The crypto market kicked off 2025 with strong momentum, gaining over 40% in total market value since the start of the year. This growth was driven by major gains in top cryptocurrencies and positive industry developments.

However, the rally lost steam in the first quarter, with the total crypto market cap falling by about 19%. Things picked back up in the second quarter, thanks to renewed investor interest and key regulatory updates.

Clearer regulations in the U.S., new stablecoin legislation, and more big institutions joining the crypto space helped drive a fresh wave of momentum over the summer. Still, not every part of the market grew equally—some sectors performed much better than others.

One standout area is stablecoins. Their total supply jumped 35% this year, reaching a record $277.8 billion. This surge came as more people and businesses started using stablecoins for everyday transactions and investing. Stablecoins as a whole gained 38.6% year-to-date (YTD).

Public companies are also getting deeper into crypto. Corporate treasuries now hold around 1.07 million Bitcoin (BTC), which is about 5.4% of all BTC in circulation. A total of 174 companies are holding BTC on their balance sheets.

Decentralized exchanges (DEXs) have grown significantly too. They now make up over 23% of spot trading and 9.3% of futures trading volume. Even though their average daily volume is still modest at $1.9 million, their market share is rising.

Decentralized finance (DeFi) lending has been another bright spot, growing by 65% to reach $79.8 billion in total value locked (TVL). Tokenized stocks—real-world assets brought on-chain—are also gaining ground, now worth nearly $350 million due to better tech and clearer rules.

On-chain activity is booming. The number of active wallet holders jumped from 22,400 in July to 66,500 in August—nearly triple in just one month.

Overall, DeFi is up 44.6% this year, while real-world asset (RWA) tokenization saw a solid 38.7% return.

Bitcoin itself has outperformed traditional financial markets, rising 19.8% YTD. A big driver of this growth is the rise of crypto exchange-traded funds (ETFs), especially in the U.S. Spot Bitcoin and Ethereum ETFs have brought in $28 billion in net inflows.

That said, money has started moving into altcoins lately. Bitcoin dominance fell from a high of 65.1% in June to 57.2%, showing that investors are diversifying into other coins.

Ethereum has also seen major growth in staking activity. Over 35.8 million ETH are now staked—almost 30% of its total supply. Layer-1 blockchains overall posted a 24.6% return YTD.

On the flip side, not everything is going up. Meme coins have dropped by 7.4% this year. Other underperforming sectors include layer-2 solutions (-26.9%), blockchain gaming (-43.6%), and AI-focused crypto projects (-55.4%).

In summary, while the overall crypto market is performing well in 2025, the biggest winners so far have been stablecoins, DeFi lending, Bitcoin ETFs, and Ethereum staking. Meanwhile, meme coins and some niche sectors are struggling to keep up.