Crypto Market 2025: Year-End Review & Expert Insights

[Ben Graham]

The 2025 crypto market review reveals a clear shift in how digital assets are now traded. Returns were driven primarily by ETF flows, macroeconomic liquidity conditions, regulatory clarity, and the concentration of network revenue at the application layer, rather than speculative narratives.

Drawing on verified industry data and expert commentary, this report explains what powered the rally, why the market reversed sharply in Q4, and which structural signals from 2025 are most likely to shape price action and capital flows in 2026.

Key Takeaways

• 2025 shifted crypto from hype to infrastructure, with ETFs and institutions setting the tone.
• The market briefly touched $4T, then cooled closer to $3T by year-end.
• Bitcoin hit ~$126,000, but two sharp corrections reminded everyone that leverage still runs the show.
• Apps captured most of the value in 2025, pulling in the bulk of network fees.
• Clearer rules brought bigger players in, turning compliance into a growth lever.
• Security remained a major concern, with fewer incidents overall but significantly higher losses when breaches did occur.

2025 Crypto Market Review: Summary

2025 delivered choppy price action but clear structural shifts. The total crypto market cap briefly neared $4 trillion in Q3 before cooling toward $3 trillion by Q4. Bitcoin still hit a new high near $126,000, as demand for Bitcoin ETFs absorbed supply, despite uneven altcoin performance and volatility returning in bursts.

The bigger story was where value accrued. App-layer platforms captured most fee revenue, while tokenization and stablecoins scaled under clearer rules. Security incidents were fewer, but losses were larger when breaches occurred. In this article, we spoke with industry leaders to uncover deeper insights into how the market truly evolved.

Source: State of Crypto 2025 by a16z

2025 looked like a handover. ETFs, institutional balance sheets, and app-layer revenue began to shape market leadership more than narratives did.

2025 Crypto Market at a Glance

• The total crypto market cap reached $4 trillion at the end of Q3 2025, but was around $3 trillion at the end of Q4.
• Bitcoin led the cycle again, peaking around $126,000 in early October, as spot ETFs attracted nearly $26 billion of net inflows during 2025.
• Revenue-generating apps quietly became winners. Platforms like Hyperliquid ($94.6M) and Pump ($34M) ranked among the top 30-day fee earners, demonstrating real business traction beyond just being tokens.
• Most altcoins failed to get their own season. Capital did not rotate deeply into the risk curve, unlike past cycles. Thus, leaving many high-beta names underperforming.
• Even Bitcoin experienced two brutal corrections, one in April (-30% to approximately $75,000) and another in November (-35% to approximately $81,000), which shook out late buyers.
• ETF flows pushed Bitcoin and Ethereum to start behaving like financial benchmarks rather than hype trades, with steady institutional inflows replacing retail mania.
• Value flowed decisively toward applications, with nearly 90% of all crypto fees generated at the app layer, while base blockchains captured less than 10%, highlighting a major shift in where economic power now sits.
• The broader economic backdrop appeared favorable for crypto, yet heavy leverage and frequent liquidations continued to shake out traders.

Three forces explain almost everything that happened in crypto in 2025: the normalization of ETFs, the rise of institutional balance sheets, and crypto’s tightening link to macro policy and liquidity. These drivers altered prices and changed what the market rewarded. More on this in the crypto market overview for 2025.

2025 Crypto Market Overview: From Speculation to Institutional Buying

The broader crypto ecosystem expanded in 2025. Separate industry research that tracks the cryptocurrency products and services market, meaning sector revenue rather than token prices, estimates growth from $2.48 billion in 2024 to above $3 billion in 2025. According to Research and Markets’ Cryptocurrency Market Report 2025, this represents a roughly 15–16% year-on-year increase.

Looking ahead, the report projects that the market is expected to reach $5.39 billion by 2029, equivalent to a 17.2% CAGR between 2025 and 2029.

Source: Research and Markets

By the end of 2025, crypto had moved decisively beyond hype-led trading, with institutional forces and broader macro trends shaping the market, according to executives 99Bitcoins spoke to.

Total Market Growth and Macro Backdrop

While the year included sharp rallies and equally sharp drawdowns, it was widely characterized as a period of structural maturation rather than a simple bull or bear market cycle.

Several contributors pointed to the market’s scale as evidence of this shift. Maksym Sakharov, Co-Founder and Group CEO of WeFi, noted that blockchain infrastructure handled up to 3,400 transactions per second, with stablecoins emerging as one of the most active segments. Sakharov told 99Bitcoins:

Stablecoins blew the roof with $46 trillion in nominal flows and monthly adjusted volumes hitting $1.25 trillion by the end of Q3 2025.

Sakharov also highlighted that mobile wallet users grew by around 20% year-on-year, reinforcing the view that crypto usage increasingly reflects real-world payments rather than pure speculation.

Source: Bitcoin Suisse

Market performance, however, was far from uniform. Jamie Elkaleh, CMO of Bitget Wallet, spoke to 99Bitcoins and described 2025 as a classic boom-and-shakeout year for crypto. He observed that market capitalization approached $4 trillion during Q1-Q3, supported by strong ETF-driven inflows and an Ethereum rally of more than 60%, before reversing sharply in Q4.

ETF Flows and the Rise of Macro-Driven Crypto

While the Bitcoin rally made headlines, the deeper shift was structural. ETF flows became the market’s new heartbeat. Instead of sentiment alone, allocation and redemption cycles began to show up directly in price action.

In Q4 of 2025, more than $1 trillion in market value was erased, as the Bitcoin price fell nearly 30% from its peak to below $90,000. Elkaleh explained:

This performance marked a year of highs followed by a bearish correction, lagging behind traditional assets like gold and bonds, reminding everyone that even in a more institutional era, this remains a high-beta corner of global markets.

Across responses, ETF flows, and regulatory clarity consistently emerged as the dominant drivers of market sentiment. Alexander Zahnd, interim CEO of Zilliqa, described 2025 as the first full year in which crypto operated in an ETF- and macro-led regime. The executive added:

The single biggest driver of market sentiment this year, in my view, was the combination of U.S. monetary policy repricing and ETF flows. Every change in the probability of a Fed cut, or a spike in ETF redemptions, showed up almost immediately in crypto prices.

Multiple executives also noted that regulated investment vehicles and digital asset treasury structures (DATs) had effectively institutionalized access to crypto and integrated it more closely with traditional financial markets.

