January 2025 Crypto Market Analysis: 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 among major blockchain platforms. Under the dual influence of new regulatory policies and breakthroughs in artificial intelligence technology, Bitcoin further consolidated 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%, with the ETH/BTC ratio hitting a nearly 4-month low.

Multiple important policy developments have had a significant impact on the trends in the crypto market. The regulatory directives on cryptocurrencies issued by the government provide unprecedented clarity for the industry, particularly emphasizing the protection of self-custody rights and supporting the development of stablecoins. However, statements at the end of the month regarding international trade tariffs raised concerns about global economic growth, leading to a cooling of market sentiment.

A token launched by a public figure's family on Solana has triggered dramatic fluctuations in the Memecoin sector. This wave of speculation has significantly diverted the market's attention and funds from other crypto sectors, including the blockchain gaming field.

DeepSeek's groundbreaking advancements in artificial intelligence have also influenced market dynamics. This progress has accelerated the attention on decentralized AI infrastructure within the crypto ecosystem, and AI-related tokens have seen an increase this month.

Layer 1 Analysis

In January 2025, the total market value of blockchain rose by 7.2% to $28 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 hold 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 capitalization.

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

Emerging platforms maintain their development momentum, with Sui's market capitalization stabilizing at $12.4 billion in an increasingly competitive environment. Although TON's market capitalization dropped by 14.0% to $12 billion, it still remains in the top ten. Hedera has shown good growth, with its market capitalization rising by 14.2% to $11.7 billion.

Traditional Layer 1 platforms such as Polkadot, Near, and Aptos are under pressure, with market capitalization declining between 3.7% and 7.5%.

Bitcoin Layer 2 and Sidechains

In January 2025, Bitcoin Layer 2 and sidechains maintained a growth trend, with a 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 accounting for 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 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.

In the medium-sized platforms, MerlinTVL gently fell by 3.7% to $170 million, while Stacks maintained stable growth, increasing by 4.0% to $120 million. The 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, down 6.7% from December. The performance of market leaders varied.

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. Another major Layer 2 platform holds the third spot 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 showed resilience, with Starknet and zkSync Era growing 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 demonstrating varying degrees of success. As new entrants join the ecosystem, established platforms focus on consolidating their market position by enhancing functionality and user experience.