Authors: Binance Research (Moulik Nagesh, Joshua Wong, Michael JJ, Asher Lin Jiayong)
2025 was a year of both milestone achievements and divergent market performance for the crypto industry. The total market capitalization of cryptocurrencies surpassed $4 trillion for the first time, with Bitcoin (BTC) reaching a new all-time high. This was driven by continued institutional investment, progress in regulatory policies—particularly in the stablecoin sector—and the expanding availability of compliant investment products. Simultaneously, macroeconomic uncertainties stemming from monetary policy adjustments, trade frictions, and geopolitical risks dominated market trends throughout the year, causing significant price volatility in crypto assets and recurring risk aversion. This resulted in a trading range of approximately 76% for cryptocurrencies throughout the year, with the total market capitalization fluctuating wildly between $2.4 trillion and $4.2 trillion. Despite structural breakthroughs in market access and infrastructure development, the cryptocurrency market ultimately declined by approximately 7.9% for the year.
This result highlights that in 2025, the pricing logic of crypto assets is increasingly influenced by the macroeconomic environment and traditional financial cycles, rather than simply determined by the industry's own application implementation progress. From a macro perspective, the key words for 2025 are "data fog" and volatility. The market experienced a series of events during that year, including the change of government in the United States, the impact of "Tariff Liberation Day," and the government shutdown, all of which severely disrupted the accuracy of economic signals. Although the artificial intelligence (AI) concept boom and the Debt Ceiling and Budget Act (OBBBA) propelled Bitcoin prices to new highs in the early second half of the year, by the end of 2025, due to delays in the implementation of regulatory policies, cryptocurrency trends decoupled from the rebound of traditional assets. However, the market outlook for 2026 foreshadows a clear "reboot of risky assets," driven by the "three pillars of policy": globally synchronized monetary easing policies, large-scale fiscal stimulus mainly through cash handouts and tax rebates, and a new wave of regulatory deregulation. This shift is expected to drive the market's funding structure from being dominated by retail speculators to being dominated by institutional funds. Meanwhile, the potential implementation of the US Bitcoin strategic reserve will inject liquidity into the cryptocurrency market, helping the industry usher in a new round of expansion. The market performance of Bitcoin exhibits a significant structural divergence: the level of capital activity at the market level is at odds with the economic activity on the underlying blockchain. Although Bitcoin hit a new all-time high this year, its closing price fell slightly at the end of the year, underperforming gold and most major stock indices. However, its market capitalization remained stable at around $1.8 trillion, with its market dominance maintained between 58% and 60%. Even with weak price performance, the trend of funds concentrating on Bitcoin is intensifying: US spot ETFs saw net inflows of over $21 billion, and corporate holdings exceeded 1.1 million BTC, accounting for 5.5% of the total Bitcoin supply. The network security of Bitcoin continues to strengthen, with peak hashrate exceeding 1 ZH/second and mining difficulty increasing by approximately 36% year-on-year, data confirming miners' long-term investment confidence. In contrast, Bitcoin's on-chain activity has weakened: the number of active addresses decreased by approximately 16% year-over-year, the number of transactions failed to surpass the peak of the previous bull market, and speculative token trading only exhibited brief, non-sustainable pulse-like price movements. These signals collectively indicate that Bitcoin's liquidity supply, pricing mechanism, and market demand are increasingly being realized through off-chain financial channels and long-term holding behavior, with the underlying public chain playing only a secondary role. This trend further solidifies Bitcoin's positioning as a macro-financial asset, rather than a network centered on transaction functionality. In the public chain (L1) sector, market practice in 2025 proved that simple on-chain activity is not a reliable indicator of its economic value—many public chains failed to convert user traffic into transaction fee revenue, value capture capabilities, and sustained positive token performance. Meanwhile, the market structure of the public chain sector continues to concentrate on a few leading projects. Ethereum maintains its dominant position due to its active developer ecosystem, decentralized finance (DeFi) liquidity, and total asset value. However, its relative returns lag behind Bitcoin due to the shrinking transaction capacity of its underlying chain and the fee compression effect caused by Layer 2 networks. Solana, on the other hand, maintained high transaction