Regulation, Stablecoins, and the New Infrastructure Cycle

Regulation played a central role in shaping confidence. Konstantins Vasilenko, Co-Founder and CBDO at Paybis, pointed to early-year policy shifts in the U.S., including the creation of a Strategic Bitcoin Reserve and the repeal of SAB 121, as key catalysts for renewed institutional inflows. Vasilenko told 99Bitcoins:

The Trump Administration delivering on promises to crypto within the first 100 days was the largest contributor to positive market sentiment.

At the same time, the EU’s crypto policy MiCA framework was widely cited as a contributor to improved clarity, particularly for euro-denominated stablecoins and tokenized products.

Winning Sectors: RWAs, Layer-1s, and Utility-Driven Networks

Sector performance mirrored this more selective market, with stablecoins and real-world asset (RWA) tokenization consistently standing out as top performers. Sakharov cited that stablecoin transaction volumes rose from around $32 trillion in 2024 to approximately $46 trillion in 2025, while Mamadou Kwidjim Toure, Founder and CEO of Ubuntu Tribe, and Elkaleh both highlighted RWAs as one of the fastest-growing segments, with tokenized Treasuries, credit, and commodities moving from concept to live products. Elkaleh estimated:

Tokenized RWAs grew by roughly 260% in 2025, making it one of the fastest-expanding segments in the ecosystem this year.

At the same time, capital became less forgiving. Zahnd noted that high-throughput Layer-1 networks and major altcoins such as Solana and XRP benefited from ecosystem growth, ETF interest, and legal clarity, while long-tail DeFi and memecoins de-rated quickly once liquidity tightened.

Jawad Ashraf, CEO of Vanar Chain, added that Ethereum and its Layer 2 ecosystem outperformed on fundamentals, with DeFi’s total value locked approaching $165 billion. This indicated increased usage in programmable, utility-driven networks.

Taken together, 2025 ended as a transitional year rather than a decisive cycle peak or trough. The market absorbed record institutional inflows and outflows, reacted sharply to macro and political signals, and increasingly rewarded real usage, regulatory alignment, and scalable infrastructure.

As Zahnd summarised, crypto moved away from euphoria and into a regime defined by policy, liquidity, and institutional decision-making. The executive told 99Bitcoins:

I’d describe 2025 as the year crypto moved from euphoria into a more mature, ETF- and macro-driven regime. We entered the year riding the momentum of spot ETFs and new all-time highs, but the second half has been about digestion: record ETF outflows from Bitcoin and Ethereum, rising macro uncertainty, and a shift from greed to persistent fear on sentiment gauges.

With macro sensitivity now unavoidable, Bitcoin became the cleanest expression of this new regime.

Bitcoin in 2025: The Institutional Era

Bitcoin’s market behavior in 2025 became increasingly defined by institutional capital flows rather than retail speculation.

Its price rose by about 700% from the 2022 low and reached a new high of nearly $126,000, increasing its total value to $2.48 trillion, according to the Glassnode × Fasanara Digital Assets Report 2025.

Bitcoin’s 2024-2025 Rally Was Driven by Heavy Realized Capital Inflows | Source: Glassnode × Fasanara Digital Assets Report 2025

The launch of spot Bitcoin ETFs marked a significant milestone, as it provided traditional financial players with sustained access to the market. The report noted that the launch sent up to $190 billion per month into Bitcoin at the peak. In total, more than $732 billion flowed into Bitcoin during this cycle, surpassing the total amount from all earlier cycles combined.

Industry players also broadly agreed that Bitcoin has entered a new phase, one where access, custody, and portfolio allocation matter more than narrative-driven momentum.

Institutional Demand and Market Structure

By the end of the year, 6.7 million BTC sat across ETFs, exchanges, and treasuries, according to Glassnode. The platform described 2025 as Bitcoin’s “institutional supply era”.

Bitcoin Treasury Holdings by Entity Type | Source: Glassnode Report

Jeremy Dreier, Managing Partner at GoMining Institutional, described institutional demand as the dominant structural force behind Bitcoin’s trajectory in 2025.

Spot ETFs, corporate treasuries, and regulated investment vehicles made Bitcoin easier to integrate into existing financial workflows, effectively turning BTC into an allocatable line item for registered investment advisors, private banks, and institutions.

Dreier emphasized that institutional allocators, once onboarded through legal and compliance frameworks, tend to be “sticky” holders rather than short-term traders. Dreier told 99Bitcoins:

The important part isn’t just the flows, it’s who is buying: RIAs, private banks, institutions, corporate treasuries. Those players don’t flip in and out every week.

The result was a structural removal of supply from the market that retail participation alone could not replicate. According to Alexander Zahnd, interim CEO of Zilliqa:

Institutional demand via spot ETFs and listed products remained the core structural driver of Bitcoin’s trajectory.

Even during periods of ETF outflows, he noted that the presence of regulated, liquid ETF vehicles allowed institutions to rebalance exposure rather than exit the asset class entirely, reinforcing Bitcoin’s role within diversified portfolios.

Zahnd also observed a growing, though more nuanced, trend of corporates treating Bitcoin as a treasury asset. While early enthusiasm cooled as some crypto-exposed equities underperformed, the broader shift toward balance-sheet allocation remained intact, underscoring Bitcoin’s transition from speculative trade to strategic asset.

Digital Asset Flow in Last Week of December 2025 | Source: CoinShares

That assessment was echoed by Mamadou Kwidjim Toure, who characterized institutional participation as transformational. He estimated that combined institutional and corporate inflows into Bitcoin exceeded $70 billion in 2025, compared with $30 billion the previous year and $5.7 billion four years prior. Thus, marking a decisive shift in Bitcoin’s demand base from crypto-native investors to macro portfolios.

Bitcoin’s Price Rally Closely Followed Large Spikes in Realized Capital Inflows | Source: Glassnode

These assessments reflect the trend but likely understate actual Bitcoin demand. To see how that capital showed up in practice, we now examine price performance and the key catalysts behind each leg.

Price Performance and Key Drivers

Market Cap

24h 7d 30d 1y All Time

Several executives described Bitcoin’s 2025 price action as occurring in two distinct phases. Jamie Elkaleh of Bitget Wallet, noted that Bitcoin rallied to new highs above $120,000 during the first three quarters of the year, supported by sustained ETF inflows, regulatory breakthroughs, and macro optimism.

