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

In January 2025, the total market value of the crypto market grew to $2.8 trillion, a month-on-month increase of 7.2%. Under the dual influence of new regulatory policies and breakthroughs in artificial intelligence technology, major blockchain platforms showed divergent performance, with Bitcoin further consolidating 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 weakly, with its price falling from $3,353 to $3,292, a decrease of 1.8%, and the ETH/BTC ratio hit a nearly 5-month low.

In terms of policy, the cryptocurrency regulatory guidelines issued by the new government provide a clear direction 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.

The launch of politically related tokens on Solana has triggered drastic fluctuations in the Memecoin sector, diverting market attention and funds from other crypto sectors during this speculative frenzy. Meanwhile, breakthroughs in the field of artificial intelligence have accelerated the attention on decentralized AI infrastructure within the crypto ecosystem, leading to a rise in related tokens this month.

Layer 1 Public Chain Development

The dominance of the Bitcoin market has increased to 71.3%, while the share of Ethereum has decreased to 14.0%. Solana has surpassed the BNB chain with a 4.0% market share (3.4%), while other public chains account for a total of 7.4% of the market share.

Solana continues to show strong performance, with a market cap increase of 22.0% to $112.3 billion. Among the top 20 chains by market cap, Stellar, Litecoin, and Monero have performed outstandingly, each experiencing significant growth. Cardano's market cap increased by 11.9% to $33.2 billion.

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

Bitcoin Layer 2 and Sidechain Development

The total locked value of Bitcoin Layer 2 and sidechains reached $2.6 billion, a 5.2% increase from last month. Core maintains its leading position with a TVL of $660 million, despite a decline from last month. Bitlayer and BSquared performed exceptionally well, with TVLs increasing by 15.2% and 19.7% respectively.

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

The performance of small and medium-sized platforms varies, with Merlin and Stacks remaining relatively stable, while newcomers like SatoshiVM and Naka have experienced varying degrees of decline.

Ethereum Layer 2 Ecosystem Changes

The total locked value of Ethereum Layer 2 has dropped to $18.3 billion, a decrease of 6.7% compared to last month. The performance of market leaders is mixed; Arbitrum, despite a significant drop of 20.4%, still leads with a TVL of $6.8 billion. Base continues to grow strongly, with TVL increasing by 14.0% to $4.6 billion. Optimism remains in third place with a TVL of $3 billion.

Among the best-performing platforms, World Chain and Paradex showed significant growth. ZK Rollups demonstrated resilience, with Starknet and zkSync Era both experiencing growth to varying degrees. However, some mature platforms like Blast and Fuel are facing challenges, with a noticeable decline in TVL.

Overall, the competitive dynamics of the Ethereum Layer 2 ecosystem continue to evolve, with Optimistic Rollup and ZK Rollup technology routes each achieving success. New entrants are constantly joining the ecosystem, while mature platforms are focused on consolidating their market position by enhancing functionality and user experience.