January 2025 Crypto Market Analysis: Bitcoin Leads Strongly, Layer 2 Ecosystem Continues to Evolve

In January 2025, the total market capitalization of the crypto market increased by 7.2%, reaching $2.8 trillion. Under the dual influence of new regulatory policies and breakthroughs in artificial intelligence technology, Bitcoin further consolidated its market dominance, accounting for 71.3%.

Market Overview

The price of Bitcoin rose from $94,577 to $102,180, an increase of 8.0%. In contrast, Ethereum performed weakly, dropping from $3,353 to $3,292, a decrease of 1.8%, with the ETH/BTC ratio hitting a new low in recent months.

Policy changes have had a significant impact on the market. The new government's cryptocurrency regulatory directives provide clear guidance for the industry, with a particular emphasis on the protection of self-custody rights and support for 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 launch of politically related tokens on Solana has triggered significant fluctuations in the Memecoin sector, diverting market attention and funds from other crypto sectors. Meanwhile, DeepSeek's groundbreaking advancements in the field of artificial intelligence have accelerated the crypto ecosystem's focus on decentralized AI infrastructure, leading to an increase in related tokens this month.

Layer 1 Public Chain Performance

Solana continues to perform strongly, with a market cap increase of 22.0% to $112.3 billion, solidifying its position as the third largest blockchain by market cap. Stellar has performed outstandingly, with a significant increase in market cap. Litecoin and Monero rose by 23.5% and 21.6% respectively, while Cardano's market cap increased by 11.9% to $33.2 billion.

Among emerging platforms, Sui remains stable in a competitive environment, with a market capitalization of 12.4 billion USD. Although TON's market capitalization fell by 14.0% to 12 billion USD, it still maintains a position in the top ten. Hedera shows good growth, with a market capitalization increase of 14.2% to 11.7 billion USD.

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

Bitcoin Layer 2 and Sidechain Development

The total locked value of Bitcoin Layer 2 and sidechains reached $2.6 billion, an increase of 5.2% compared to last month. Core maintains its leading position with a TVL of $660 million, although it has decreased by 9.3% from last month. Bitlayer and BSquared performed strongly, with TVL increasing by 15.2% and 19.7%, respectively.

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

Small and medium-sized platforms show varied performance, with Merlin's TVL slightly declining, while Stacks maintains steady growth. New entrants like SatoshiVM and Naka face certain challenges.

Changes in the Ethereum Layer 2 Ecosystem

The total locked value of Ethereum Layer 2 has decreased to $18.3 billion, down 6.7% from last month. The performance of market leaders is mixed; Arbitrum has dropped significantly by 20.4%, but still maintains the lead with a TVL of $6.8 billion. Base continues to grow strongly, with a TVL increase of 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 saw significant growth. ZK Rollups demonstrated resilience, with both Starknet and zkSync Era achieving growth. However, some mature platforms such as Blast, Fuel, Linea, and Scroll are facing challenges, with TVL experiencing varying degrees of decline.

As new projects continue to join, the competition in the Layer 2 ecosystem intensifies. Mature platforms are focusing on enhancing functionality and user experience to solidify their market position. Overall, the Optimistic Rollup and ZK Rollup technology routes have demonstrated varying degrees of success within the ecosystem.