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

In January 2025, the total market value of the crypto market grew by 7.2% to $2.8 trillion, with varying performance among major blockchain platforms. Under the dual influence 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%, with the ETH/BTC ratio hitting a new low since September 2024.

This month's multiple important policy developments have had a significant impact on the crypto market. The newly released encryption regulatory executive order provides unprecedented clarity for the industry, particularly emphasizing the protection of self-custody rights and supporting the development of stablecoins. However, remarks 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 on Solana have caused significant fluctuations in the Memecoin sector, and this wave of speculation has diverted attention and funds from other crypto sectors, including the blockchain gaming field.

Breakthrough 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, with AI-related tokens experiencing a rise this month.

Layer 1

In January 2025, the total market value of blockchain climbed 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 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 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 capitalization.

Among the top 20 chains by market capitalization, Stellar has performed exceptionally well, 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.

Emerging platforms maintain their momentum, with Sui's market value stabilizing at $12.4 billion in a competitive environment. Although TON's market value dropped by 14.0% to $12 billion, it still maintains its position in the top ten. Hedera has shown good growth, with its market value increasing by 14.2% to $11.7 billion.

Traditional Layer 1 platforms such as Polkadot, Near, and Aptos are under pressure, with market capitalization declines ranging from 3.7% to 7.5%.

Bitcoin Layer 2 and Sidechains

In January 2025, Bitcoin Layer 2 and sidechains maintained a growth trend, with the total locked amount reaching 2.6 billion USD, a 5.2% increase compared to December.

Core maintains market leadership with a TVL of $660 million, although it has dropped 9.3% since December, still holding a market share of 25.3%. 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, growing at rates of 10.8% and 8.9%, respectively. Notably, AILayer's TVL grew by 13.2% to $230 million.

On medium-sized platforms, Merlin TVL gently declined 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 increasing 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, a decrease of 6.7% from December. The performance of market leaders varied.

Despite a significant drop of 20.4% in December, Arbitrum maintains its leadership position with a TVL of $6.8 billion. A certain trading platform continues its strong momentum, with a TVL increase of 14.0% to $4.6 billion, solidifying its second position. Optimism holds steady in third place with a TVL of $3 billion, only slightly decreasing by 0.5%.

Among the best-performing platforms, World Chain stood out 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, 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 by 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.