jakiro
Authors: Daren Matsuoka (a16z partner), Robert Hackett (a16z features editor), Eddy Lazzarin (a16z chief technology officer), etc.; Translation: Bitcoin Vision xiaozou
The world is becoming fully on-chain.
When we published our first crypto industry report, the field was still in its adolescence.At that time, the total crypto market capitalization was only half of what it is today, and blockchains were slower, more expensive, and less stable.
In the past three years, crypto builders have experienced market slumps and policy uncertainty, but have continued to promote major infrastructure upgrades and technological breakthroughs.These efforts bring us to the present—A historic moment when cryptoassets are becoming an important part of the modern economy.
The main thread of the crypto narrative in 2025 is the maturation of the industry.In short, the crypto world has grown up:
-
Traditional financial giants (Visa, BlackRock, Fidelity, JPMorgan Chase) and technology-native challengers (PayPal, Stripe, Robinhood) have launched crypto products;
-
The blockchain’s transaction volume per second exceeded 3,400 (an increase of more than 100 times in five years);
-
Stablecoins support annual transaction volume of US$46 trillion (adjusted to US$9 trillion), comparable to Visa and PayPal;
-
The size of Bitcoin and Ethereum exchange-traded products exceeded $175 billion.
This annual report provides an in-depth look at industry changes: from institutional adoption and the rise of stablecoins to the convergence of crypto and artificial intelligence.Our first launchEncrypted data dashboard, tracking the evolution of the industry through key indicators.
The following are the core points of this article:
-
The encryption market has formed a trend of scale, globalization and continuous growth;
-
Financial institutions fully embrace crypto-assets;
-
Stablecoins enter the mainstream;
-
The resilience of the U.S. encryption ecosystem has reached a historical peak;
-
The world is accelerating the on-chain process;
-
Blockchain infrastructure is approaching a critical point of maturity;
-
Encryption and artificial intelligence technology are deeply integrated.
1, the encryption market has formed a trend of scale, globalization and continuous growth.
In 2025, the total market value of cryptocurrencies exceeded the $4 trillion mark for the first time, highlighting the overall jump in the industry.The number of crypto mobile wallet users surged 20% year-on-year, reaching a record high.The dramatic change in the environment from regulatory resistance to policy support, coupled with the accelerated implementation of technologies such as stablecoins and tokenization of traditional financial assets, will define the development trajectory of the next cycle.
According to our analysis and estimation based on updated methodology, there are currently about 40 million to 70 million active crypto users worldwide, an increase of about 10 million from last year.
This number only accounts for a small proportion of the world’s 716 million crypto asset holders (a year-on-year increase of 16%), and is also far lower than the approximately 181 million monthly active addresses on the chain (a year-on-year decrease of 18%).
The numerical gap between passive holders (who own crypto assets but do not conduct on-chain transactions) and active users (who regularly conduct on-chain transactions) reveals an important opportunity for crypto builders: how to reach potential user groups who already hold crypto assets but have not yet participated in on-chain activities.
So where are these crypto users located?What activities are they doing?
The crypto ecosystem has global characteristics, but different regions of the world present differentiated usage patterns.Mobile wallet usage, an indicator of on-chain activity, is growing fastest in emerging markets such as Argentina, Colombia, India and Nigeria (especially Argentina, which has seen a 16-fold surge in crypto mobile wallet usage amid a currency crisis that has continued to escalate over the past three years).
At the same time, our analysis of the geographical origins of token-related web traffic shows that token interest indicators are skewed towards developed countries.Compared with user behavior in developing countries, activities in countries such as Australia and South Korea may be more concentrated in the fields of trading and speculation.
Bitcoin (which still accounts for more than half of the total crypto market capitalization) has gained favor with investors as a store of value, hitting an all-time high of over $126,000.Meanwhile, Ethereum and Solana have regained most of their losses following the 2022 plunge.
As blockchain continues to expand, the fee market matures, and new applications emerge, certain metrics are becoming increasingly important, one of which is “real economic value” – a measure of how much users actually pay to use the blockchain.Hyperliquid and Solana currently account for 53% of revenue-generating economic activity, which is a significant shift from the earlier dominance of Bitcoin and Ethereum.
