According to CoinGecko's 2025 Annual Crypto Industry Report, the total cryptocurrency market capitalization fell by 10.4% year-on-year to $3.0 trillion, marking the sector's first annual contraction since 2022. The downturn was largely driven by a violent fourth-quarter correction, which saw a 23.7% drop after markets briefly touched an all-time high of $4.4 trillion earlier in the quarter.
A historic $19 billion liquidation event on October 10, triggered by a U.S. announcement of 100% tariffs on China, abruptly reversed market momentum and initiated a wave of selling that persisted through late November. Despite the price decline, trading activity surged. Heightened volatility pushed the average daily trading volume to a yearly peak of $161.8 billion in Q4, indicating strong market participation even as valuations fell.
The report highlighted a growing divergence between crypto and traditional markets. Gold dominated 2025 with a 62.6% gain, while U.S. equities also performed strongly. In contrast, Bitcoin fell 6.4% over the year, underperforming most major asset classes and signaling a further decoupling from traditional market dynamics.
Beneath the surface, the crypto ecosystem showed significant structural growth. The stablecoin sector emerged as a clear winner, expanding by 48.9% over the year to reach a record market capitalization of $311.0 billion. This growth was not without risk, however, as Ethena's USDe stablecoin collapsed by roughly 57.3% from its peak after a depeg on Binance in mid-October.
Institutional participation deepened substantially. Digital Asset Treasury Companies (DATCos) deployed at least $49.7 billion in 2025 to acquire crypto assets. By the start of 2026, these entities collectively held over $134.0 billion worth of crypto, including more than 1 million BTC and 6 million ETH, representing over 5% of the total supply of both Bitcoin and Ethereum.
Speculative and derivatives activity reached unprecedented levels. Prediction market volumes surged more than 300% year-on-year to $63.5 billion. Perpetual futures trading hit historic highs, with centralized exchanges processing $86.2 trillion in volume (a 47.4% jump) and decentralized exchanges recording $6.7 trillion (a 346% increase), lifting their market share to nearly 8%. Incentive programs and airdrop-driven participation fueled much of this growth, with platforms like Hyperliquid and Lighter becoming major volume centers.
