This is a summary of the State of Crypto 2025 report from a16z crypto by Daren Matsuoka, Robert Hackett, Jeremy Zhang, Stephanie Zinn, and Eddy Lazzarin
When the first State of Crypto report was released, the total crypto market was worth about half of what it is today. Now, the story of crypto is one of industry maturation. This once-fringe technology has recently hit all-time highs and is being adopted by the mainstream.
The State of Crypto 2025 report provides a detailed snapshot of the industry's evolution across markets, technology, and culture. This post will analyze the key findings from the report, exploring the data points that show how crypto is integrating into the global financial system and what it means for onchain builders.
Key Highlights from the 2025 Report
The data from the State of Crypto 2025 report reveals significant growth across several key areas. The numbers are becoming larger and moving faster, indicating a new phase of adoption and utility.
Market Capitalization and Transaction Volume
The total crypto market cap crossed the $4 trillion threshold for the first time in 2025. This growth signals increased confidence and capital inflow from both retail and institutional participants. A major driver of this growth is the rise of stablecoins.
Stablecoins have powered $46 trillion in total transaction volume over the last year. This figure rivals the volume of major global payment networks like Visa and PayPal. When adjusted, the volume is $9 trillion, but the raw number shows the sheer scale of assets moving through these protocols.
Blockchain Scalability
A frequent criticism of blockchain technology has been its inability to scale. However, the infrastructure is evolving. Blockchains now collectively process 3,400 transactions per second. While this is still a fraction of what centralized payment processors handle, it represents a significant improvement and shows that the technology is becoming more robust and ready for mainstream applications.
DeFi and DEXs
Decentralized finance (DeFi) continues to mature. A notable trend is the growth of decentralized exchanges (DEXs), which now handle 20% of all spot crypto trading volume. This shift indicates a growing user preference for self-custody and direct market access, core tenets of the onchain world. The rise of DEXs also points to a more resilient and distributed market structure.
Exchange-Traded Products (ETPs)
The introduction of crypto exchange-traded products (ETPs) has been a pivotal moment for institutional adoption. These products now hold over $175 billion in onchain crypto assets. ETPs provide a familiar and regulated entry point for traditional finance (TradFi) players to gain exposure to crypto, bridging the gap between the old and new financial worlds.
Mobile Wallet Usage
Adoption is also visible at the user level. The number of active mobile wallet users has seen steady growth. This metric is crucial because it represents individuals actively engaging with onchain applications, from holding assets to interacting with DeFi protocols and other dApps.
Builder Interest Remains Strong
On the builder side, crypto remains multichain, with Bitcoin, Ethereum (and its L2s), and Solana attracting the most developers. Ethereum, combined with its L2s, was the top destination for new developers in 2025. Meanwhile, Solana is one of the fastest-growing ecosystems, with builder interest increasing by 78% in the last two years; this is a reflection of the number of founders who tell us which ecosystem they are building on or are interested in building on based on a16z crypto investment team analysis. (You can take a closer look at these and other trends in the State of Crypto dashboard.)
Demand for Privacy
Recent data shows rising interest in privacy solutions. For example, Google searches for "crypto privacy" surged in 2025. Zcash's shielded pool grew to nearly 4 million ZEC, showing more use of privacy features. The Ethereum Foundation launched a privacy team. The Office of Foreign Assets Control (OFAC) lifted sanctions on Tornado Cash, a decentralized privacy protocol.
Zero-knowledge (ZK) proofs moved from research to essential infrastructure, supporting privacy-compliant rollups and services like Google’s ZK-based identity system. This focus on privacy, compliance, and security will accelerate crypto's expansion into mainstream applications.
AI and Crypto
Decentralized identity systems like Worldcoin, with over 17 million verified users, provide "proof of human" solutions. This addresses the need to distinguish bots from real individuals. New protocol standards, such as x402, are creating financial infrastructure for AI agents. This enables micro-transactions, API access, and payment settlement without intermediaries. Gartner predicts these advances could power a $30 trillion autonomous agent economy by 2030.
Factors Driving Mainstream Adoption
Several key factors are contributing to crypto's shift from a niche interest to a mainstream technology. These drivers span regulatory changes, institutional involvement, and the development of compelling new use cases.
Scalable Infrastructure
All of this activity wouldn’t be possible without major advances in blockchain infrastructure. Over the past five years, aggregate transaction throughput across major blockchain networks has experienced an impressive growth of more than 100x. Just half a decade ago, networks were processing fewer than 25 transactions per second.
Today, they boast the capacity to handle 3,400 transactions per second—placing them on par with completed trades on the Nasdaq or Stripe’s global throughput during Black Friday. Average transaction costs on Ethereum L2s have dropped from around $24 in 2021 to less than one cent today, making Ethereum-linked blockspace cheap and abundant. This is a key enabler for driving mainstream adoption and supporting the next wave of applications coming onchain.
