Crypto Market Review for January 2025: Bitcoin's Dominance Strengthens

In January 2025, the total market capitalization of the crypto market grew by 7.2% to $2.8 trillion, with varying performances across major blockchain platforms. Under the dual impact of new regulatory policies and breakthroughs in artificial intelligence technology, Bitcoin further solidified 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 poorly, falling from $3,353 to $3,292, a decrease of 1.8%, and the ETH/BTC ratio hit a new low in nearly 4 months.

Multiple important policy developments have significantly impacted the crypto market. 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, comments at the end of the month regarding international trade tariffs have raised concerns about global economic growth, tempering market sentiment.

A family of a certain political figure has launched a token on Solana, causing significant fluctuations in the Memecoin sector. This wave of speculation has diverted market attention and funds from other crypto sectors, including the blockchain gaming field.

DeepSeek's groundbreaking 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, leading to a rise in AI-related tokens 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 the BNB chain (3.4%) again with a 4.0% market share. 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, solidifying its position as the third largest blockchain by market cap.

Among the top 20 chains by market capitalization, Stellar stands out with a significant increase in market value. Litecoin and Monero rose by 23.5% and 21.6%, respectively. Cardano's market value increased by 11.9% to 33.2 billion USD.

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

Traditional Layer 1 platforms like Polkadot, Near, and Aptos are under pressure, with market capitalization declining by 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, 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 holding a 25.3% market share. Bitlayer shows strong growth, with TVL rising 15.2% to $430 million (market share 16.8%), while BSquared performs outstandingly, with TVL soaring 19.7% to $400 million (market share 15.3%).

Rootstock and BOB rank fourth and fifth with TVLs 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 has gently declined by 3.7% to $170 million, while Stacks has maintained stable growth, increasing by 4.0% to $120 million. Small platforms have shown mixed performance, with BounceBit growing by 7.3%, while newcomers like SatoshiVM and Naka have decreased 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 decreasing to $18.3 billion, down 6.7% from December. The performance of market leaders showed divergence.

A well-known Layer 2 platform, despite a significant drop of 20.4% compared to 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 holds the third place with a TVL of $3 billion, only slightly down by 0.5%.

Among the best-performing platforms, World Chain has excelled with a TVL growth of 27.6% to $350 million, while Paradex surged by 50.3% to $37.2 million. ZK Rollups have shown 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 47.3% to $110 million. Linea and Scroll also fell 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.