That rally gave way to a sharp Q4 correction as liquidity tightened, risk sentiment turned defensive, and profit-taking accelerated.

Based on reports and data by Glassnode, we know that Bitcoin’s price performance in the current cycle has been powered mainly by the sheer scale of new money entering the market. A key factor has been the regulation of products, which has led to more widespread institutional participation.

Bitcoin Realized Cap Growth by Cycle (Data: Glassnode)

Bitcoin’s realized cap growth highlighted how capital has entered the market across different cycles, offering a clearer view of long-term investor conviction. This metric shows how each cycle has built on the last, reflecting Bitcoin’s increasing maturity and adoption.

Cycle Period	Realized Cap Increase
2011 – 2015	$4.4 Billion
2015 – 2018	$86 Billion
2018 – 2022	$388 Billion
2022 – 2025+	$732 Billion

Konstantins Vasilenko traced similar dynamics, highlighting Bitcoin’s rise from roughly $90,000 to above $126,000 by early October before a rapid sell-off tied to trade war fears, hawkish Federal Reserve signals, and record ETF outflows pushed prices below $82,000 by late November. Vasilenko told 99Bitcoins: 

By mid-year, billions poured into Bitcoin and Ethereum ETFs. The money came primarily from banks, funds, and corporate treasuries.

In his view, the rally was driven by pro-crypto policy momentum and institutional inflows, while the correction reflected how quickly confidence can reverse when liquidity conditions deteriorate.

From a market-structure perspective, Alexander Zahnd emphasized that ETF flows effectively became Bitcoin’s new macro indicator. Record outflows from U.S.-listed BTC and ETH ETFs in Q4 coincided with Bitcoin breaking key support levels around $98,000 and retesting the low $90,000 range, underscoring how closely price action had become tied to regulated capital movement.

Volatility: Lower Extremes, Sharper Macro Sensitivity

The Glassnode × Fasanara Digital Assets Report 2025 highlights that Bitcoin has become less volatile, with volatility decreasing from 84% to 43%, indicating it is evolving into a more stable, institutional asset.

Most executives agreed its volatility profile changed meaningfully in 2025. Vasilenko reported that Bitcoin’s 30-day realized volatility averaged around 38% through September, roughly half of 2024 levels and far below the 85% swings seen in 2021.

This moderation could mean deeper liquidity, ETF participation, and more systematic trading strategies, as per the industry players.

Zahnd described Bitcoin’s volatility profile in 2025 as structurally different from prior cycles. While volatility remained elevated in absolute terms, it became more institutionalized as deeper derivatives markets and ETFs absorbed shocks more efficiently. The interim executive, Zahnd, explained:

Volatility is still high in absolute terms, but it’s becoming more institutionalized. Over the last 12 months, 30-day annualised BTC volatility trended in the 30-45% range, meaningfully lower than in previous boom-bust cycles, but still above traditional assets.

Sharp price moves continued to occur around macro events and ETF flow shocks, but Zahnd noted that the growing presence of futures, options, and ETF liquidity helped smooth some of the extremes, reducing the frequency of sudden, disorderly crashes.

However, that stability proved conditional. The October flash crash and subsequent sell-off reintroduced sharp swings as market makers pulled back and liquidity thinned, reinforcing the view that Bitcoin now behaves more like a high-beta macro asset, capable of relative stability in normal conditions, but still prone to violent moves when risk-off dynamics dominate.

Productization of BTC

In 2025, Bitcoin was used in more ways than just holding it on the Bitcoin network. More users started using wrapped Bitcoin (WBTC), which is a 1:1 token version of BTC that runs on Ethereum and other smart-contract blockchains. This allows people to use their Bitcoin in DeFi apps to earn yield or provide liquidity without selling their BTC

WBTC expanded to other chains, such as Hedera, in 2025. It became fully tradable and is still backed 1:1 by real Bitcoin held by custodians on new networks.

At the same time, blockchain data showed that the top three Bitcoin bridges controlled about 32.7% of total bridged TVL, with around $18.2 billion in assets as of Q3 2025. This suggests that large amounts of Bitcoin were actively moving across chains based on CoinGecko Q3 2025 Crypto Industry Report.

Wrapped Bitcoin also started influencing how Bitcoin’s price is formed. MADOC study on wrapped token price discovery found that about 10% of Bitcoin price discovery now comes from wrapped BTC trading activity, showing that tokenized Bitcoin is no longer just a utility tool but an important part of how BTC markets work.

Wrapped Bitcoin Tracks BTC | Source: MADOC study

Dreier and Toure both highlighted spot ETFs and compliant tokenized BTC products as the fastest-growing segment, as they allowed institutions to gain exposure without operational complexity.

Derivatives became the workhorse of the Bitcoin market in the year. Meanwhile, futures, options, and basis trades enabled funds to generate yield and actively manage risk by leveraging Bitcoin’s volatility. While tokenized and wrapped Bitcoin still powered activity across Layer-1s and Layer-2s, Zahnd emphasized:

Tokenized and wrapped BTC on L1s and L2s continued to be used in DeFi, but I’d say that 2025 was more about trad-market rails than exotic on-chain wrappers.

While wrapped and tokenized BTC continued to matter in DeFi, Dreier noted that, in his view, the most under-discussed growth area was institutional yield products tied to Bitcoin mining infrastructure, which convert network activity into cash-flowing investment vehicles suitable for conservative capital.

Dominant Narrative Heading Into 2026

We have mentioned that Bitcoin is increasingly being viewed through an institutional lens. Dreier described BTC as a yield-generating reserve asset, where investors focus not just on holding it but on gaining exposure to the systems that produce it. Toure highlighted Bitcoin’s role as core collateral in a tokenized economy, while Vasilenko pointed to growing adoption by governments and corporations as the next major phase.

As Dreier put it,

We’re past the era where the only question is “Should I own Bitcoin?” For serious capital, the questions now are: “What percentage of our portfolio belongs in BTC? In what format – spot, ETF, fund, yield vehicle? Can we turn this from a dead asset on the balance sheet into a cash-flowing one?”

