a16z: Crypto Ecosystem Status Report 2025

In 2025, the world will truly embark on its on-chain journey.

Compiled by: Will Awang , Investment and Financing Lawyer specializing in Web3 & Digital Assets; Independent Researcher specializing in Tokenization, RWA, Payments, and DeSci

When a16z released its first "State of Crypto" report in 2022, the industry was still in its adolescence: the total market capitalization of crypto was only about half of what it is today, and blockchains were slow, expensive, and unreliable. Over the past three years, crypto builders have weathered a deep bear market and political uncertainty, yet continued to drive infrastructure upgrades and other key advancements. It is these efforts that have brought us to where we are today—crypto has become an indispensable part of the modern economy.

Early crypto narratives primarily benefited on-chain participants, all sharing a common goal: a dream of overnight riches. However, the crypto narrative of 2025 marks a maturing chapter for the industry, a starting point for its mainstream adoption.

In short: Encryption has grown up.

• Traditional financial giants—Visa, BlackRock, Fidelity, and JPMorgan Chase—as well as tech-native challengers like PayPal, Stripe, and Robinhood—have all launched or are launching crypto products.
• Blockchain now processes more than 3,400 transactions per second, a more than 100-fold increase in five years.
• Stablecoins have an annual trading volume of $46 trillion (adjusted for $9 trillion), enough to rival Visa and PayPal.
• Bitcoin and Ethereum spot ETFs and other products hold more than $175 billion in assets.

At the beginning of this era's grand scheme, we need to clarify: among the many narratives built for on-chain participants that have already faded away, which things will survive the test of time and quickly embed themselves in the trend of "the world is collectively going on-chain"; and how these things can thrive alongside this trend in the future.

Therefore, we have compiled a16z's State of Crypto 2025: The year crypto went mainstream, a report that provides a comprehensive analysis of this industry transformation: from an overview of the crypto ecosystem to institutional adoption, the rise of stablecoins, and the ensuing "world going on-chain," the report confirms blockchain's potential as a financial infrastructure and its integration with AI.

https://a16zcrypto.com/posts/article/state-of-crypto-report-2025

Key findings and conclusions:

• The crypto market is large, expanding globally, and continuing to grow.
• Financial institutions fully embrace crypto
• Stablecoins have become mainstream.
• Encryption is stronger in the United States than ever before.
• The world is collectively going blockchain
• Blockchain infrastructure is (almost) ready for prime time.
• Encryption and AI are converging.

I. Market: A large, global, and continuously growing crypto market

In 2025, from a data perspective, the total market capitalization of cryptocurrencies will surpass the $4 trillion mark for the first time, and the number of crypto wallet users will also reach a record high, growing by 20% compared to the previous year. From a regulatory perspective, the shift from a hostile regulatory environment to one of strong support, coupled with the accelerated adoption of technologies ranging from stablecoins and tokenization of traditional financial assets to emerging use cases, will collectively define the next cycle.

We estimate that there are currently between 40 million and 70 million active crypto users , who are people who regularly initiate on-chain transactions over the past year; according to our latest revised calculation method, this number has increased by about 10 million since last year .

Even so, this group represents only a small fraction of the 716 million global crypto holders (a 16% year-over-year increase) and a small fraction of the approximately 181 million monthly active on-chain addresses (an 18% year-over-year decrease). The significant gap between passive holders (those who simply hold tokens but do not interact with them on-chain) and active users (those who regularly transact on-chain) means that developers still have the opportunity to convert a massive number of potential users who already hold tokens but have not yet joined the blockchain into actual on-chain participants.

So, where exactly are these users located? And what are they doing?

Cryptocurrency is a global phenomenon, but its usage varies significantly across different regions. Using mobile wallet activity as a barometer of on-chain behavior, the fastest growth is seen in emerging markets such as Argentina, Colombia, India, and Nigeria. In Argentina alone, mobile crypto wallet usage has surged 16-fold in the past three years, against the backdrop of a deepening domestic currency crisis.

Meanwhile, geographic analysis of website traffic related to tokens shows that developed economies have a higher interest in the tokens themselves. Activity in countries like Australia and South Korea is more focused on trading and speculation, a stark contrast to usage patterns in developing countries.

Bitcoin, which accounts for more than half of the total cryptocurrency market capitalization, broke through a new all-time high of $126,000 and is increasingly being regarded by investors as a store of value. Ethereum and Solana have also recovered most of the ground lost since the 2022 bear market.

