Crypto Market Review January 2025: Bitcoin’s Dominance Strengthens, Layer 2 Ecosystem Continues to Develop

In January 2025, the total market capitalization of the crypto market grew by 7.2%, reaching $2.8 trillion. Under the dual influence of new regulatory policies and breakthroughs in artificial intelligence technology, major blockchain platforms showed a diverging performance, with Bitcoin further solidifying its market dominance, increasing its share 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 nearly 5-month low.

This month, several important policy developments have had a significant impact on the crypto market. The executive order on cryptocurrency regulation issued by the U.S. government has provided clearer guidance 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, leading to a cooling of market sentiment.

A political family launched a token on Solana that triggered significant volatility in the Memecoin sector, causing this wave of speculation to divert market attention and funds from other crypto sectors, including the blockchain gaming field.

In addition, breakthroughs in the field of artificial intelligence have also influenced market dynamics, accelerating the attention to decentralized AI infrastructure in the crypto ecosystem, with related tokens experiencing an increase this month.

Layer 1 Public Chain Development

In January, the total market value of blockchain rose by 7.2% to $2.8 trillion. Bitcoin’s market dominance further increased to 71.3%, while Ethereum’s share continued to decline to 14.0%. Solana surpassed a certain exchange platform’s public chain (3.4%) 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 cap, Stellar stands out with a significant market cap increase to $12.6 billion, while Litecoin and Monero rose by 23.5% and 21.6% respectively. Cardano’s market cap increased by 11.9% to $33.2 billion.

Among emerging platforms, Sui has maintained a market capitalization of $12.4 billion in a competitive environment. Although TON’s market cap has dropped by 14.0% to $12 billion, it still holds its position in the top ten. Hedera has shown good growth, with its market cap increasing by 14.2% to $11.7 billion.

Traditional Layer 1 platforms such as Polkadot, Near, and Aptos are under pressure, with market capitalizations dropping 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 dollars, 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 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 performs excellently, with a TVL surge of 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%. Notably, AILayer’s TVL grew by 13.2% to $230 million.

On medium-sized platforms, Merlin TVL fell moderately 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 new entrants 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 6.7% decrease from December. The performance of market leaders showed divergence.

Despite a significant drop of 20.4% in December, a certain Layer 2 platform 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 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 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 increasing by 7.4% and 12.2%, respectively, reaching 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 dropped by 5.7% and 5.2%, respectively.

The competitive dynamics of the ecosystem continue to evolve, with Optimistic Rollup and ZK Rollup showing varying degrees of success. As new entrants join the ecosystem, mature platforms focus on consolidating their market position by enhancing functionality and user experience.