From the perspective of developer ecology, the crypto world still presents a multi-chain structure, with Bitcoin, Ethereum and its second-layer network, and Solana forming the three core developer gathering places.Ethereum and its second-layer network will become the preferred target for new developers in 2025, and Solana is one of the fastest-growing ecosystems – developer interest has increased by 78% in the past two years.This data comes from the a16z encryption investment team’s survey and analysis of entrepreneurs’ preferred development platforms.
2, Financial institutions fully embrace crypto assets
2025 can be called the first year of institutional adoption.Just five days after last year’s “State of the Crypto Industry” report announced that stablecoins had achieved product-market fit, Stripe announced the acquisition of the stablecoin infrastructure platform Bridge, thus kicking off the public deployment of stablecoins by traditional financial companies.
A few months later, Circle’s $10 billion IPO marked the stablecoin issuer’s official entry into the ranks of mainstream financial institutions.In July, the “GENIUS Act” supported by both parties was officially legislated, providing clear action guidelines for builders and institutions.Since then, the frequency of mentioning stablecoins in SEC documents has increased by 64%, and there has been a surge in layout announcements from major financial institutions.
Institutional applications are accelerating.Traditional financial institutions such as Citigroup, Fidelity, JPMorgan Chase, Mastercard, Morgan Stanley and Visa have begun (or plan to) offer crypto products directly to consumers, allowing them to buy, sell and hold digital assets alongside traditional instruments such as stocks and exchange-traded products.Meanwhile, platforms like PayPal and Shopify are doubling down on payments, building the infrastructure for everyday transactions between merchants and consumers.
In addition to directly offering products, major fintech companies such as Circle, Robinhood, and Stripe are actively developing or have announced plans to develop new blockchains focused on payments, real-world assets, and stablecoins.These initiatives may push more payment flows onto the chain, promote enterprise applications, and ultimately build a larger, faster, and more global financial system.
These companies have huge distribution networks.If development continues, encryption technology is expected to be fully integrated into the financial services we use every day.
Exchange-traded products have become another key driver of institutional investment, with current on-chain crypto asset holdings exceeding US$175 billion, a 169% surge from US$65 billion a year ago.
BlackRock’s iShares Bitcoin Trust has been hailed as the most actively traded Bitcoin exchange-traded product ever, and its subsequent launch of an Ethereum exchange-traded product has also seen significant inflows in recent months.(Note: Although often referred to as exchange-traded funds, these products actually file S-1 filings to register with the SEC as exchange-traded products, indicating that their underlying assets do not contain securities.)
Such products have significantly lowered the investment threshold for crypto-assets and opened up entry channels for large-scale institutional funds that have historically been on the periphery of the industry.
Publicly traded “digital asset treasury” companies – entities that hold crypto assets on their balance sheets (similar to corporate treasury holdings of cash), currently collectively hold about 4% of the total Bitcoin and Ethereum in circulation.Such digital asset treasury companies and exchange-traded products now collectively hold about 10% of the circulating supply of Bitcoin and Ethereum.
3, Stablecoins enter the mainstream
The most mature symbol of the crypto market in 2025 is the rise of stablecoins.In previous years, stablecoins were mainly used to settle speculative crypto transactions, but in the past two years, they have become the fastest and lowest-cost method of US dollar circulation in the world – processing millions of transactions per second, with a single cost of less than one cent, covering most regions around the world.
This year, stablecoins have become the backbone of the on-chain economy.
The total transaction volume of stablecoins in the past year reached US$46 trillion, a year-on-year increase of 106%.Although this mainly represents the flow of funds (different from the retail payments of card organizations), the scale has reached three times that of Visa and is approaching the ACH network that runs through the U.S. banking system.
After adjustment (excluding data from robots and artificial wash volume), the real transaction volume of stablecoins in the past 12 months was US$9 trillion, a year-on-year increase of 87%, more than five times the processing volume of PayPal, and more than half the size of Visa.
Applications are accelerating in popularity.Adjusted monthly stablecoin trading volume has soared to all-time highs, approaching $1.25 trillion in September 2025 alone.
Notably, this activity is poorly correlated with overall crypto trading volume – indicating that the stablecoin is being used for non-speculative purposes and, more importantly, confirms its product-market fit.
The total supply of stablecoins has also reached a record high, currently exceeding $300 billion.
The market is dominated by the top stablecoins: Tether and USDC account for 87% of the total supply.In September 2025, the stablecoin transaction volume (adjusted) processed by the Ethereum and TRON blockchains reached $772 billion, accounting for 64% of all transaction volume.While these two major issuers and blockchains account for the majority of stablecoin activity, growth among emerging blockchains and issuers is also accelerating.
