The cryptocurrency market in 2025 has been quite volatile. The total crypto market capitalization for the year first surpassed $4 trillion, though it experienced significant fluctuations and ultimately declined by about 7.9%. Bitcoin's performance is noteworthy—it hit new highs but retreated by the end of the year, with a market cap stabilizing around $1.8 trillion. Overall, it did not outperform gold and the US stock market.
However, a clear change this year is the continuous influx of institutional funds. The performance of ETFs is the most direct indicator—annual net inflows exceeded $21 billion, reflecting increasing recognition of crypto assets by traditional finance. The growth of stablecoins has also been rapid, with a market cap surpassing $305 billion, and daily trading volume reaching $3.54 trillion.
Interestingly, the revenue from DeFi protocols is noteworthy. In 2025, the annual revenue of DeFi protocols reached $16.2 billion, setting a new record. Even more interesting is that the TVL of RWA (Real-World Asset on-chain) surpassed that of DEXs for the first time, reaching $17 billion. This indicates that on-chain finance is no longer just about decentralized trading; the trend of bringing real-world assets onto the blockchain is becoming increasingly evident.
The competition among L1s mainly focuses on protocol revenue, while L2s face increasing fragmentation issues. Looking ahead to 2026, if loose monetary policies, fiscal stimulus, and regulatory easing work together, they could reignite market risk appetite, with institutional funds potentially leading a new wave of growth. On the regulatory front, policy frameworks in the US, Europe, and Asia are gradually becoming clearer.