throughput and daily active user scale throughout the year, achieving substantial growth in stablecoin issuance. Even after the speculative frenzy subsided, it still generated considerable protocol revenue and successfully obtained approval for a US spot ETF, further enhancing institutional accessibility. BNB Chain, leveraging market narratives and a large retail trading base, drove significant growth in on-chain spot and derivatives trading, stablecoin settlement volume, and Real-World Asset (RWA) deployments. Its native token, BNB, became the best-performing mainstream crypto asset of the year. The core lesson from the public blockchain landscape in 2025 is that the competitive advantage of public blockchains increasingly depends on their ability to monetize continuous cash flows—such as transactions, payments, or institutional settlements—rather than simply maximizing the number of transactions. In 2025, the Ethereum Layer 2 (L2) network ecosystem handled over 90% of Ethereum-based transactions. This achievement benefited from the increased block space resulting from protocol upgrades and the reduction in data availability (DA) costs. As transaction execution functions migrate off-chain, the core issue of industry focus shifted to whether the scale effect of Layer 2 networks could translate into sustained user stickiness, transaction fee revenue, and economic synergy with the underlying public chains. In reality, the Layer 2 network ecosystem exhibits significant differentiation: transaction volume, liquidity, and transaction fee revenue are highly concentrated in a few optimistic rolling networks, represented by Base and Arbitrum; meanwhile, some dedicated application chains with clear application scenarios and superior user experiences also performed exceptionally well. Most other Layer 2 network projects experienced a precipitous drop in user activity after the incentive policies were withdrawn. Zero-knowledge (ZK) rolling networks have made continuous progress in proof efficiency and decentralization, but still lag behind optimistic rolling networks by an order of magnitude in terms of total value locked (TVL) and transaction fee revenue. Currently, the core constraints facing the Layer 2 network sector include: market fragmentation caused by over a hundred rolling networks, diminishing marginal utility of incentive mechanisms, and uneven decentralization of sorters. In 2025, the DeFi industry took another crucial step towards "structural institutionalization," shifting its focus to improving capital efficiency and compliance. The total value locked in the industry stabilized at $124.4 billion, with a significant shift in its capital composition. The proportion of stablecoins and interest-bearing assets increased substantially, while the proportion of inflationary tokens continued to decline. That year, the total value locked in real-world assets (RWA) reached $17 billion, historically surpassing decentralized exchanges (DEXs), driven by the widespread adoption of tokenized government bonds and stocks. Simultaneously, the U.S. Genius Act provided a clear regulatory framework for stablecoins, pushing the total market capitalization of stablecoins past $307 billion, officially making them a core global settlement infrastructure. Functionally, decentralized finance (DeFi) has evolved into a cash flow creation giant, with annual protocol revenue soaring to $16.2 billion, comparable to mainstream traditional financial institutions. Governance tokens have thus transformed into "blue-chip assets" with stable returns. The dominance of on-chain transactions has been further strengthened, with the peak share of spot trading volume on decentralized and centralized exchanges approaching 20%. 2025 can be considered a "breakthrough year for mainstreaming" for stablecoins. Driven by the landmark regulatory clarity brought by the GENIUS Act and the entry of institutional funds, the total market capitalization of stablecoins surged by nearly 50%, exceeding $305 billion. Daily trading volume of stablecoins soared by 26% to $3.54 trillion, a figure far exceeding Visa's $1.34 trillion, fully demonstrating the superiority of stablecoins in the field of high-speed cross-border payments. The industry's growth is driven by a number of emerging leading projects: six new stablecoins—BUIDL, PYUSD, RLUSD, USD1, USDf, and USDtB—each with a market capitalization exceeding $1 billion, have brought a new competitive landscape and real-world application scenarios to the market. These developments have laid a solid foundation for the continued expansion of stablecoins in areas such as payments, savings, and fintech. Consumer-grade crypto applications are entering a critical development phase: blockchain infrastructure is maturing, and the industry's focus is shifting from technological research and development to real-world application implementation and user experience optimization. Leading this transformation are various digital banks and fintech platforms—both Web2 giants and native Web3 companies—that are rapidly evolving into full-featured banking