January 2025 Encryption Market Monthly Review

In January 2025, the total market value of the encryption market increased by 7.2% to $2.8 trillion, with major blockchain platforms showing differentiated performance. Under the dual influence of new regulatory policies and breakthroughs in artificial intelligence technology, Bitcoin strengthened its market dominance, reaching 71.3%.

Market Overview

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

Several important policy developments this month have significantly impacted the encryption market trends. The new cryptocurrency regulatory executive order provides unprecedented clarity for the industry, particularly emphasizing the protection of self-custody rights and supporting the development of stablecoins. However, remarks at the end of the month regarding international trade tariffs have raised concerns about global economic growth, causing a cooling in market sentiment.

The new token launched on Solana has triggered significant volatility in the Memecoin sector. This wave of speculation has notably diverted market attention and funds away from other encryption sectors, including the blockchain gaming field.

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

Layer 1

In January 2025, the total market value of blockchain surged 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 4.0% market share (3.4%). Other public chains collectively held 7.4% of the market share.

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

Among the top 20 chains by market capitalization, Stellar performed outstandingly, 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 dropped by 14.0% to $12 billion, it still retains its position in the top ten. Hedera has shown good growth, with its market capitalization increasing 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 since December, still accounting for 25.3% of the market share. Bitlayer shows strong growth, with TVL rising by 15.2% to $430 million (market share 16.8%), while BSquared performed exceptionally well, with TVL surging 19.7% to $400 million (market share 15.3%).

Rootstock and BOB ranked fourth and fifth with a TVL of $250 million and $240 million, respectively, with growth rates of 10.8% and 8.9%. It is worth noting that AILayer's TVL grew by 13.2% to $230 million.

On mid-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 showed mixed performance, with BounceBit growing by 7.3%, while newcomers like SatoshiVM and Naka dropped 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 decrease of 6.7% compared to December. The performance of market leaders showed divergence.

Although a certain Layer 2 platform has fallen by 20.4% since December, it 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, consolidating its second position. Optimism remains in 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 growth 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 increasing by 7.4% and 12.2%, reaching a TVL of $900 million and $610 million respectively.

Some mature platforms are facing challenges, with Blast TVL dropping by 33.8% to 400 million USD, and Fuel dropping by 47.3% to 110 million USD. Linea and Scroll also dropped 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.