Market Capitalization and Bitcoin Performance
Total crypto market capitalization surpassed four trillion dollars for the first time. Bitcoin also hit a new all-time high.
At the same time, macroeconomic uncertainty—including shifting monetary policy, trade tensions, and geopolitical risks—led to extreme volatility, pushing the market to swing between approximately $2.4 trillion and $4.2 trillion.
Bitcoin and Layer One Networks Show Structural Strength
Bitcoin demonstrated a divergence between structural resilience and day-to-day network activity. While BTC achieved new highs, it ended the year modestly lower, underperforming gold and most major equities. Its market cap remained around $1.8 trillion, with dominance holding at 58 to 60%. U.S. spot ETFs attracted over $21 billion in inflows, and corporate treasuries held more than 1.1 million BTC, representing about 5.5% of total supply.
Network security strengthened, with hash rate surpassing one zettahash per second and mining difficulty rising 36% year-on-year. Yet on-chain activity softened, with active addresses down 16% and transactions below prior cycle peaks. This indicates that Bitcoin’s price and liquidity were increasingly driven by off-chain financial channels and long-term holding rather than transactional usage.
Across Layer 1 networks, Ethereum remained dominant for developer activity and DeFi liquidity, while Solana sustained high transaction volumes and generated protocol revenue that supported institutional access. BNB Chain leveraged its retail base to drive spot and derivatives activity and stablecoin settlements, emerging as one of the year’s strongest performers.
Ethereum Layer 2 solutions accounted for over 90% of transaction execution, but value capture remained concentrated among a few optimistic rollups, such as Base and Arbitrum. The broader takeaway is that raw network activity alone no longer signals economic relevance; recurring revenue streams, trading, payments, and institutional settlement now define success.
DeFi, Stablecoins, and Institutional Adoption
DeFi continued its transition toward institutionalization, with total value locked stabilizing at $124 billion, heavily weighted toward stablecoins and yield-bearing assets. Real-world asset tokenization grew to $17 billion, surpassing decentralized exchanges, while stablecoins reached a combined market cap above $307 billion thanks to regulatory clarity under the U.S. GENIUS Act. Daily transaction volumes averaged $3.54 trillion, outperforming Visa and underscoring stablecoins’ role in fast, borderless payments.
Institutional adoption expanded through regulated ETFs, crypto-backed lending, and tokenized money market funds, signaling that digital assets are increasingly embedded in traditional financial workflows. Corporate treasuries scaled up, although simpler yield-focused instruments often outperformed leveraged strategies. Global regulation matured along divergent paths, with the U.S., Europe, Hong Kong, and Singapore introducing frameworks that promoted compliance, transparency, and cross-border efficiency.