As we pass the midpoint of 2025, the cryptocurrency market continues to evolve with shifting fundamentals, evolving on-chain dynamics, and growing institutional interest. Drawing insights from Coinbase’s latest research, this midyear review breaks down 10 key charts that illuminate critical trends across Layer 1 and Layer 2 networks, investor behavior, and market structure.
These visualizations go beyond surface-level metrics, offering a nuanced understanding of where value is being created, how users are interacting with blockchains, and what macro forces are shaping crypto’s trajectory.
Standardizing TVL Growth Across Major Networks
Total Value Locked (TVL) is a widely used metric in decentralized finance (DeFi), but raw TVL comparisons can be misleading. Instead of comparing nominal values across chains, a more insightful approach adjusts TVL growth by the price performance of each network’s native gas token.
Why does this matter? Because native tokens often make up a significant portion of deposited collateral or liquidity. Without adjusting for price appreciation, it's difficult to distinguish whether TVL growth stems from genuine adoption or simply token price inflation.
When adjusted, the data reveals that overall TVL growth has outpaced the broader crypto market’s market capitalization increase—up 24% year-over-year. Notably, newer ecosystems like TON, Aptos, Sui, and Base have seen explosive growth, benefiting from early-stage network effects and strategic ecosystem incentives.
👉 Discover how emerging blockchain platforms are reshaping DeFi growth in 2025.
On-Chain Activity: Measuring Real Usage Through Fees and Users
User engagement and economic activity on blockchains can be effectively gauged through two core indicators: daily active addresses and transaction fees. In May 2025, we observed divergent trends across major networks when measuring these metrics against their four-month averages.
- Solana and Tron were outliers, maintaining or increasing fee revenue despite broader declines.
- Most other networks saw a drop in daily fees, including Ethereum mainnet.
- However, Ethereum Layer 2s—especially Arbitrum—experienced a surge in active addresses following the Dencun upgrade and the introduction of EIP-4844, which drastically reduced rollup transaction costs.
This decoupling between fees and user activity highlights a crucial development: lower costs are driving higher adoption. Meanwhile, networks like Cardano and Binance Smart Chain saw both fees and wallet activity decline, suggesting reduced short-term speculative interest.
What’s Driving Ethereum Transaction Fees?
To understand Ethereum’s fee dynamics, researchers analyzed the top 50 smart contracts by gas consumption—responsible for over 55% of total gas used year-to-date.
Post-Dencun, the landscape shifted significantly:
- Rollup-related fees dropped from 12% to under 1% of total network fees due to blob transactions.
- MEV (Maximal Extractable Value)-driven transactions rose from 8% to 14%.
- Direct user transaction fees increased from 20% to 36%.
Despite ETH entering an inflationary issuance phase in mid-April, rising market volatility and high-value transaction demand appear to be counterbalancing downward fee pressure. This suggests that user-driven economic activity remains robust even as scalability improves.
Explosive Growth of Ethereum Layer 2s
Ethereum’s Layer 2 scaling solutions have seen staggering adoption. TVL across L2 networks has grown 2.4x year-over-year, reaching $9.4 billion by the end of May 2025.
As of early June:
- Arbitrum leads with 33% market share.
- Blast follows with 24%.
- Base, Coinbase’s own L2, holds approximately 19%, underscoring strong ecosystem support and integration.
The Dencun upgrade on March 13 introduced blob storage, enabling cheaper data availability for rollups. This innovation led to a sharp decline in transaction fees—even as TVL and transaction volume hit all-time highs—validating the effectiveness of Ethereum’s modular scaling roadmap.
Bitcoin’s Active Supply Dips: A Sign of Cooling Momentum?
Bitcoin’s active supply—defined as BTC that has moved within the past three months—peaked at 4 million BTC in early April, the highest level since the first half of 2021. By early June, it had fallen to 3.1 million BTC, indicating a slowdown in trading activity.
This pattern historically follows local price tops, suggesting reduced short-term speculation. However, the supply of dormant BTC—coins untouched for over a year—has remained stable year-to-date. This implies that while momentum traders may be stepping back, long-term holders remain confident.
Such divergence reflects a maturing market: short-term volatility is giving way to strategic accumulation.
Market Correlations: Crypto’s Evolving Relationship With Macro Assets
Over a 90-day window, Bitcoin returns show moderate correlation with key macro indicators:
- U.S. equities
- Commodities
- Broad dollar index (DXY)
Notably, its correlation with gold remains weak, reinforcing Bitcoin’s role as a distinct asset class rather than a pure digital gold proxy.