As blockchain continues to expand, the fee market matures, and new applications emerge, certain metrics are becoming increasingly crucial—one of which is "real economic value," the actual fees people pay to use blockchain. Currently, Hyperliquid and Solana together contribute 53% of fee-based economic activity, a stark contrast to the dominance of Bitcoin and Ethereum in previous years.

At the developer level, crypto remains multi-chain-based: Bitcoin, Ethereum (including L2), and Solana attract the most developers. Ethereum and its L2 are projected to become the top destination for new developers by 2025; while Solana is one of the fastest-growing ecosystems, with developer interest increasing by 78% over the past two years. This conclusion is based on ongoing research by the a16z crypto investment team into ecosystems where founders are already established or plan to join. (For a deeper look at these and other trends, please visit our State of Crypto data dashboard.)

II. Financial institutions have fully embraced crypto.

2025 is poised to be the year of institutional adoption. Just five days after the release of the State of Crypto report last year, Stripe announced its intention to acquire Bridge, a stablecoin infrastructure platform, marking the beginning of traditional financial giants' public foray into stablecoins. The competition has begun: traditional financial companies are preparing to take their first steps into the public eye with stablecoins.

A few months later, Circle's billion-dollar IPO officially placed stablecoin issuers among the mainstream financial institutions. In July, the bipartisan GENIUS Act took effect, providing a clear regulatory framework for builders and institutions. Since then, mentions of "stablecoins" in SEC filings have increased by 64%, and related announcements from large financial institutions have followed.

Institutional adoption is accelerating dramatically. Traditional institutions—including Citigroup, Fidelity, JPMorgan Chase, Mastercard, Morgan Stanley, and Visa—are now (or plan to) offer crypto products directly to consumers, enabling them to buy, sell, and hold digital assets just like traditional instruments such as stocks and ETFs. Meanwhile, platforms like PayPal and Shopify are doubling down on payments, building on-chain infrastructure for everyday transactions between merchants and consumers.

In addition to directly offering products, major fintech companies—including Circle, Robinhood, and Stripe—are actively developing or have announced plans to develop new public blockchains focused on payments, real-world assets, and stablecoins. These initiatives are expected to drive more payments onto the blockchain, promote enterprise adoption, and ultimately build a larger, faster, and more global financial system.

These companies have vast distribution networks, and if things go smoothly, encryption will be deeply integrated into the financial services we use every day.

Exchange-traded products (ETPs) are another major driver of institutional investment, with on-chain crypto holdings currently exceeding $175 billion, a 169% increase from $65 billion last year.

BlackRock's iShares Bitcoin Trust (IBIT) is considered the most actively traded Bitcoin ETP ever, and its subsequent Ethereum ETPs have also attracted significant inflows in recent months. (Note: Although often referred to as ETFs, these products are actually registered as ETPs on the SEC's S-1 form, indicating that their underlying assets are not securities.)

These products lowered the barrier to entry for crypto investment, releasing a large amount of institutional capital that had been waiting on the sidelines for a long time.

Publicly listed "Digital Asset Treasury" (DAT) companies—enterprises that hold crypto assets on their balance sheets, similar to companies holding cash—currently hold approximately 4% of the total circulating supply of Bitcoin and Ethereum. These DAT companies, along with ETP products, now control approximately 10% of the Bitcoin and Ethereum supply.

III. Stablecoins are moving towards the mainstream

No phenomenon heralds the maturity of crypto in 2025 better than the rise of stablecoins. In the past few years, stablecoins have been mainly used to settle speculative crypto transactions; but in the last two years, they have become the fastest, cheapest, and most global way to transfer US dollars—reaching almost any corner of the world in less than a second and less than a cent.

This year, stablecoins have become the backbone of the on-chain economy.

Over the past twelve months, total stablecoin trading volume reached $46 trillion, a 106% increase from the previous year. Although this figure primarily represents financial flows, rather than retail payments like bank card networks, and is therefore not a strictly comparable comparison, it is nearly three times the size of Visa and approaching the size of the ACH network that runs throughout the entire US banking system.

If we use the "adjusted" metrics—that is, metrics that exclude bots and other human manipulation of transaction volume and better reflect real demand—stablecoin transaction volume over the past twelve months reached $9 trillion, an 87% year-on-year increase, more than five times PayPal's annual payment volume, and more than half of Visa's.

The adoption rate continues to accelerate. In September 2025, monthly adjusted stablecoin trading volume hit a new high of approximately $1.25 trillion. Notably, this activity showed extremely low correlation with overall crypto trading volume, indicating that stablecoins have moved beyond speculation and truly achieved product-market fit.