Stablecoins have become an important force in the global macroeconomy: more than 1% of the U.S. dollar exists in the form of tokenized stablecoins on public blockchains, and its U.S. debt holdings ranking rose to 17th from 20th last year.Stablecoins currently hold a total of more than $150 billion in U.S. debt—more than the holdings of many sovereign countries.
Meanwhile, the national debt continues to surge even as global demand for U.S. Treasuries weakens.This is the first time in 30 years that a foreign central bank’s gold reserves exceed U.S. Treasury securities.
But stablecoins are bucking the trend: more than 99% of stablecoins are denominated in U.S. dollars, and their size is expected to grow tenfold to more than $3 trillion by 2030, which may provide a strong and sustainable source of demand for U.S. debt in the coming years.
Even as foreign central banks reduce their holdings of U.S. debt, stablecoins are still consolidating the dollar’s dominance.
4, The resilience of the U.S. encryption ecosystem has reached a historical peak
The United States has reversed its previous confrontational stance on the crypto space and restored confidence among builders.
The passage of the GENIUS Act this year and the approval of the CLARITY Act by the House of Representatives indicate that the two parties have reached a consensus: crypto assets will not only survive in the United States, but also have the conditions to prosper and develop.The two bills jointly build a framework for stablecoin regulation, market structure and digital asset supervision that balances innovation and investor protection.At the same time, Executive Order 14178 repealed earlier anti-crypto directives and established an interagency working group to modernize federal digital asset policy.
The regulatory environment is paving the way for builders to unleash the full potential of tokens as new digital primitives – just as websites were for previous generations of the internet.With the clarification of the regulatory framework, more network tokens will complete the economic closed loop by generating benefits attributed to currency holders, thus creating a new economic engine for the Internet that is self-sustaining and allows more users to share system dividends.
You are a translation expert in the field of encryption and blockchain. Please translate the following from English into Chinese. Please pay attention to keeping the translation format consistent with the original paragraph format.
5, Globally accelerating the on-chain process
What was once just a niche testing ground for early adopters has evolved into a diverse ecosystem with tens of millions of monthly active participants.Nearly one-fifth of spot trading volume today occurs through decentralized exchanges.
Perpetual contract trading volume has surged nearly 8 times in the past year, showing explosive growth among crypto speculators.Decentralized perpetual contract exchanges such as Hyperliquid have processed trillions of dollars in trading volume and generated more than $1 billion in annualized revenue this year—data that is comparable to some centralized exchanges.
Real-world assets—including traditional assets such as U.S. Treasuries, money market funds, private credit, and real estate that are tokenized on-chain—are bridging crypto and traditional finance.The total market size of tokenized RWA reaches US$30 billion, which has increased nearly four times in the past two years.
In addition to the financial field, the most ambitious frontier of blockchain in 2025 is undoubtedly DePIN – a decentralized physical infrastructure network.
Just as DeFi is reshaping the financial system, DePIN is reshaping physical infrastructure such as telecommunications networks, transportation systems, and energy grids.The potential in this area is huge: the World Economic Forum predicts that the DePIN market will reach $3.5 trillion by 2028.
Helium network is the most representative case.The grassroots-driven wireless network currently provides 5G cellular coverage to 1.4 million daily active users through more than 111,000 user-operated hotspots.
The prediction market broke through the mainstream circle during the 2024 US presidential election cycle, with the total monthly trading volume of leading platforms Polymarket and Kalshi reaching billions of dollars.Although they have faced doubts about whether they can maintain activity in non-election years, the transaction volume of these platforms has increased nearly five times since the beginning of 2025, approaching historical peaks.
In the absence of clear supervision, Memecoin has experienced explosive growth, with more than 13 million types launched in the past year.This trend has cooled somewhat in recent months, with September issuance down 56% from January, as benign policies and bipartisan legislation clear the way for more constructive blockchain use cases.
Although the NFT market transaction volume has not returned to the peak in 2022, the number of monthly active buyers continues to grow.These trends seem to indicate that consumer behavior is shifting from speculation to collection, and the cheaper block space costs on chains such as Solana and Base provide conditions for this.
6, Blockchain infrastructure approaches a critical point of maturity
None of these activities would be possible without significant advancements in blockchain infrastructure.