Looking ahead, Zahnd described Bitcoin’s main narrative as its rise as macro-level collateral within an ecosystem shaped by ETFs and corporate treasuries. He argued that Bitcoin is increasingly treated as a liquid, programmable reserve asset, positioned alongside Treasuries and gold, but with a higher sensitivity to shifts in policy, liquidity, and risk sentiment.

Together, these perspectives point to a clear shift in how Bitcoin is being treated going into 2026.

Bitcoin’s Product and Narrative Shift Heading Into 2026

The table below summarizes the main Bitcoin narratives from 2025 and how they translate into product behavior heading into 2026.

Narrative / Product Theme	What It Means in 2026	How Bitcoin Is Being Used
Yield-Bearing Bitcoin	BTC is no longer just held, it is structured to generate returns.	Exposure via mining-linked products, structured funds, infrastructure revenue vehicles.
Bitcoin as Reserve Asset	Bitcoin is treated like digital gold inside real portfolios.	Held as a strategic reserve alongside Treasuries and gold.
ETF-Driven Access	Institutions prefer regulated wrappers over native BTC.	Spot BTC ETFs, managed funds, listed investment vehicles.
Bitcoin as Macro Collateral	BTC functions as high-beta macro collateral in finance.	Used in treasury management, lending, derivatives and hedging strategies.
Treasury Allocation Strategy	Corporations treat BTC as a balance-sheet line item.	Direct BTC holdings, ETF exposure, long-term treasury allocation.
Tokenized Economy Backbone	Bitcoin becomes base collateral for tokenized assets.	Used to back RWAs, stablecoins, structured on-chain products.
Infrastructure Exposure	Investors buy into the systems that produce BTC.	Mining-linked yield funds, energy-to-Bitcoin investment products.
Programmable Reserve Asset	BTC is liquid, tradeable, and programmable across markets.	Wrapped BTC, bridges, on-chain collateral, structured yield products.
Portfolio Optimization Asset	Bitcoin is managed, not speculated on.	Allocated across spot, ETF, yield vehicles based on risk profiles.
Policy-Sensitive Macro Asset	BTC reacts directly to rates, liquidity and regulation.	Traded like a high-beta macro instrument alongside equities and bonds.

In 2025, Bitcoin was positioned less as an ideological outlier and more as a macro asset embedded within global financial systems. Volatile, policy-sensitive, but increasingly unavoidable. That shift is visible in price action and investor behavior. It is also reflected in how the Bitcoin network itself is being used and how value is now flowing across the ecosystem.

Bitcoin’s Network Fundamentals

According to the Bitcoin Suisse Outlook 2026 report, Bitcoin is no longer being used mainly for everyday trading or speculation. Instead, it is starting to behave like financial infrastructure, similar to how banks settle large payments behind the scenes.

The report shows that almost 90% of all crypto fees in 2025 were earned by applications, while the underlying blockchains earned less than 10%, which means most real activity and value creation is now happening on top of networks rather than directly on them.

This shift helps explain why Bitcoin’s role in 2025 moved away from enabling fast, low-cost transactions and toward functioning as a trusted settlement and collateral layer for the broader digital economy. Supporting this transition, Bitcoin’s hash rate continued to climb steadily, from around 800 EH/s to well above 1,100 EH/s, showing that miners kept adding capacity and confidence even during periods of sharp price pullbacks.

Bitcoin’s Hash Rate | CoinWarz

The brief dips around mid-year likely reflect short-term miner stress and periods of price weakness, but the strong recovery in the second half suggests miners upgraded hardware and scaled operations as confidence in long-term Bitcoin demand grew.

Overall, the trend signals a more industrial, institution-backed mining sector that treated 2025 not as a boom-and-bust cycle, but as a build year for network security.

Key Events That Shaped BTC’s Price Move

In April, BTC’s price dropped around 30% to nearly $75,000, followed by another 35% fall to about $81,000 in November.

While both declines looked severe on the surface, they pushed Bitcoin only into valuation zones normally seen in deep bear markets, yet the price still held above the critical $75K structural bull support, which the Bitcoin Suisse Outlook report highlights as the key level keeping the cycle healthy.

Here are some of the key events that shaped BTC’s price move:

• Approval and expansion of spot Bitcoin ETFs, driving large institutional inflows
• Bitcoin reaching a new all-time high near $126,000
• Sharp market corrections triggered by leverage unwinds and liquidations
• Rising U.S. interest rate uncertainty and shifting macroeconomic signals
• Increased regulatory clarity across major jurisdictions
• Growing adoption of Bitcoin as a treasury and reserve asset
• Sustained growth in Bitcoin hash rate despite price volatility
• Broader risk-off sentiment impacting crypto alongside traditional markets

Notably, the October-November sell-off was caused by a combination of short-term pressures, including sentiment shifts and the unwinding of leverage, despite broader macroeconomic conditions remaining supportive.

What stood out most was that Bitcoin closed the year with its long-term uptrend firmly intact, reinforcing the view among experts that the market is positioning for a highly asymmetric upside heading into 2026.

According to Zahnd, the dominant narrative for Bitcoin heading into 2026 is its growing role as a macro-linked reserve asset. He said:

Bitcoin as macro collateral in an ETF and treasury world. It’s increasingly treated as a liquid, programmable reserve asset that sits alongside Treasuries and gold but with its own, higher-beta response to policy, liquidity, and risk cycles.

As Bitcoin consolidated its role as the institutional anchor asset, attention quietly shifted to where activity was actually happening. A similar story played out across Ethereum and its Layer-2 ecosystem.

Ethereum & Layer-2s

2025 was a major year for Ethereum, as per a report by The Block. Here are some of the highlights:

• ETH price stayed quiet, but the protocol was busier than ever.
• The Ethereum Foundation went through a leadership reset to refocus on long-term goals.
• The Pectra upgrade in May introduced account abstraction and boosted validator and Layer-2 performance.
• Over 11,000 smart-account authorizations were created within a week of Pectra going live.
• Ethereum launched its “Trillion Dollar Security” push to make safety and user experience core priorities.
• The network raised its block gas limit to 60 million, improving throughput ahead of Fusaka.
• Privacy, interoperability, and rollup scaling became the main focus areas going into 2026.

According to Zahnd, 2025 was not a standout year for Ethereum relative to Bitcoin in price terms. The executive explained that Bitcoin retained its position as the primary institutional allocation, while Ethereum underperformed during risk-off phases when capital rotated toward simpler, more liquid exposures. Further adding,

Ethereum’s fundamentals quietly improved, driven by staking, L2 expansion and the continued growth of DeFi and RWAs on its rails.