Meanwhile, Ethereum’s correlation with the S&P 500 (0.37) now nearly matches Bitcoin’s (0.36)—a sign of increasing institutional convergence. While BTC/ETH correlation dipped slightly from 0.85 in March to 0.81 in April, they still trade in tight alignment compared to cross-asset pairs.
These trends suggest that while crypto is increasingly sensitive to macro conditions, it retains unique drivers tied to protocol innovation and network usage.
Liquidity Trends in Spot and Futures Markets
Combined daily trading volume for Bitcoin and Ethereum spot and futures markets peaked at $111.5 billion on March 11 but declined by 34% to $74.6 billion in May. Still, May’s volume exceeded all months since September 2022 except March 2023.
Key developments:
- Centralized exchange (CEX) spot Bitcoin volume rose 50% from December 2024 ($5.1B) to May 2025 ($7.6B), fueled by ETF approvals.
- Spot Bitcoin ETFs generated $1.2 billion in daily trading volume in May, accounting for 14% of global spot volume.
This shift underscores the growing influence of regulated financial products in shaping market liquidity.
CME Bitcoin Futures: Tracking Institutional Demand
CME Bitcoin futures open interest (OI) has surged:
- Up 2.2x from $4.5B to $9.7B since January 2025
- Up 8.1x from $1.2B since January 2024
A significant portion of this growth coincided with the approval of spot Bitcoin ETFs in January, enabling traditional brokers to facilitate arbitrage strategies between futures and ETFs—commonly known as basis trades.
Perpetual futures OI also rose from $9.8B to $16.6B, with CME consistently holding around 30% of total futures OI (up from just 16% in early 2023). This expanding footprint signals growing trust in regulated U.S.-based derivatives markets among institutions.
CME Ethereum Futures: Still Playing Catch-Up
While CME Ethereum futures OI is nearing all-time highs, the landscape differs sharply from Bitcoin:
- 85% ($12.1B) of ETH derivatives OI is in perpetual contracts—largely unavailable on U.S. exchanges.
- Only 8% ($1.1B) resides in CME futures.
- Traditional fixed-term futures on centralized exchanges hold OI comparable to CME.
Historically, spikes in ETH OI follow major catalysts:
- The Dencun upgrade on March 13 triggered a surge.
- Another jump occurred after the SEC accepted filings for spot ETH ETFs (Form 19b-4).
These patterns reflect strong speculative anticipation ahead of regulatory milestones.
Isolating ETF Demand From Basis Trading
By normalizing spot ETF assets under management against CME Bitcoin futures OI, we can isolate true organic demand from hedged positions.
Key findings:
- From launch through Day 43 (March 13), ETFs accumulated roughly 200,000 BTC, indicating direct buying pressure.
- After Day 55 (April 1), ETF inflows plateaued between 825,000–850,000 BTC in custody—suggesting most new flows were offset by hedging via futures.
- Only by late May did ETF holdings break above this range decisively.
👉 See how ETF-driven demand is transforming Bitcoin’s market structure in real time.
This indicates that while initial demand was strong and unhedged, much of the subsequent flow has been part of risk-managed strategies rather than pure long-term accumulation.
Frequently Asked Questions
Q: What does TVL growth adjusted by native token price tell us?
A: It helps differentiate real economic growth from mere price appreciation. If TVL rises faster than the token price, it signals new capital entering the ecosystem.
Q: Why did Ethereum L2 activity surge after Dencun?
A: The EIP-4844 upgrade introduced cheaper data blobs, slashing rollup fees by up to 90%. Lower costs led to higher user adoption across Arbitrum, Base, and others.
Q: How much of Bitcoin ETF inflow is driven by arbitrage?
A: Data suggests most inflows since April have been hedged via CME futures, meaning they reflect basis trades rather than pure spot demand.
Q: Are long-term investors still holding Bitcoin?
A: Yes—the supply of BTC dormant for over a year remains stable, indicating strong conviction among HODLers despite short-term volatility.
Q: Why is CME’s share of ETH futures so low?
A: Perpetual contracts dominate ETH trading and are mostly offered outside the U.S. Regulatory clarity on spot ETH ETFs could boost CME adoption.
Q: Does lower transaction fee mean weaker network health?
A: Not necessarily. On Ethereum L2s, lower fees result from improved scalability and actually enable more transactions and users—signs of strength.
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