Regulatory Changes
The regulatory environment, particularly in the United States, has seen a significant positive shift. After a period of uncertainty, there is now a growing bipartisan consensus that crypto is here to stay. The passage of the GENIUS Act and the House approval of the CLARITY Act are signs of a more mature approach to regulation.
This clarity is essential for builders and investors, as it provides a more stable foundation for long-term growth and innovation.
Institutional Interest
Major financial institutions are no longer just observing from the sidelines. Firms like Citigroup, Fidelity, JPMorgan, Mastercard, and Visa are actively developing and offering crypto products. This involvement ranges from custody services to direct consumer offerings. The entry of these established players lends credibility to the space and provides the infrastructure needed to onboard the next wave of users. Every major bank is now discussing stablecoins, recognizing their potential to upgrade legacy financial systems.
Emerging Use Cases
The utility of onchain technology is expanding beyond simple asset trading. Several emerging use cases are attracting new users and capital:
Real-World Asset (RWA) Tokenization: This involves bringing traditional assets like real estate, bonds, and art onchain. There is currently about $30 billion worth of tokenized RWAs, a figure that is growing rapidly. RWA tokenization bridges crypto with traditional finance, unlocking liquidity and creating new investment opportunities.
Prediction Markets: These platforms allow users to speculate on the outcome of future events. They demonstrate the power of decentralized information aggregation and provide a compelling use case for onchain systems.
Perpetual Futures: These have become a preferred product for crypto speculators due to their user experience. Their growth on DEXs highlights the sophistication of onchain financial products.
Challenges
Despite the positive trends, the crypto industry still faces challenges that must be addressed to ensure sustainable growth. However, these challenges also present significant opportunities for innovators and builders.
Scalability and Infrastructure
While blockchain throughput has improved, scalability remains a key hurdle for mass adoption. Layer 2 solutions and other scaling technologies are helping, but more work is needed to support a global user base with the speed and low cost they expect from digital services.
Remaining Regulatory Uncertainty
Although the regulatory climate is improving, ambiguity still exists in many jurisdictions. Clear, consistent, and globally coordinated regulations are needed to provide long-term certainty for the industry.
Security
Security is an ever-present concern. The report notes that roughly $750 billion in bitcoin sits in addresses vulnerable to future quantum computing attacks. As the value locked in onchain systems grows, so does the incentive for attackers. Building secure, resilient systems is paramount.
Opportunities for Builders
The challenges are matched by immense opportunities for builders:
DeFi
The DeFi ecosystem is in a much stronger regulatory position than in previous years. There is vast potential to build new financial products that are more open and accessible than their traditional counterparts.
AI and Crypto Convergence
AI is another transformative technology, and its intersection with crypto presents exciting possibilities. Crypto can provide solutions for some of AI’s most pressing challenges, such as tracking data provenance, managing IP licensing, and creating payment rails for AI agents.
New Consumer Products
The next wave of adoption will be driven by new consumer applications that are intuitive, engaging, and solve real-world problems. With greater regulatory clarity, a path is clearing for tokens to generate real revenue through fees, creating sustainable business models for onchain applications.
The Path Forward for Crypto
The State of Crypto 2025 report makes it clear: crypto is mainstreaming on nearly every front. The data shows an industry that is maturing, with growing adoption from both institutions and individuals. TradFi and fintech adoption will continue to accelerate, stablecoins will upgrade legacy systems, and new consumer products will bring the next wave of users onchain.
For builders, the message is clear. The foundational infrastructure is becoming more robust, the regulatory environment is improving, and the market is ready for new applications for everyone. It’s time to upgrade the financial system, rebuild global payment rails, and create the internet everyone deserves. The time to build is now.
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Frequently Asked Questions
How are stablecoins impacting the financial system?
Stablecoins are rivaling major payment networks like Visa in transaction volume. They are being adopted by financial institutions to upgrade legacy systems and are democratizing access to financial services globally by providing a stable digital asset for payments and savings.
What is the state of blockchain scalability?
Blockchains can now process a combined 3,400 transactions per second. While this is a significant improvement, further advancements in scalability are needed for blockchains to support mainstream consumer applications at a global scale.
How is the regulatory landscape for crypto changing?
The regulatory environment in the U.S. is becoming more favorable, with bipartisan efforts to create clear rules for the industry. This increasing clarity reduces risk for builders and investors, fostering a more stable environment for innovation.
What are some of the most promising new use cases for crypto?
The report highlights real-world asset (RWA) tokenization, prediction markets, and the convergence of AI and crypto as particularly promising areas. These use cases extend the utility of blockchain beyond financial speculation and into real-world applications.
What are the biggest challenges facing the crypto industry?
Key challenges include the need for continued improvements in scalability and infrastructure, resolving remaining regulatory uncertainties, and addressing ongoing security threats, such as the potential impact of quantum computing on existing cryptographic standards.