Zahnd noted that staking participation, Layer-2 expansion, and the continued growth of DeFi and real-world asset activity on Ethereum rails helped reinforce its long-term positioning even if those improvements were not fully reflected in price performance.

In his words, 2025 was “not a spectacular year relative to BTC on a pure performance basis, but a solid year in terms of building the base.”

How Staking Played a Role?

Staking dynamics played a central role in shaping ETH’s market behavior. High staking penetration, alongside liquid staking and restaking products, made ETH behave more like a yield-bearing asset.

However, as yields compressed and risk appetite faded, flows increasingly favored protocols with clearer fee capture and lower perceived smart-contract risk.

While staking reduced free-float supply, Zahnd emphasized that short-term price action was still driven primarily by derivatives positioning and ETF flows, rather than Ethereum’s “ultra-sound money” narrative.

On the infrastructure side, Zahnd highlighted that no single upgrade defined Ethereum’s trajectory in 2025. Instead, a steady accumulation of improvements around costs, user experience, and security pushed more activity toward Layer-2 networks. Zahnd told 99Bitcoins’ team:

Different L2s led on different metrics, but Arbitrum and Base stood out in terms of consistent TVL, real usage and developer activity, with zk-rollups and newer L2s still in ‘build and iterate’ mode. Overall, 2025 was the year L2s became normal infrastructure rather than an experiment.

By the end of the year, L2s had shifted from experimentation to default infrastructure, with Ethereum mainnet increasingly reserved for settlement, high-value transactions, and base-layer DeFi.

Layer-2 2025 Roundup

2025 was the year Layer-2 finally stopped feeling like a “nice-to-have” and became more infrastructure-focused. Instead of just being used by crypto-natives, L2s started powering more enterprise systems. Here is how they quietly became the place where everyday blockchain activity now happens, based on research.

• Total Layer-2 TVL crossed $39.3 billion by November.
• L2 networks handled over 1.9 million transactions per day.
• Arbitrum dominated with about 51% market share and 1.37 million daily active wallets.
• Stablecoins powered the ecosystem, making up over 70% of all Layer-2 payments.
• Retail L2 users grew 42% year-on-year, driven by lower fees and easier wallets.
• Over 65% of new smart contracts were deployed directly on Layer-2 instead of the Ethereum mainnet.
• Blockchain gaming and micropayments pushed L2 transaction volumes up by 50%.
• Enterprises cut costs by 30-40% by moving workloads to private or permissioned Layer-2s.
• Bridging times dropped to under three minutes, making cross-chain transfers far smoother.

With Bitcoin acting as the macro barometer and Ethereum absorbing application growth, capital became far more selective across the rest of the market. Now let’s take a look at the broader narratives across markets.

Altcoins, Sectors & Narratives

According to Zahnd, four altcoin narratives stood out in 2025:

• High-throughput Layer-1s, particularly Solana, continued to attract inflows and real usage even during periods of ETF outflows from Bitcoin and Ethereum. Growth was driven by expanding DeFi ecosystems and high-velocity consumer applications.
• XRP’s revival followed improved legal clarity and the launch of spot XRP products, which brought the asset back into institutional portfolios and supported more constructive price expectations.
• RWAs and tokenization gained momentum as tokenized Treasury products, funds, and credit pools scaled under clearer regulatory frameworks, especially in the EU.
• DeFi 2.0 and DePIN protocols outperformed earlier yield-farming models by focusing on sustainable, fee-based revenue and real-world infrastructure such as storage, compute, and connectivity.

Zahnd emphasized that these narratives shared a common thread: capital increasingly rewarded utility, compliance, and durability, rather than novelty.

High-Cap Alt Snapshots (ETH, SOL, BNB, TON, LINK)

Altcoin performance in 2025 was uneven, with capital concentrating in a small number of high-liquidity assets while speculative segments only struggled during periods of tighter liquidity.

Source: TradingView

Ethereum (ETH) was the strongest major altcoin, ending the year up around +50%, but it still lagged far behind Bitcoin’s +146% gain, as per TradingView data. ETH exhibited multiple failed breakout attempts, suggesting that investors preferred Bitcoin exposure over smart-contract risk, despite strong ETF-driven flows.

BNB was the surprise stabilizer. It finished roughly flat at +1.9%, making it one of the only high-caps to avoid deep losses. This reflects BNB’s utility-driven demand inside the Binance ecosystem rather than speculative trading.

Solana (SOL), Toncoin (TON), and Chainlink (LINK) all posted heavy drawdowns. SOL ended the year down roughly 27%, TON about 26%, and LINK was the worst performer at nearly 33%. These declines show how aggressively capital rotated out of growth-oriented altcoins once Bitcoin dominance rose.

On a risk-adjusted basis, Zahnd highlighted Solana as the standout high-cap altcoin of the year. Despite broader market volatility, Solana continued to grow its ecosystem and attracted net positive ETF and product flows, even as other major assets experienced outflows. In a risk-off environment, this resilience was viewed as a strong signal of institutional confidence.

Solana’s combination of low fees and rapid settlement has also made it a preferred venue for meme token launches in 2025. Let’s examine what’s happening in that segment in more detail.

Memecoins’ Performance in 2025

Memecoins became active again in 2025, especially those launched through the best crypto launchpads. The share of memecoin market value coming from launchpad projects rose from just 1.5% in July 2024 to 20.5% by January 2025, showing a sharp return of speculative interest as per CoinGecko’s State of Memecoins Report 2025.

The report underlined that the daily trading volume for these launchpad memecoins also surged, climbing from about $118 million in mid-2024 to roughly $1.2 billion by November 2025. Even so, they still represented only around 20% of total memecoin activity, with independently launched tokens continuing to dominate the market.

Speculative activity in 2025 looked markedly different from what crypto day traders had come to expect in earlier cycles. Zahnd noted that while memecoins continued to experience sharp price spikes, those rallies were shorter-lived and more tactical. The executive explained to us:

Memecoins still had speculative spikes, but the duration of those pumps shortened and the rotation into them was more tactical. With macro uncertainty high and ETF outflows dominating the top of the stack, we saw less persistent retail mania than in 2023-24.

