everywhere reacted to wild price swings. Heavy events and increased adoption drove the market from policymakers, traders, and large players. Crypto finished 2025 with lower prices but wider use and stronger infrastructure.
Global crypto market capitalization sank precipitously in the fourth quarter of 2025, shedding 23.7% to close at $3.0 trillion. This fall marked crypto's first annual contraction since 2022. Nevertheless, the year started with exuberance.
Market capitalization briefly hit a record $4.4 trillion early in Q4. Then a historic $19 billion liquidation event struck on October 10. The selloff followed the U.S. announcement of 100% tariffs on China. Hence, prices tumbled into late November before stabilizing.
Additionally, trading activity surged despite falling prices. Average daily volume reached a yearly high of $161.8 billion. Volatility from liquidations fueled this spike. However, volumes cooled once prices moved sideways into December.
Stablecoins and Institutions Shape the Market
Besides price pressure, stablecoins delivered one of 2025’s strongest performances. The stablecoin market expanded 48.9% year-on-year. It reached a record $311.0 billion by year-end. This growth reflected rising demand for liquidity during turbulence. However, Ethena’s USDe suffered a rapid collapse. Its supply fell 57.3% after a Binance depeg. Confidence faded in high-yield looping strategies.
Meanwhile, PayPal’s PYUSD climbed into the top five stablecoins. Its supply grew 48.4% to $3.6 billion. Creator payouts on YouTube supported adoption. A roughly 4.25% yield through Spark Savings Vault also attracted users.
Moreover, institutional participation deepened through Digital Asset Treasury Companies. DATCos deployed at least $49.7 billion during 2025. They accumulated over 5% of total Bitcoin and Ethereum supply. However, Q4 buying slowed sharply. Falling crypto prices pushed DATCo valuations below net asset value. Consequently, firms prioritized share buybacks instead of accumulation.
Trading, Prediction Markets, and Asset Divergence
Prediction markets delivered explosive growth during 2025. Volumes jumped 302.7% to $63.5 billion. Kalshi overtook Polymarket in Q4 market share. Additionally, Opinion entered aggressively in November. Its December volume matched Kalshi’s $7 billion.
Perpetual trading also expanded rapidly. Centralized exchanges recorded $86.2 trillion in annual volume. That marked a new historical high. Decentralized perpetual exchanges grew even faster. Their volumes surged 346% year-on-year. Hence, DEXs now command 7.8% of perpetual trading.
However, traditional assets outperformed crypto. Gold surged 62.6% during 2025. U.S. equities also gained strongly. Bitcoin fell 6.4%, lagging most major assets.
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