The total supply of stablecoins also broke records, surpassing $300 billion. Leading stablecoins dominate the market: USDT and USDC together account for 87% of the total supply. In September 2025, adjusted stablecoin transaction volume settled on the Ethereum and Tron chains reached $772 billion, accounting for 64% of the total chain transaction volume. While these two major issuers and public chains account for the majority of activity, the growth of emerging chains and emerging issuers is also accelerating.

Stablecoins have now become a global macroeconomic force: more than 1% of the US dollar now exists on public blockchains in the form of tokenized stablecoins, and its holdings of US Treasury bonds have risen from 20th to 17th place last year, totaling more than $150 billion, surpassing many sovereign nations.

At the same time, the total amount of U.S. Treasury debt has surged, while global demand for the debt has weakened; for the first time in 30 years, foreign central banks have allocated more of their reserves to gold than to U.S. Treasury bonds.

But stablecoins are bucking the trend: more than 99% of stablecoins are denominated in US dollars, and their size is expected to grow tenfold to over $3 trillion by 2030, potentially becoming a source of sustained and strong demand for US debt in the coming years.

Even as foreign central banks reduce their holdings of US Treasury bonds, stablecoins continue to solidify the dollar's global dominance.

IV. The Crypto-Friendly Regulatory Environment in the United States

Washington has completely reversed its former hostile stance and rekindled the builders' confidence.

This year, the enactment of the GENIUS Act and the passage of the CLARITY Act in the House of Representatives signify a clear bipartisan consensus: crypto will not only exist for the long term but is also poised to thrive in the United States. Together, the two bills establish a comprehensive framework covering stablecoins, market structure, and digital asset regulation, striking a balance between encouraging innovation and protecting investors. Presidential Executive Order 14178 further cleared obstacles, rescinding a series of previous anti-crypto policies and establishing an interagency task force to oversee the comprehensive modernization of federal digital asset policy.

The increasingly clear regulatory environment has paved the way for entrepreneurs to develop tokens into a new generation of digital primitives—a process comparable to the impact of websites on the early internet. As the rules become clearer, more network tokens will be able to complete economic loops: generating real revenue through on-chain activities and directly attributing value to token holders, thereby building a self-sustaining new internet economic engine that allows more users to share in the benefits.

V. The world is collectively going blockchain-based.

The on-chain economy—once a niche playground for early adopters—has evolved into a multi-segment market with tens of millions of monthly active participants. Today, nearly one-fifth of spot trading volume occurs on decentralized exchanges.

Perpetual contracts have seen nearly eightfold growth in trading volume over the past year, becoming a new favorite among crypto speculators. Decentralized perpetual contract platforms such as Hyperliquid have processed trillions of dollars in transactions, with annualized revenue exceeding $1 billion this year, enough to rival some centralized exchanges.

Real-world assets (RWA)—the on-chain "tokenized" form of traditional assets such as US Treasury bonds, money market funds, private lending, and real estate—are bridging crypto and traditional finance. The total market capitalization of tokenized RWA has now reached $30 billion, nearly quadrupling in two years.

Beyond finance, one of the most ambitious frontiers in blockchain in 2025 is DePIN (Decentralized Physical Infrastructure Network). Just as DeFi restructured finance, DePIN is reshaping physical infrastructure: telecommunications and transportation networks, energy grids, and more. The opportunity is enormous: the World Economic Forum predicts the DePIN sector will grow to $3.5 trillion by 2028.

The Helium network is a prime example. This grassroots wireless network now provides 5G cellular coverage to 1.4 million daily active users through 111,000 user-operated hotspots.

Prediction markets gained mainstream popularity during the 2024 US presidential election cycle, with Polymarket and Kalshi alone seeing combined monthly trading volumes reaching billions of dollars. Despite doubts about whether this post-election surge could be sustained, these platforms have seen trading volumes increase nearly fivefold since the beginning of 2025, once again approaching their peak.

Memecoins experienced a surge amid a lack of regulatory clarity, with over 13 million new coins issued in the past year. However, this trend has cooled in recent months as sound policies and bipartisan legislation pave the way for more productive blockchain use cases: new issuances in September were down 56% from January.

NFT market transaction volume is far from returning to its 2022 peak, but the number of monthly active buyers is increasing. This suggests that consumer behavior is shifting from speculation to collecting, thanks to cheaper block space on chains like Solana and Base. (For more on the intersection of crypto and the creator economy, see our Voices Onchain program.)

VI. Blockchain infrastructure is entering its golden age.

Without a leap forward in underlying infrastructure, none of the aforementioned activity levels would be possible.

