The crypto market of 2025 defied expectations, but not in the way most anticipated. Returns were driven by macro factors and policy shocks rather than protocol fundamentals. Bitcoin posted a modest -6% for the calendar year (~$93K to ~$87K), though this masked an intra-year ATH of $126K in October. The broader market fared worse: a "hidden altcoin bear market" saw total crypto market cap (excluding BTC, ETH, and stablecoins) decline 34% over the full year, with the median top-100 altcoin down 64%
Yet beneath this volatility, structural conditions have materially improved. Sentiment has been washed out, leverage reduced across the system, and institutional adoption continues broadening. The passage of the GENIUS Act created the regulatory clarity institutions long demanded. "Four themes will define 2026: tokenization moving from pilots to production, privacy becoming core infrastructure, stablecoins reaching mainstream adoption, and institutional flows replacing the four-year retail cycle.
our consensus narratives have emerged, pointing toward where institutional capital will flow:
- Tokenization of Real-World Assets
- $19.3B TVL (~16% of DeFi) and tokenized treasuries at $18B (as of Dec 31, 2025)
- Zero-Knowledge Technology
- ZK-rollups and privacy-preserving compliance reaching production
- Stablecoins & Payments
- $46T in transaction volume for full-year 2025 (3x Visa), market cap at $310B (Dec 31, 2025)
- Dawn of the Institutional Era
- Bitcoin ETFs at $113B AUM, 18% of BTC held institutionally (Dec 31, 2025)
The traditional four-year crypto cycle is losing relevance as blockchain usage becomes structural: $46T in stablecoin transactions, $19B in tokenized real-world assets, and growing enterprise adoption. Crypto is no longer an experiment but part of global financial infrastructure.