Has speculative trading become more tactical and short-lived? If yes, then the capital might want to rotate toward sectors with clearer usage signals. Gaming, metaverse platforms, and DePIN projects stood out in 2025 because they generated measurable activity. Here’s what was happening.

Gaming, Metaverse & DePIN

In contrast to the short-lived speculation seen in memecoins, gaming, metaverse, and DePIN projects attracted capital in 2025 by showing real usage. Blockchain gaming emerged as a major growth engine, with the market valued at approximately $13.97 billion and projected to expand further as player ownership models, NFT integration, and cross-platform interoperability drew in users and developers, according to Coherent Market Insights.

Source: Coherent Market Insights

The same demand pattern was visible in metaverse gaming ecosystems, where activity scaled from roughly $275 million in 2024 to an estimated $409 million in 2025. Virtual land sales and in-game economies contributed to what has become a multi-billion-dollar digital real-estate segment, based on Global Growth Insights.

Alongside consumer-facing platforms, Decentralized Physical Infrastructure Networks gained traction as Web3 extended into physical systems. DePIN projects used token incentives to support decentralized compute, connectivity, and data storage, marking a shift toward real-world infrastructure tokenization.

Across all three sectors, capital increasingly followed measurable performance indicators such as active wallets, transaction fees, in-game spending, and real-world usage. Protocols that generated visible cash flows and sustained engagement consistently outperformed those relying solely on token incentives. This also drove interest in tokenized real-world assets, as they provided familiar yield instruments on-chain without the pure volatility of crypto.

RWA & Tokenized Assets

Tokenized real-world assets were the fastest-growing institutional segment in 2025, with total on-chain asset value tripling from $7 billion to $24 billion in just 12 months.

Tokenization Market Breakdown | Data by DeFiLlama as cited by Glassnode

Ethereum remained the dominant settlement layer, hosting around $11.5 billion in tokenized assets. BlackRock’s on-chain BUIDL fund surged to $2.3 billion, becoming the largest single institutional product on blockchain.

This shift shows that tokenization has moved into real infrastructure, as low-correlation real-world assets are now being used to strengthen DeFi collateral and provide yield streams that are less dependent on crypto market volatility.

Jawad Ashraf of Vanar Chain, described real-world assets (RWAs) as one of the most consequential developments of the year, particularly for institutional participation. Tokenized assets, led by tokenized government bonds, surpassed $1.5 billion in circulation early in 2025, while the broader RWA sector grew beyond $25 billion.

Ashraf explained that RWAs functioned primarily as an on-ramp for traditional finance, allowing institutional investors to access familiar yields on-chain. By importing Treasuries, credit products, and other yield-bearing instruments into blockchain environments, RWAs helped rotate capital toward DeFi protocols with clearer cash flows and lower volatility profiles.

He also noted:

The growth of RWA infrastructure, involving compliant, KYC-gated wallets and standardized custodianship, began to standardize on-chain compliance, turning a niche concept into a foundational pillar for capital markets. 

Deeper liquidity also raised the stakes for security. Larger platforms, larger flows, and larger custodial balances inevitably made 2025 the year of fewer but more catastrophic breaches.

Security, Hacks & Exploits of 2026

In 2025, crypto crime became more concentrated and more severe. According to Chainalysis, over $3.4 billion in crypto was stolen during the year, even though the total number of hacking incidents actually declined,  showing that attackers focused on fewer but much larger targets.

Despite meaningful improvements in audits, tooling, and protocol design, 2025 underscored a persistent reality: security risk in crypto has shifted faster than defenses. Across exchanges, DeFi protocols, and user wallets, attackers increasingly exploited human and operational weaknesses rather than purely technical flaws.

According to Danor Cohen, CTO of Web3 security firm Kerberus, the industry has invested heavily in audits and monitoring, but this progress has not translated into proportional reductions in user losses. Kerberus’ analysis of 61 Web3 security providers found that while smart contract defenses improved, users remain most exposed at the transaction level.

Cohen highlighted a critical statistic: around 90% of exploited smart contracts in 2025 had already passed audits. This finding reinforces the view that audits, while necessary, are no longer sufficient on their own. Losses increasingly occur when users approve malicious transactions, interact with compromised interfaces, or fall victim to social engineering, areas that traditional audits do not cover.

Year’s Biggest Hacks & Losses

According to Chainalysis, the biggest breach was the Bybit exchange hack, estimated at $1.4-$1.5 billion, and widely linked to North Korean state-backed groups. The groups were reportedly responsible for over $2 billion in total thefts in 2025, which was a 51% year-on-year increase.

Cohen also identified the Bybit exchange compromise as the most consequential breach of 2025. The incident demonstrated that even large, well-resourced platforms with robust technical safeguards remain vulnerable to large-scale losses, particularly when attackers bypass protocol-level defenses and exploit operational or human weaknesses.

In parallel, Ashraf pointed to the $44.2 million CoinDCX insider breach in July as a defining moment. Unlike typical smart contract exploits, this incident stemmed from compromised employee credentials used to drain an internal operational account. Ashraf emphasized that the breach forced the industry to confront a growing shift in risk from code vulnerabilities to operational security, insider threats, and centralized access controls.

Repeated Attack Vectors in 2025

Across incidents, common patterns emerged. Cohen reported that human-targeted attacks, including phishing, social engineering, malicious dApps, and clipboard hijacking, were responsible for hundreds of millions of dollars in losses, with an estimated $600 million lost in H1 2025 alone. Despite awareness efforts, phishing click-through rates remained stubbornly high, at 7-15%, illustrating that education alone has not significantly reduced the risk.

Ashraf added that compromised admin keys, private key theft, and credential leaks were a recurring root cause behind several exchange and DeFi losses, pointing to failures in internal key management and access controls. He also highlighted business logic and Oracle-related flaws, where attackers manipulated stale or vulnerable price feeds to inflate collateral values, issues that require more rigorous formal verification rather than surface-level audits.

Zahnd echoed these observations, citing repeated failures in key management, bridge and cross-chain routing logic, and compromised front-ends or official communication channels as consistent contributors to losses. Large DeFi exploits, such as the Balancer hack that drained over $100 million, reinforced the need for layered defenses, including timelocks, circuit breakers, and formal verification.