In just five years, the combined throughput of mainstream blockchain networks has increased more than a hundredfold. Back then, the entire network processed less than 25 transactions per second; now, it can complete 3,400 transactions per second, on par with the Nasdaq matching engine or Stripe's global peak on Black Friday—while at a fraction of the historical level.

Among various ecosystems, Solana has become the most prominent representative of high performance. Its high-throughput, low-cost architecture is supporting all applications from the DePIN project to the NFT market, with native applications generating $3 billion in revenue in the past year. Upgrades planned before the end of the year will double the network capacity.

Ethereum continues to advance according to its scaling roadmap, with most economic activity having migrated to L2 platforms such as Arbitrum, Base, and Optimism. The average transaction cost on L2 has dropped from about $24 in 2021 to less than 1 cent today, making the block space connected to Ethereum both cheap and plentiful.

Cross-chain bridges enable blockchains to communicate with each other. Solutions such as LayerZero and Circle cross-chain transfer protocols allow users to seamlessly transfer assets between multi-chain systems; Hyperliquid's official bridge has achieved a transaction volume of $74 billion so far this year.

Privacy is once again in focus and may be a prerequisite for widespread adoption. Signs include: a surge in Google searches related to "crypto privacy" in 2025; Zcash shield pool supply increasing to nearly 4 million ZEC; and Railgun's monthly transaction flow exceeding $200 million.

Further momentum signals: The Ethereum Foundation has established a new privacy team; Paxos and Aleo have partnered to launch the compliant private stablecoin USAD; the U.S. Office of Foreign Assets Control has lifted sanctions on the decentralized privacy protocol Tornado Cash. As crypto moves into the mainstream, we expect this trend to accelerate further in the coming years.

Similarly, zero-knowledge (ZK) and concise proof systems are rapidly evolving from decades of academic research into critical infrastructure. ZK systems have been integrated into various rollups, compliance tools, and even mainstream web services—Google's newly launched ZK identity system being a prime example.

Meanwhile, blockchain is accelerating the post-quantum roadmap. Approximately $750 billion worth of Bitcoin is stored in addresses potentially threatened by future quantum attacks. The US government has planned to migrate its federal systems to post-quantum cryptography by 2035.

VII. AI and encryption are converging and merging.

Among other advancements, the launch of ChatGPT in 2022 brought artificial intelligence into the public eye and created clearly visible opportunities for encryption. From tracking content origins and intellectual property licensing to providing payment gateways for autonomous agents, encryption may become a key solution to some of the most pressing challenges of artificial intelligence.

Decentralized identity systems like World have verified over 17 million people and can provide "human proof" to help distinguish between real people and bots.

Protocol standards such as x402 are emerging and are expected to become the financial backbone of autonomous AI agents, enabling them to make micropayments, access APIs, and settle payments without intermediaries—Gartner estimates that this type of economy could reach $30 trillion by 2030.

Meanwhile, the computing layer of artificial intelligence is concentrating in the hands of a few tech giants, raising concerns about centralization and censorship. OpenAI and Anthropic alone control 88% of the revenue of "native AI" companies; Amazon, Microsoft, and Google hold 63% of the cloud infrastructure market, while NVIDIA controls 94% of the data center GPU market. These imbalances have driven double-digit quarterly net profit growth for the "Big Seven" companies in recent years, while the combined profit growth of the remaining S&P 493 companies has failed to keep pace with inflation.

Blockchain provides a check and balance on the increasingly concentrated power of AI systems.

Amid the AI ​​boom, some builders have shifted from crypto to artificial intelligence. Our analysis shows that since the launch of ChatGPT, approximately 1,000 jobs have moved from the crypto space to AI. However, this number has been offset by an equal number of new builders joining crypto from other sectors such as traditional fintech.

VIII. What does the future hold?

As the regulatory landscape becomes clearer, the path for tokens to generate real yield through transaction fees has been illuminated.

• Traditional financial institutions and fintech companies will continue to accelerate their embrace of crypto;
• Stablecoins will upgrade legacy systems, making global financial services readily available;
• The next generation of consumer products will bring the next wave of users onto the blockchain.

We already have the infrastructure, we have the distribution channels, and we will eventually gain regulatory certainty, which will allow us to bring this technology into the mainstream.

The time has come to upgrade the financial system, rebuild global payment channels, and create the internet the world deserves.

Seventeen years have passed, and cryptography is emerging from adolescence and entering adulthood.

Disclaimer: As a blockchain information platform, the articles published on this site represent only the personal views of the authors and guests and do not reflect the position of Web3Caff. The information contained in the articles is for reference only and does not constitute any investment advice or offer. Please comply with the relevant laws and regulations of your country or region.