January 2025 Crypto Market Analysis Report: Bitcoin's Dominance Further Strengthened

In January 2025, the total market value of the crypto market grew by 7.2%, reaching $2.8 trillion. During this month, major blockchain platforms performed differently. New regulatory policies and breakthroughs in artificial intelligence technology jointly pushed Bitcoin's market dominance up to 71.3%.

Market Overview

The price of Bitcoin rose from $94,577 to $102,180, an increase of 8.0%. In stark contrast, Ethereum performed poorly, falling from $3,353 to $3,292, a decrease of 1.8%. The ETH/BTC ratio hit a new low since September 2024.

This month, several important policy developments have had a significant impact on the crypto market. The new encryption currency regulatory executive order provides unprecedented clarity for the industry, particularly emphasizing the protection of self-custody rights and supporting the development of stablecoins. However, the comments 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 the $TRUMP and $MELANIA tokens on Solana has triggered significant volatility in the Memecoin sector. This wave of speculation has notably diverted market attention and funds from other encryption sectors, including the blockchain gaming space.

Breakthrough advancements in the field of artificial intelligence have also influenced market dynamics. This progress has accelerated the focus on decentralized AI infrastructure within the crypto ecosystem, and AI-related tokens have seen an increase this month.

Layer 1 Analysis

In January 2025, the total market value of blockchain rose by 7.2% to $2.8 trillion, with Bitcoin's market dominance further increasing to 71.3%. Ethereum's share continued to decline to 14.0%, while Solana surpassed a certain trading platform chain with a market share of 4.0% (3.4%). Other public chains collectively accounted for 7.4% of the market share.

Solana continues its strong performance, with a market cap increase of 22.0% to $112.3 billion, consolidating its position as the third largest blockchain by market cap.

Among the top 20 chains by market capitalization, Stellar stands out with its market cap significantly increasing to $12.6 billion, while Litecoin and Monero rose by 23.5% and 21.6% respectively. Cardano's market cap grew by 11.9% to $33.2 billion.

Emerging platforms maintain growth momentum, with Sui's market capitalization stabilizing at $12.4 billion in an increasingly competitive environment. Although TON's market capitalization fell by 14.0% to $12 billion, it still holds a position in the top ten. Hedera has shown good growth, with its market capitalization rising by 14.2% to $11.7 billion.

Traditional Layer 1 platforms like Polkadot, Near, and Aptos are under pressure, with market capitalization dropping between 3.7% and 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 USD, an increase of 5.2% compared to December.

Core maintains market leadership with a TVL of $660 million, despite a 9.3% decline since December, still accounting for 25.3% of the market share. Bitlayer shows strong growth, with a TVL increase of 15.2% to $430 million (market share 16.8%), while BSquared performs exceptionally well with a 19.7% TVL surge 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, MerlinTVL gently decreased by 3.7% to $170 million, while Stacks maintained stable growth, increasing by 4.0% to $120 million. Small platforms showed mixed performance, with BounceBit growing by 7.3%, while newcomers like SatoshiVM and Naka declined 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, a 6.7% decrease from December. The performance of market leaders showed divergence.

Despite a significant drop of 20.4% in December, Arbitrum maintains its leadership 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 position. Optimism holds the third place with a TVL of $3 billion, only slightly down by 0.5%.

Among the best-performing platforms, World Chain excelled 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 by 33.8% to $400 million, and Fuel down by 47.3% to $110 million. Linea and Scroll also saw declines of 5.7% and 5.2% respectively.

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