Defensive Trends & Industry Response

While threats escalated, some defensive trends gained traction. Cohen emphasized that real-time transaction protection, systems that actively intervene at the moment a user signs a transaction, has emerged as the most effective complement to audits. However, Kerberus’ research found that only about 13% of security providers currently offer such real-time protection, despite evidence that high-quality implementations can achieve near-perfect detection of malicious transactions.

The takeaway from 2025, according to the executives, is clear: code security has improved, but the attack surface has moved. As smart contracts become increasingly harder to exploit, attackers are targeting users, operators, and centralized control points. Without broader adoption of user-centric, real-time defenses and stronger operational security practices, systemic risk is likely to persist into 2026. That reality has also sharpened the focus on governance, oversight, and regulatory frameworks as essential market infrastructure.

Crypto Regulation & Compliance in 2025

Regulation emerged as one of the most consequential forces shaping crypto markets in 2025, with clearer rulebooks across major jurisdictions translating directly into higher institutional participation and trading volumes.

TRM Labs reviewed 30 jurisdictions covering over 70% of global crypto exposure and found that around 80% saw financial institutions launch new digital-asset initiatives. This also showed a direct link between regulatory clarity and institutional expansion.

Did Regulation Help or Hurt Confidence in 2025?

Countries with clear frameworks, including the U.S., EU core markets, Japan, Korea, the UAE, Hong Kong, and Singapore, led in custody approvals, bank-backed stablecoins, and tokenized deposits, as per TRM Labs. This proved that banks now enter crypto when compliance rules are predictable.

According to Paybis’ Vasilenko, jurisdictions that delivered concrete regulatory frameworks saw immediate volume growth, adding,

Clear rules brought in real money, and every jurisdiction that delivered regulatory certainty.

He pointed to the EU’s MiCA regime, the UAE’s VARA framework, and regulatory progress in Hong Kong, Singapore, and the U.S. as examples where clarity unlocked “real money” from institutional participants rather than deterring activity.

This view was echoed by Ashraf, who argued that uncertainty, not regulation itself, has historically been the biggest drag on confidence. In 2025, clearer guidelines around asset classification and stablecoin issuance reduced legal risk for developers, banks, and corporate treasuries, enabling more formal participation by global financial institutions.

Zahnd acknowledged that regulatory transitions are rarely smooth and can create short-term friction. However, he emphasized that the combined impact of spot ETF approvals, Europe’s regulatory clarity, and ongoing policy work in the U.S. reinforced the perception that crypto is becoming a permanent component of the global financial system, rather than a marginal or temporary asset class.

Regulatory Trends That Will Matter Most in Early 2026

TRM Labs underlined that stablecoins became the centre of policy worldwide in 2025. Looking ahead, executives highlighted several regulatory developments expected to shape the next phase of adoption.

Source: Chainalysis

Aishwary Gupta, Global Head of Payments at Polygon Labs, told 99Bitcoins that the next phase of crypto adoption will be settlement infrastructure-led:

They [Stablecoins] are neutral, programmable, interoperable, and liquid across borders. Tokenised deposits and bank-issued digital money will play an important role, but largely within regulated, permissioned environments.

Vasilenko identified the passage of a U.S. stablecoin framework as a pivotal catalyst. In his view, once fully compliant dollar-denominated stablecoin rails are established, competition will intensify around who controls the dominant on-chain payment infrastructure, potentially defining the next decade of global digital payments.

He also noted that Europe’s MiCA regime is effectively “choosing winners” by creating standardized pathways for euro-referenced stablecoins and regulated service providers.

Ashraf focused on the expected rollout of formal U.S. crypto market structure rules, including clearer token taxonomies and exemptions for innovation. He argued that moving away from regulation by enforcement toward a principles-based framework would significantly de-risk the asset class for institutions, while also attracting developer talent and corporate treasury activity back into compliant U.S.-based Web3 ecosystems.

Zahnd highlighted two complementary trends: the normalization of spot crypto ETFs beyond Bitcoin and Ethereum, enabled by more generic SEC listing standards, and the full implementation of MiCA across the EU. Together, he said, these developments are pulling crypto deeper into regulated financial markets, influencing where serious teams choose to build, domicile, and raise capital.

While several major jurisdictions made tangible progress, uneven execution across markets raised questions about whether infrastructure maturity would keep pace with accelerating institutional adoption and market growth.

Manhar Garegrat, Country Head India at Liminal Custody, noted that the next phase would be defined less by policy intent and more by enforcement and operational rollout. As the executive put it:

2026 will be the year of highly developed digital asset frameworks – from discussions to demonstrations and to mandated implementations.

NFTs, Collectibles & Creator Economy

The NFT market in 2025 underwent a period of quiet transformation rather than a dramatic revival or collapse. According to Zahnd, activity stabilized after several volatile years, with annual NFT-related revenues settling in the $600-$700 million range, well below the speculative highs of 2021, but notably more consistent and utility-driven.

Zahnd emphasized that the center of gravity shifted away from short-term trading toward practical use cases, including gaming assets, ticketing systems, membership access, and IP-linked collections. This transition marked a broader maturation of the sector, where NFTs increasingly functioned as infrastructure components rather than standalone speculative instruments.

Market Size & Sales Trends

After a slow start to the year, NFTs made a strong comeback in late 2025. In October alone, NFT trading volume climbed to $546 million, up 30% month-over-month, while total sales reached 10.1 million, the highest monthly count of the year, based on DappRadar industry reports.

This rebound was driven by much lower prices, with the average NFT sale falling from $321 in January to just $54 by October, making NFTs far more affordable. According to DappRadar, user activity also increased, with 820,945 unique traders completing around 12 trades each. This trend shows that engagement shifted from hype-driven buying to regular usage.

The NFT Dapps market was valued at approximately $3.1 billion in 2025, with further expansion projected through the next decade.

Major Partnerships & Mainstream IP Deals

One of the most significant developments in 2025 was the rise of long-term brand and IP partnerships.

Company / Platform	Deal / Launch	Key Data Point
Futureverse	Acquired Candy Digital (MLB, Netflix, DC Comics IP)	Consolidates major media & sports IP into its NFT ecosystem
Yuga Labs	Partnered with Amazon to launch Boximus NFTs	$66 per NFT, sold out in under 24 hours, Amazon’s first retail NFT drop
Doodles	Partnered with Kellogg’s Froot Loops	500 NFT-bundled cereal boxes at $50 each, sold out within hours
OpenSea	Announced SEA platform token	50% of supply to the community, 50% of revenue earmarked for token buybacks

Zahnd pointed to integrations across gaming, sports, fashion, and music, where NFTs were deployed as access, loyalty, and licensing primitives rather than collectibles meant for resale. These implementations focused on embedding NFTs into existing user ecosystems, prioritizing retention and engagement over secondary market volume.

