Binance Research Annual Report: Comprehensive Review of the Crypto Industry in 2025

2025 was a landmark year for the cryptocurrency industry, yet also one marked by significant market divergence.

On one hand, the total market capitalization of cryptocurrencies surpassed $4 trillion for the first time, Bitcoin reached new all-time highs, institutional participation deepened, the regulatory environment—especially concerning stablecoin policies—made substantial progress, and compliant investment tools continued to diversify. All these factors signaled that crypto assets were integrating more deeply into the mainstream financial system.

On the other hand, fluctuating monetary policies, escalating trade frictions, and heightened geopolitical risks increased macroeconomic uncertainty, frequently pushing the market into "risk-off mode" and significantly amplifying price volatility. This led to wild swings in the total crypto market cap between $2.4 trillion and $4.2 trillion, with an amplitude close to 76%. Despite continuous improvements in industry infrastructure and the institutional environment, the crypto market still recorded an annual decline of approximately 7.9%.

The core signal this sends is clear: In 2025, the price formation logic of crypto assets was increasingly dominated by macroeconomic factors and traditional financial cycles, rather than being determined solely by the adoption pace within the crypto industry itself.

Macro Environment: A Year of Volatility Amidst Data Fog

From a macro perspective, 2025 can be defined as a year of "data fog" coupled with high volatility. The market sequentially experienced events such as the inauguration of a new US administration, the "Liberation Day" tariff shocks, and a partial government shutdown, which significantly reduced the readability of macro data. Although, in early H2, speculative sentiment around Artificial Intelligence and the OBBBA Fiscal Bill (a large-scale comprehensive fiscal bill passed by the US Congress in 2025) pushed Bitcoin to new highs, the slower-than-expected pace of regulatory progress led to a noticeable decoupling of crypto assets from the recovery rally of traditional risk assets by year-end.

However, the outlook for 2026 points towards a clear "risk reset," driven by a "policy trio": globally synchronized monetary easing, massive fiscal stimulus through cash rebates and tax cuts, and a wave of regulatory relaxation. This combination is expected to replace retail-led speculation with institutional capital inflows and, supported by the potential for a US Bitcoin strategic reserve, usher in a liquidity-driven expansion cycle for the crypto market.

Bitcoin: The Trend of Macro-Assetization Further Intensifies

Bitcoin exhibited a clear divergence between structural market strength and underlying economic activity in 2025. Despite BTC hitting multiple new all-time highs during the year, its year-end closing price slightly declined, underperforming gold and most major stock indices. However, its market cap remained stable at around $1.8 trillion, with market dominance holding within the 58%–60% range.

Despite the weak price performance, the trend of capital concentration towards BTC actually intensified. US spot ETFs saw cumulative net inflows exceeding $21 billion, and corporate-level holdings surpassed 1.1 million BTC, accounting for approximately 5.5% of the total supply. Network security continued to improve: the global hash rate exceeded 1 ZH/s, and mining difficulty increased by about 36% year-over-year, indicating strong miner investment willingness.

In contrast, Bitcoin's underlying on-chain activity slowed down: the number of active addresses decreased by approximately 16% year-over-year, transaction counts remained below previous cycle peaks, and speculative token activity only appeared in brief, unsustainable bursts. Overall, Bitcoin's liquidity, price formation, and demand are increasingly being realized through off-chain financial channels and long-term holding behavior, with the base layer playing a more auxiliary role. This further solidifies Bitcoin's positioning as a macro financial asset rather than a transactional network.

Layer 1: Monetization Determines Long-Term Value

At the L1 level, 2025 clearly demonstrated that "activity" itself is not equivalent to economic relevance. Many networks failed to translate user usage into fees, value capture, or sustained token performance. Simultaneously, the L1 landscape continued to consolidate around a few leading public chains.

• Ethereum maintained its dominance in developer activity, DeFi liquidity, and overall value. However, the migration of execution off-chain and fee compression from Rollups caused ETH to persistently underperform relative to BTC.
• Solana, while maintaining high transaction volume and daily active users, significantly expanded its stablecoin supply. Even after speculative fervor subsided, it continued to generate substantial protocol revenue and successfully secured US spot ETF approval, significantly enhancing institutional accessibility.
• BNB Chain, leveraging its strong retail trading base and market narratives, drove on-chain spot, derivatives trading, and stablecoin settlement flows. It also actively pursued RWA development, making BNB the best-performing mainstream asset in 2025.

The key signal from 2025 is: L1 differentiation increasingly depends on the ability to monetize recurring cash flows (trading, payments, or institutional settlement), rather than merely pursuing transaction volume maximization.

Ethereum L2: Scale Achieved, Divergence Accelerating

In 2025, Ethereum Layer 2 networks handled over 90% of Ethereum-related transaction execution, primarily due to blob capacity expansion from protocol upgrades and reduced Data Availability (DA) costs. However, as execution migrated off-chain, the core question became: Can this scale translate into sustained usage, fee revenue, and alignment with underlying economic incentives?

From this perspective, the results show clear divergence: Activity, liquidity, and fees are concentrated in a few Optimistic Rollups (like Base, Arbitrum) and some application-specific chains with clear use cases and excellent user experience; meanwhile, usage plummeted for numerous projects after incentive programs faded.

