Crypto in 2025: a year of shifting trends and structural change
The crypto market in 2025 has looked very different from years past. Long-standing patterns were broken, confidence was tested, and major infrastructure gains took center stage. Perhaps the most notable shift was the clear decoupling between Bitcoin and the rest of the market: while Bitcoin surged to new heights, many altcoins continued to lag or struggle for momentum. DeFi, once the industry’s most hyped frontier, saw enthusiasm fade as security concerns resurfaced and long-promised catalysts failed to appear.
At the same time, institutional adoption has only grown stronger. ETF flows have become a dominant market force, and Bitcoin’s correlation to tech stocks is scrutinized every time the AI sector makes a sharp move. Investors are becoming increasingly flexible, tapping into tools such as Digital Asset Treasuries (DATs), real-world asset (RWA) platforms, and tokenization—all while grappling with uncertainty around the next Federal Reserve decision and speculation about a possible AI bubble.
From a technology perspective, 2025 brought enormous progress. Ethereum shipped its Pectra upgrade, account abstraction finally reached mainstream adoption, and modular rollups continued to mature. Institutional-grade custodians and prime brokerage services expanded rapidly, while regulated perpetual trading platforms became standard. Still, the massive liquidation wave on 10th of October served as a stark reminder that even with better infrastructure, crypto’s trading systems have a long way to go.
Building through stress: the 10th of October wake-up call
October’s sudden, double-digit Bitcoin drop triggered the largest one-hour liquidation event in crypto history. More than $9 billion in derivative positions evaporated across centralized exchanges. The event exposed a key weakness: many exchanges still rely on auto-deleveraging (ADL) systems that can unfairly punish well-collateralized traders when markets move violently.
Well-known market makers and high-profile traders were hit with forced liquidations despite maintaining healthy margins. Exchanges have since promised better transparency, dynamic insurance fund contributions, and clearer warnings—but the message is clear: leverage infrastructure isn’t yet built for true institutional scale.
Security concerns also weighed heavily on DeFi. In November, Balancer Protocol—one of the oldest and most audited DeFi liquidity platforms—was exploited in a sophisticated attack that drained around $128 million. Soon after, lending and stablecoin protocol Stream Finance lost $93 million, triggering losses across interconnected protocols as collateral became worthless almost overnight.
One incident shattered the perception that legacy DeFi protocols are inherently “safer,” while the other highlighted deeper design problems in systems that outsource risk to yield-chasing curators. The takeaway is unmistakable: DeFi still needs stricter verification, slower upgrade paths, and stronger third-party oversight before prioritizing growth.
Signs of a DeFi rebound
Despite setbacks, DeFi is positioned for a steadier comeback in the year ahead. Capital is expected to rotate from pure Bitcoin exposure toward higher-yield opportunities, renewing interest in the sector. Emerging innovations—like intent-centric architectures, deep-liquidity on-chain order books (such as Hyperliquid), and rapidly expanding restaking ecosystems (EigenLayer, Babylon, Symbiotic)—are capturing investor attention.
Real-world asset tokenization continues to expand through platforms like Centrifuge, Ondo, and BlackRock’s BUIDL fund, while permissioned pools and KYC-gated liquidity layers are making DeFi accessible to regulated institutions for the first time. As Layer-2 costs fall and app-specific chains proliferate, total value locked could potentially return to all-time highs—assuming macroeconomic conditions stabilize.
Looking to 2026: the road ahead
Traditional finance firms are laying the groundwork for a future built on stablecoin-based payments. Visa and Mastercard have expanded stablecoin settlement pilots, Stripe has reintroduced USDC payouts, and PayPal’s PYUSD continues to integrate deeper into its ecosystem. Major banks like JPMorgan and Citi are expanding tokenized deposit systems and bridging private blockchains to public ones.
Regulatory clarity is also improving. Europe’s MiCA framework and more consistent U.S. guidance are accelerating the creation of yield-bearing, treasury-backed stablecoins. These trends point toward a hybrid global financial system where stablecoins become the default settlement tool for cross-border payments, corporate treasury operations, remittances, and eventually, everyday consumer purchases.
As 2025 draws to a close, the crypto industry appears more mature, more globally integrated, and more technologically advanced than ever. With better regulation, long-term institutional commitment, and breakthrough DeFi innovation converging, the coming year could mark one of the industry’s most transformative periods yet.
Disclaimer
This rewritten article is based on the original report published by TechNode Global. You can read the original at: https://technode.global/
