January 2025 Crypto Market Monthly Review: Bitcoin's Dominance Strengthens, Layer 2 Ecosystem Continues to Evolve

In January 2025, the total market value of the crypto market grew by 7.2%, reaching $2.8 trillion. Under the influence of new regulatory policies and breakthroughs in artificial intelligence technology, major blockchain platforms performed differently, while Bitcoin further solidified its market dominance.

Market Overview

The price of Bitcoin rose from $94,577 to $102,180, an increase of 8.0%. In contrast, Ethereum performed poorly, dropping from $3,353 to $3,292, a decrease of 1.8%, with the ETH/BTC ratio hitting a nearly 5-month low.

Policy changes have had a significant impact on market trends. The newly released cryptocurrency regulatory executive order provides clear guidance for the industry, 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, leading to a cooling of market sentiment.

The tokens launched by the Trump family on a certain public blockchain have triggered severe fluctuations in the Memecoin sector, diverting market attention and funds from other crypto sectors amidst this wave of speculation. At the same time, breakthrough advancements in the field of artificial intelligence have accelerated the focus on decentralized AI infrastructure within the crypto ecosystem, leading to an increase in the prices of related tokens.

Layer 1 Public Chain Development

The dominance of the Bitcoin market has risen to 71.3%, while Ethereum's share has dropped to 14.0%. A certain public chain surpasses another major public chain with a market share of 4.0% (3.4%). Other public chains collectively account for 7.4% of the market share.

A certain public blockchain continues to perform strongly, with a market capitalization 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 cap, Stellar, Litecoin, and Monero have shown outstanding performance, while Cardano’s market cap increased by 11.9% to $33.2 billion.

Among emerging platforms, Sui's market capitalization remains stable, while TON has seen a decline but still maintains its position in the top ten. Hedera has shown good growth with a 14.2% increase in market capitalization. Traditional Layer 1 platforms like Polkadot, Near, and Aptos are under pressure, with varying degrees of decline in market capitalization.

Bitcoin Layer 2 and Sidechain Development

The total locked value of Bitcoin Layer 2 and sidechains reached $2.6 billion, a 5.2% increase compared to last month. Core maintains market leadership with a TVL of $660 million, accounting for 25.3% of the market share. Bitlayer and BSquared performed excellently, with TVLs increasing by 15.2% and 19.7% respectively.

Rootstock and BOB ranked fourth and fifth with a TVL of $250 million and $240 million, respectively. AILayer's TVL grew by 13.2% to $230 million, demonstrating the development momentum of AI-related projects.

Among medium-sized platforms, Merlin TVL has decreased slightly, while Stacks continues to grow steadily. Small platforms show mixed performance, with BounceBit experiencing growth, while some newcomers have seen a decline.

Ethereum Layer 2 Ecosystem

The total locked value of the Ethereum Layer 2 ecosystem has dropped to $18.3 billion, a decrease of 6.7% compared to last month. The performance of market leaders varies; Arbitrum has seen a decline but still maintains its leadership position, Base continues to grow strongly, while Optimism remains relatively stable.

Platforms like World Chain and Paradex have performed excellently, with significant growth in TVL. The application of ZK Rollups technology demonstrates resilience, with both Starknet and zkSync Era experiencing varying degrees of growth.

Some mature platforms like Blast and Fuel are facing challenges, with a significant decline in TVL. Linea and Scroll also saw a slight decrease.

Overall, the competitive landscape of the Ethereum Layer 2 ecosystem continues to evolve, with Optimistic Rollup and ZK Rollup technology routes each showing their performance. New entrants keep joining, while established platforms focus on enhancing functionality and user experience to solidify their market position.