ZK Rollups continued to make progress in proof efficiency and decentralization, but still lagged an order of magnitude behind Optimistic Rollups in terms of TVL and fee volume. Ecosystem fragmentation from over a hundred Rollups, diminishing marginal returns on incentives, and uneven progress in sequencer decentralization remain constraints.

DeFi: Moving Towards "Structural Institutionalization"

In 2025, DeFi took another step forward in its transition towards "structural institutionalization," with the core focus shifting to capital efficiency and compliance. TVL stabilized at $124.4 billion, with the capital structure clearly tilting towards stablecoins and yield-bearing assets rather than inflationary tokens.

A historic moment occurred: RWA TVL ($17 billion) surpassed DEX TVL for the first time, primarily driven by tokenized treasuries and stocks. Concurrently, the US GENIUS Act provided clear regulatory guidance for stablecoins, propelling their market cap past $307 billion and establishing them as critical global settlement infrastructure.

From a business model perspective, DeFi has matured into a cash flow system: protocol revenue reached $16.2 billion, comparable to large traditional financial institutions, and governance tokens gradually evolved into "crypto blue chips" supported by real yields. The share of on-chain trading continued to rise, with the spot trading ratio between DEXs and CEXs approaching 20% at times.

Stablecoins: The True Year of Mainstream Adoption

2025 was a breakthrough year for stablecoins' full-scale move into the mainstream. Benefiting from regulatory clarity brought by the GENIUS Act and institutional participation, the total stablecoin market cap grew nearly 50% year-over-year, surpassing $305 billion. Average daily trading volume grew 26% to $3.54 trillion, far exceeding Visa's $1.34 trillion, fully validating stablecoins' advantages in fast, borderless payments.

New heavyweight players emerged: Six new stablecoins—BUIDL, PYUSD, RLUSD, USD1, USDf, and USDtB—each surpassed a $1 billion market cap, introducing new competition and real-world use cases. These changes collectively lay the foundation for stablecoins' continued expansion in payments, savings, and fintech.

Consumer Crypto: From Infrastructure to Application

Consumer crypto is entering a critical phase: blockchain infrastructure is maturing, and the industry's focus is decisively shifting towards real-world applications and seamless experiences. Leading this transition are neo-banks and fintech platforms—whether Web2 giants or Web3-native projects—rapidly evolving into "bank-like services" built on blockchain rails.

Although the hype around crypto gaming and social applications cooled in 2025, the deep integration of blockchain into global payments and fintech lays the groundwork for the next wave of truly native application networks. In this stage, the industry's mission is also evolving: no longer just pursuing decentralization for its own sake, but consciously building trusted, verifiable systems to win the trust of both consumers and institutions.

Frontier Tech: The Intersection of AI Agents and On-Chain Payments

Frontier technology in 2025 focused on AI Agents, on-chain payments, and decentralized coordination of real-world infrastructure. The most substantive progress came from Agent payments: implementing pay-per-call for APIs, data, and automated processes via the natively re-enabled HTTP 402 "Payment Required" status code standard.

By year-end, this payment system had processed over 100 million transactions, with a cumulative transaction volume exceeding $30 million and daily transaction counts surpassing 1 million, of which over 90% were driven by Agents.

Meanwhile, Decentralized Physical AI (DePAI), as an extension of DePIN, gained traction. However, its development bottlenecks stem more from data quality, the simulation-to-reality gap, capital intensity, and safety and regulatory requirements, rather than token design itself. In contrast, DeFAI and DeSci remain in exploratory phases, yet to demonstrate sustainable economic output.

Institutional Adoption: Embedded, Not Just Exposure

The core characteristic of institutional adoption is: Crypto is being embedded into core financial processes, not merely used as a price exposure tool. Banks are moving closer to mainstreaming crypto-collateralized loans, with acceptance of BTC (and some ETH) as financial-grade collateral increasing. Compliant crypto ETFs continued to expand in breadth and structure, further solidifying ETFs as the preferred institutional entry point.

Tokenized money market funds emerged as credible RWA use cases, viewed as on-chain "cash equivalents" due to faster settlement, flexible collateralization, and auditability. Concurrently, the scale of Digital Asset Treasuries (DATs) expanded rapidly. However, 2025 data also showed increasing sustainability pressure on this model as highly leveraged treasury tools underperformed simple, yield-bearing ETFs. This reflects a broader trend in cryptocurrency development shifting from mere asset accumulation towards an infrastructure and yield-oriented model.

Global Regulation: Divergent but Converging

Global crypto regulation matured in 2025, albeit through varied and complementary paths: The US passed the GENIUS Act (July), establishing the first federal-level stablecoin framework; Europe formally implemented MiCA and strengthened licensing regimes; Hong Kong solidified its crypto hub status with the Stablecoin Ordinance and tax incentives; Singapore further raised compliance and licensing thresholds in June.

Internationally, countries accelerated commitments to the OECD's Crypto-Asset Reporting Framework (CARF), laying the groundwork for tax transparency and cross-border information exchange.

Looking Ahead to 2026

Entering 2026, we are particularly excited about several key themes and anticipate significant progress across these areas throughout the year. These themes span multiple narratives and sectors, including the macro environment and Bitcoin, institutional adoption, policy and regulation, stablecoins, tokenization, decentralized trading, prediction markets, and more.

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