This approach contrasted sharply with earlier NFT cycles, where value was largely driven by scarcity narratives and short-lived hype. In 2025, successful projects were those aligned with recognizable brands, established platforms, and clearly defined user benefits.

Looking ahead, Zahnd expects the NFT and creator economy to continue consolidating. He anticipates fewer but higher-quality projects, more tightly integrated into large platforms and games, with real revenue-sharing models or functional access rights replacing speculative incentives.

As Zahnd put it:

The speculative mania era is likely behind us; the infrastructure and licensing phase is ahead.

This framing suggests that while NFTs may no longer dominate headlines, they are becoming embedded in the broader digital economy, positioned as a supporting layer for content, commerce, and community rather than a standalone asset class.

Predictions & What to Watch in 2026

Across market participants, expectations for 2026 converge around a cautious near-term outlook followed by a more constructive medium-term trajectory, shaped by macro conditions, institutional participation, and regulatory clarity.

Source: Bitcoin Suisse, Data: TradingView, as of November 30, 2025

Short-Term Outlook (3-6 months)

Maksym Sakharov of WeFi expects investors to remain cautious in the near term due to elevated volatility and recent corrections across major altcoins. While market sentiment has at times resembled a bear phase, he points to improving structural conditions, including clearer regulation, expanding institutional products, and growing use of crypto in payments, as signs that the industry’s foundation is strengthening. In Sakharov’s view,

It could be a period of transformative follow-through for the industry. If that becomes the case, then slight price wobbles caused by headline-driven tremors should be countered by real-world volume from continued adoption around ETPs, stablecoin rails, and such.

Jamie Elkaleh also characterizes the next few months as a period of consolidation rather than a renewed rally. He anticipates range-bound price action with intermittent volatility around macro data and policy decisions, arguing that the environment favours disciplined positioning and selective accumulation rather than aggressive risk-taking.

Jawad Ashraf similarly describes the near-term market as one of consolidation following a strong run-up. He notes that uncertainty around U.S. monetary policy continues to limit upside momentum, but believes institutional buying pressure is sufficient to prevent a deep correction, creating a stable accumulation phase.

Konstantins Vasilenko takes a cautiously bullish stance, highlighting recent drawdowns and ongoing ETF outflows as constraints on a rapid recovery. However, he argues,

The fundamentals haven’t broken. Political support is locked in, institutional infrastructure is stronger than ever, and the halving supply shock is still working its way through the system.

Alexander Zahnd describes the market as being in a “tension phase,” marked by elevated fear, technical stress across major assets, and rotating, rather than disappearing ETF flows. His base case for the coming months is a volatile, range-bound environment where tactical trading may outperform directional bets.

Medium-Term Outlook (12 months)

Looking further ahead, most executives express a moderately to strongly bullish view, contingent upon macroeconomic stabilization and continued institutional integration.

Sakharov expects reduced volatility compared with earlier cycles, driven by deeper institutional participation, expanding use of stablecoins, growth in real-world asset (RWA) tokenization, and improving decentralized trading infrastructure. In his assessment, these trends support crypto’s transition toward mainstream financial infrastructure.

Ashraf is more decisively bullish, pointing to three structural shifts he believes will define 2026: the convergence of AI and Web3 in capital management, the scaling of tokenized private markets such as credit and private equity, and the gradual smoothing of historical four-year crypto cycles as ETF and treasury-driven demand becomes more consistent.

Elkaleh sees regulatory clarity, particularly in the U.S., as a key catalyst that could unlock more conservative pools of capital. He argues that clearer rules around custody and market structure would support renewed ETF and ETP inflows, while the expansion of stablecoins and tokenized RWAs could anchor demand in utility rather than speculation. He stated:

As that clarity improves, I expect ETF and ETP inflows to re-accelerate, particularly into Bitcoin, which could feasibly push toward the $200,000 mark over the next full cycle if macro conditions cooperate.

Vasilenko remains bullish but measured, suggesting that Bitcoin could reach significantly higher levels if institutional flows return and macro conditions improve. He highlights the growing role of stablecoins in payments and the rapid expansion of tokenized real-world assets as major drivers of longer-term growth.

Zahnd’s 12-month outlook is similarly constructive, with emphasis on policy easing, stabilizing ETF flows, growth in Layer-2 ecosystems, and regulatory progress across major jurisdictions. If these conditions align, he suggests:

2025’s correction and fear phase will likely be remembered as the consolidation before the next leg higher.

Leading Indicators to Watch in 2026

Despite differing outlooks, there is broad agreement on the metrics that will matter most in 2026. These include net ETF flows across major assets, global liquidity conditions and interest-rate policy, stablecoin transaction volumes as a proxy for real economic activity, Layer-2 usage and RWA tokenization growth, security incident frequency, and concrete regulatory milestones such as MiCA implementation and new ETF listings.

 

Conclusion

Bitcoin ownership is now structurally institutional by the end of 2025. Supply is no longer primarily controlled by retail or whales, but increasingly by ETFs, corporates, and custodial balance sheets. Despite BTC losing momentum by the end of the year, the trendline is hard to ignore: crypto is no longer being “moved” mainly by narratives on X; it’s being driven by flows, policy, and product developments.

If 2024 was the year people asked “is crypto back?”2025 was the year big money answered “yes, but on our terms.” That’s why the market appeared strong on paper, with new highs, big ETFs, and large sectors, yet felt emotionally exhausting in real-time, marked by fast reversals, leverage wipeouts, and many altcoins never getting their moment.

Heading into 2026, that sets up a very different game than the last cycle. Upside may still be there, but it’s likely to be earned through fundamentals, liquidity, and positioning, not just hype. If ETF flows stay constructive, stablecoin rails keep scaling, and regulation keeps moving from “talk” to “implementation,” the next phase could look less like a fireworks show and more like a slow, institutional build that occasionally spikes into mania when liquidity loosens.

The post Crypto Market 2025: Year-End Review & Expert Insights appeared first on 99Bitcoins.