Crypto Market Monthly Review: January 2025

In January 2025, the total market capitalization of cryptocurrencies grew by 7.2%, reaching $2.8 trillion. Major blockchain platforms performed variably, and under the dual influence of new regulatory policies and advancements in artificial intelligence technology, Bitcoin further solidified its market dominance, accounting for 71.3%.

Market Overview

The price of Bitcoin rose from $94,577 to $102,180, an increase of 8.0%. In contrast, Ethereum performed poorly, dropping from $3,353 to $3,292, a decrease of 1.8%, with the ETH/BTC ratio reaching a nearly 5-month low.

Several important policy developments have significantly impacted market trends. The new government's cryptocurrency regulatory directives provide clear guidance for the industry, with a particular emphasis on the protection of self-custody rights and support for the development of stablecoins. However, remarks at the end of the month regarding international trade tariffs have raised concerns about global economic growth, leading to a cooling of market sentiment.

The launch of politically related tokens on Solana has triggered intense fluctuations in the Memecoin sector, diverting market attention and funds away from other encryption sectors, including the blockchain gaming field.

The breakthrough advancements in the field of artificial intelligence have also influenced market dynamics, accelerating the focus on decentralized AI infrastructure within the crypto ecosystem, with related tokens experiencing an increase this month.

Layer 1 Public Chain

This month, Bitcoin's dominance in the crypto market further increased to 71.3%. Ethereum's share continued to decline to 14.0%, while Solana surpassed a well-known chain with a 4.0% market share (3.4%). Other public chains collectively hold 7.4% of the market share.

Solana continues to perform strongly, with a market capitalization increase of 22.0% to $112.3 billion, solidifying its position as the third largest blockchain by market capitalization.

Among the top 20 chains by market capitalization, Stellar has performed outstandingly, with a significant increase in market value. Litecoin and Monero rose by 23.5% and 21.6%, respectively. Cardano's market value increased by 11.9% to $33.2 billion.

Among emerging platforms, Sui's market capitalization remains stable at $12.4 billion in a competitive environment. Although TON's market capitalization has dropped by 14.0% to $12 billion, it still maintains a position in the top ten. Hedera shows good growth, with its market capitalization rising by 14.2% to $11.7 billion.

Traditional Layer 1 platforms such as Polkadot, Near, and Aptos are under pressure, with market capitalization declines ranging from 3.7% to 7.5%.

Bitcoin Layer 2 and Sidechains

In January 2025, Bitcoin Layer 2 and sidechains maintained a growth trend, with the total locked value reaching $2.6 billion, an increase of 5.2% compared to December.

Core maintains market leadership with a TVL of $660 million, despite a 9.3% drop from December, still holding a 25.3% market share. Bitlayer has shown strong growth, with TVL increasing by 15.2% to $430 million (market share 16.8%), while BSquared performed excellently, with TVL surging by 19.7% to $400 million (market share 15.3%).

Rootstock and BOB rank fourth and fifth with a TVL of $250 million and $240 million respectively, with growth rates of 10.8% and 8.9%. Notably, AILayer's TVL grew by 13.2% to $230 million.

On medium-sized platforms, Merlin's TVL gently fell by 3.7% to $170 million, while Stacks maintained steady growth, rising by 4.0% to $120 million. Small platforms performed unevenly, with BounceBit growing by 7.3%, while newcomers like SatoshiVM and Naka fell by 11.6% and 14.9% respectively.

Ethereum Layer 2

In January 2025, the Ethereum Layer 2 ecosystem underwent significant changes, with the total locked value dropping to $18.3 billion, down 6.7% from December. The performance of market leaders varied.

A well-known Layer 2 platform, despite a significant drop of 20.4% since December, maintains its leading position with a TVL of $6.8 billion. Base continues its strong momentum, with a TVL increase of 14.0% to $4.6 billion, solidifying its second place. Optimism, with a TVL of $3 billion, firmly holds third place, with a slight decline of 0.5%.

Among the best-performing platforms, World Chain stood out with a TVL increase of 27.6% to $350 million, while Paradex surged by 50.3% to $37.2 million. ZK Rollups demonstrated resilience, with Starknet and zkSync Era growing by 7.4% and 12.2%, respectively, reaching a TVL of $900 million and $610 million.

Some mature platforms are facing challenges, with Blast's TVL dropping 33.8% to $400 million, and Fuel falling 47.3% to $110 million. Linea and Scroll also decreased by 5.7% and 5.2%, respectively.

The competitive dynamics of the ecosystem continue to evolve, with Optimistic Rollup and ZK Rollup demonstrating varying degrees of success. As new entrants join the ecosystem, mature platforms focus on consolidating their market position by enhancing functionality and user experience.