January 2025 Crypto Market Review: Bitcoin's Dominance Strengthens, Layer 2 Ecosystem Transformation

In January 2025, the total market value of the crypto market grew by 7.2% to $2.8 trillion, with major blockchain platforms showing varied performance. Under the dual impact of new regulatory policies and breakthroughs in artificial intelligence infrastructure technology, Bitcoin's market dominance further increased to 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, 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 have had a significant impact on the crypto market trends. The new government's administrative order on cryptocurrency regulation 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, leading to a cooling of market sentiment.

Political figures have launched a token on Solana, causing significant fluctuations in the Memecoin sector. This wave of speculation has notably diverted attention and funds from the market's other crypto sectors, including the blockchain gaming field.

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

Layer 1

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 4.0% market share (3.4%). Other public chains collectively accounted for 7.4% of the market share.

Solana continues to perform strongly, with a market capitalization 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 has performed exceptionally well, with its market cap significantly increasing to 12.6 billion USD, while Litecoin and Monero rose by 23.5% and 21.6% respectively. Cardano's market cap grew by 11.9% to 33.2 billion USD.

Emerging platforms maintain their growth momentum, with Sui's market capitalization stabilizing at $12.4 billion amidst increasing competition. 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 decreasing 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 amount 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% drop from December, still holding 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 performed excellently, with a TVL surge of 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 TVL fell gently 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 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, a decrease of 6.7% compared to December. The performance of market leaders varied.

A certain Layer 2 platform, despite a significant drop of 20.4% in 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 position. Optimism remains firmly in third place with a TVL of $3 billion, only slightly down by 0.5%.

Among the platforms that performed best, World Chain showed outstanding results, 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, achieving a TVL of $900 million and $610 million.

Some mature platforms are facing challenges, with Blast TVL dropping by 33.8% to $400 million and Fuel down by 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 solidifying their market position by enhancing functionality and user experience.