Crypto Market Q1 2025 Review: Market Capitalization Declines, Bitcoin's Dominance Strengthens

In the first quarter of 2025, the crypto market experienced a significant correction, contrasting sharply with the bull market at the end of 2024. The total market capitalization of cryptocurrencies fell by 18.6% in the first quarter to $2.8 trillion, after briefly reaching a high of $3.8 trillion on January 18. As the market cooled down, investor activity also decreased, with the average daily trading volume for the quarter declining by 27.3% to $146 billion.

Amid a sluggish market, Bitcoin has strengthened its dominance, reaching 59.1% by the end of the first quarter, the highest level since early 2021, primarily because altcoins have borne the brunt of the downward pressure. Although Bitcoin set a historical high of $106,182 in January, it had fallen to $82,514 by the end of the quarter, a decline of 11.8%.

The following are the key highlights of the cryptocurrency industry in the first quarter of 2025:

1. The total market capitalization of cryptocurrencies has fallen by 18.6%, dropping from the year's high of $3.8 trillion to $2.8 trillion.

2. Bitcoin's dominance has increased to 59.1%, the highest in nearly four years.

3. Bitcoin's quarterly decline was 11.8%, underperforming gold and US Treasuries.

4. The price of Ethereum plummeted from $3,336 to $1,805, wiping out the gains for the entire year of 2024.

5. The meme coin craze has subsided, and the number of new coin issuances has significantly decreased.

6. The trading volume of centralized exchanges fell by 16.3% month-on-month, reaching $5.4 trillion.

7. Solana maintains a leading position in decentralized exchange trading, accounting for 39.6%.

8. The total locked value of multi-chain DeFi is ( TVL, which evaporated by 4.89 billion USD, a decline of 27.5%.

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Bitcoin's Dominance Strengthens

Bitcoin's market dominance increased by 4.6 percentage points in the first quarter of 2025, reaching 59.1% by the end of the quarter. This is the highest level since the first quarter of 2021, primarily due to Bitcoin's relative resilience during the market downturn.

Stablecoins also benefited from the market downturn as investors sought safe havens. Tether )USDT('s market share slightly increased to 5.2%, with USDC reclaiming the seventh position in market capitalization. In contrast, Ethereum )ETH( fell significantly by 3.9 percentage points in the first quarter, with its dominance dropping to 7.9%, the lowest level since the end of 2019.

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Major Encryption Asset Performance

After reaching an all-time high of $106,182 on January 22, Bitcoin started to decline, closing at $82,514 at the end of the first quarter, a drop of 11.8%. In contrast, gold, with a 18.0% increase, became the best-performing asset class in the first quarter of 2025.

Ethereum has performed particularly poorly, plummeting from $3,336 at the beginning of the season to $1,805 at the end of the season, a quarterly decline of 45.3%, erasing all gains made in 2024. Its average daily trading volume also decreased from $30 billion in the fourth quarter of 2024 to $24.4 billion.

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Exchange Performance

In the first quarter of 2025, the top 10 centralized exchanges )CEX( had a spot trading volume of $5.4 trillion, a month-on-month decrease of 16.3%. A certain trading platform still maintains market dominance, with a market share of 40.7% in March, but its trading volume dropped from over $1 trillion in December to $588.7 billion in March.

In the decentralized exchange )DEX( sector, Solana continues to maintain its leading position, with a market share of 39.6% in the first quarter. In January, driven by the "political Meme coin" craze, Solana once accounted for 52% of on-chain transactions, causing Ethereum's market share to fall below 20% for the first time. However, as the Meme coin craze faded, Ethereum reclaimed the top spot in March, with a market share of 30.1%.

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DeFi Ecosystem

In the first quarter of 2025, the total locked value (TVL) of multi-chain DeFi decreased by 27.5%, from $177.4 billion at the end of 2024 to $128.6 billion, with the figure )TVL(. Ethereum suffered particularly severe losses, as its TVL dominance fell from 63.5% at the beginning of the quarter to 56.6% at the end, with the total amount dropping from $112.6 billion to $72.7 billion.

It is worth noting that Berachain, launched on February 6, has rapidly risen, with a DeFi TVL of 5.2 billion USD by the end of the quarter, ranking as the sixth largest TVL network. Its Boyco pre-deposit vault attracted approximately 2.3 billion USD in funds, providing strong support for day one liquidity.

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Overall, the crypto market experienced a significant adjustment in the first quarter of 2025, with Bitcoin demonstrating strong resilience, while altcoins, DeFi, and exchange activities saw varying degrees of decline. As the market enters a new cycle, the performance divergence among sectors may further intensify.