service providers based on blockchain technology. Although the market enthusiasm for crypto games and social applications has cooled somewhat this year, the deep integration of blockchain technology with the global payments and fintech industries has laid a crucial foundation for the emergence of a new generation of native networks in these sectors. These new networks will be designed around transparency and verifiability in their underlying architecture. As the industry's focus shifts from infrastructure construction to application-driven growth, its core mission is also evolving: from simply pursuing decentralization to meticulously building systems that combine credibility and verifiability, thereby gaining the trust of both consumers and institutional users. In 2025, cutting-edge technology development focused on the integrated innovation of three major technologies: AI agents, on-chain payments, and decentralized collaboration of real-world infrastructure. The most groundbreaking advancement was the realization of internet-scale application of an agent payment system based on the HTTP native settlement standard (which reactivated the functionality of the HTTP 402 "Payment Request" response code), providing a pay-per-use monetization model for application programming interfaces (APIs), data services, and automated workflows. By the end of the year, the payment network had processed over 100 million transactions, with a cumulative transaction volume exceeding $30 million, and daily active transactions consistently exceeding 1 million, with over 90% of transactions initiated by agents. Meanwhile, Decentralized Entity Artificial Intelligence (DePAI), an extension of the Decentralized Physical Infrastructure Network (DePIN), is emerging, aiming to achieve collaborative scheduling of autonomous machines. However, the bottleneck for development in this field in 2025 is not the design of token economic models, but rather limitations imposed by data quality, the gap between simulation environments and real-world scenarios, high capital investment thresholds, and security and regulatory compliance requirements. In contrast, DeFAI and DeSci are still in the exploratory stage and have not yet demonstrated sustainable economic output capabilities compared to native payments by intelligent agents and early machine economic applications. The core characteristic of institutional cryptocurrency applications in 2025 is that crypto assets are no longer simply used as price exposure tools, but are deeply integrated into the core financial business processes of institutions. Commercial banks are accelerating the development of crypto asset-backed lending businesses, signifying that Bitcoin (and selected Ethereum) are being increasingly recognized by institutions as financial-grade collateral under custody and compliance frameworks. At the same time, the variety and structure of compliant cryptocurrency ETFs continue to expand, further solidifying ETFs as the preferred channel for institutional investment in crypto assets. Tokenized money market funds have become a mature application scenario in the field of real-world asset tokenization. Leveraging their advantages of fast settlement, high collateral liquidity, and strong auditability, they have rapidly risen to become on-chain cash equivalents. Meanwhile, the scale of corporate digital asset vaults (DATs) has expanded significantly, but the market performance in 2025 also highlighted the sustainability pressures facing this sector: the returns of leveraged vault products were lower than those of interest-bearing ETFs with simpler structures. This phenomenon indicates that institutional crypto asset applications are shifting from simple asset accumulation to infrastructure and return-oriented deployments. Global cryptocurrency regulatory frameworks are gradually moving towards complementarity and synergy amidst differentiated development: the US promoted industry innovation through the GENIUS Act in July, establishing the first federal-level stablecoin regulatory framework; the EU formally implemented the Crypto Asset Market Regulation (MiCA), enacting a strict licensing system; Hong Kong, with its Stablecoin Ordinance and supporting tax incentives, consolidated its position as a crypto asset hub; and Singapore introduced stricter compliance and licensing rules in June, further raising industry entry standards. At the international level, the implementation of the OECD's Crypto Asset Reporting Framework (CARF) has accelerated across countries, laying a standardized foundation for global crypto asset tax transparency and cross-border information exchange. Looking ahead to 2026, the development prospects of several key sectors are highly promising, and we expect significant breakthroughs in these areas within the year. These themes cover multiple narrative directions and sub-sectors, including the macro environment and Bitcoin trends, institutional application implementation, policy and regulatory evolution, stablecoin innovation, asset tokenization, decentralized trading, and prediction markets.