In just five years, the total transaction throughput of mainstream blockchain networks has increased by more than 100 times.In the past, the number of transactions processed by the blockchain per second was less than 25, and now it has reached 3,400 transactions per second, which is the same as the transaction speed of Nasdaq and the global processing volume of Stripe during Black Friday, and the cost is only a fraction of the historical cost.
In the blockchain ecosystem, Solana has become one of the most prominent representatives.Its high-performance, low-cost architecture now supports various applications from DePIN projects to the NFT market, and its native applications generated US$3 billion in revenue in the past year.The planned upgrade is expected to double the network’s capacity by the end of the year.
Ethereum continues to advance its expansion roadmap, and most economic activities have been migrated to second-layer solutions such as Arbitrum, Base, and Optimism.The average L2 transaction cost has dropped from approximately $24 in 2021 to less than a cent today, making Ethereum-related block space both cheap and plentiful.
Cross-chain bridges are enabling blockchain interoperability.Solutions such as LayerZero and Circle’s cross-chain transfer protocol enable users to transfer assets across multi-chain systems.Hyperliquid’s canonical bridge has seen $74 billion in trading volume year-to-date.
Privacy protection is returning to the spotlight and may become a prerequisite for large-scale adoption.Signs of increased attention include a surge in crypto privacy-related Google searches in 2025; Zcash’s shielded pool supply growing to nearly 4 million ZEC; and Railgun’s monthly transaction traffic exceeding $200 million.
More signs of momentum: Ethereum Foundation launches new privacy team; Paxos partners with Aleo to launch private and compliant stablecoin (USAD); Office of Foreign Assets Control lifts sanctions on decentralized privacy protocol Tornado Cash.We expect this trend to gain momentum in the coming years as crypto continues to become more mainstream.
Likewise, zero-knowledge and succinct proof systems are rapidly evolving from decades of academic research into critical infrastructure.Zero-knowledge systems are now integrated into Rollup, compliance tools and even mainstream web services – Google’s new ZK identity system is one example.
At the same time, blockchain is accelerating its quantum-resistant computing roadmap.Approximately $750 billion in Bitcoin is currently held in addresses vulnerable to future quantum attacks.The U.S. government plans to transition federal systems to quantum-resistant cryptographic algorithms by 2035.
7, deep integration of encryption and artificial intelligence technology
Among many technological advancements, the launch of ChatGPT in 2022 will push AI into the spotlight of public view – which will also bring clear opportunities to the encryption field.From traceability and IP authorization to providing payment channels for agents, encryption technology may become the answer to the most pressing challenges in the AI field.
Decentralized identity systems such as Worldcoin, which have verified more than 17 million users, can provide “human proof” and help distinguish real users from robots.
Emerging protocol standards such as x402 are becoming potential financial infrastructure for autonomous AI agents, helping them complete micropayments, API calls, and intermediary settlements—Gartner predicts that the scale of this economy may reach $30 trillion by 2030.
At the same time, the computing layer of artificial intelligence is consolidating around a handful of tech giants, raising concerns about centralization and censorship.Currently, OpenAI and Anthropic alone control 88% of “AI native” enterprise revenue, Amazon, Microsoft and Google account for 63% of the cloud infrastructure market, while Nvidia holds 94% of the data center GPU market.This imbalance has allowed the “Big Seven” companies to achieve double-digit net profit growth for multiple consecutive quarters, while the earnings growth of the remaining 493 companies in the S&P 500 generally failed to outperform inflation.
Blockchain technology provides a check and balance for the centralized power manifested by AI systems.
Amid the AI boom, some crypto builders have pivoted.Our analysis shows that approximately 1,000 jobs have been transferred from the crypto industry to the AI field since the launch of ChatGPT.But this loss has been offset by an equal number of builders joining the crypto industry from other fields such as traditional finance and technology.
8, future prospects
What stage are we currently at?As the regulatory framework becomes increasingly clear, the path for tokens to generate real revenue through fees is becoming clear.The adoption of encryption by traditional finance and financial technology will continue to accelerate; stable coins will upgrade the traditional financial system and promote global financial inclusion; new products will lead the next wave of users to flood into the on-chain world.
We already have the infrastructure and distribution network in place and will soon have the regulatory certainty to mainstream the technology.Now is the time to upgrade the financial system, rebuild global payment channels, and build an ideal Internet form.
After seventeen years of development, the encryption industry is bidding farewell to adolescence and entering a mature period.
