2025 Crypto Trends: Institutional Players, Stablecoins, and Layer 2 Adoption

The crypto market is entering 2025 with strong institutional inflows, rapid stablecoin expansion, and a shift toward Layer 2 (L2) networks.

Retail investors are becoming more active, moving beyond passive holding to direct engagement in DeFi, trading, and staking. Mobile wallet adoption has hit record levels, surpassing 36 million users in January, signaling a growing preference for on-the-go transactions. At the same time, decentralized exchanges (DEXs) now account for over 20% of total trading, boosted by meme coin speculation and AI-related tokens, particularly on cost-efficient networks like Solana and Base.

Bitcoin’s active supply surged 70% in late 2024 as retail investors gained market share, while long-term holders took profits around the $100,000 mark. Unlike previous cycles, traders are securing gains more frequently, wary of market corrections. Ethereum, though less volatile, saw a 30% rise in active supply as capital flowed into DeFi. Major ETH holders, including the Ethereum Foundation, also reduced their positions, contributing to increased liquidity.

Stablecoins continue to play a crucial role in market liquidity, with total supply surpassing $212 billion after an 18% jump in Q4. USDC has been at the forefront of this expansion, with billions flowing into Solana’s DeFi sector. December alone recorded $5 trillion in stablecoin transactions, bringing the 2024 total to $30 trillion. Regulatory uncertainty remains a concern, but stablecoins are proving indispensable for trading and settlement.

L2 networks are reshaping Ethereum’s infrastructure, with Base emerging as a dominant force in DeFi. Over the past year, active addresses on Ethereum-based L2s surged 150%, reflecting a shift away from expensive Layer 1 transactions. Instead of launching new L2s, the focus is now on scaling existing networks, reinforcing Ethereum’s role as a foundational settlement layer.

With both institutional and retail engagement growing, and infrastructure continuing to evolve, 2025 is shaping up to be a pivotal year for crypto, defined by increased adoption, shifting market dynamics, and further integration of blockchain technology into mainstream finance.