The first half of 2025 has revealed a maturing crypto landscape — one where early euphoria is giving way to sustainable growth, structural shifts, and deeper institutional involvement. Drawing insights from Coinbase Institutional Research, this mid-year analysis unpacks key trends shaping the ecosystem through 10 pivotal charts. From total value locked (TVL) dynamics and on-chain activity to ETF flows and derivatives markets, we explore how the market is evolving beyond price speculation.
Whether you're an investor, builder, or observer, understanding these signals helps clarify where value is being created — and where momentum may be shifting.
👉 Discover how institutional adoption is reshaping crypto markets in 2025.
Core Market Fundamentals
TVL Growth Outpaces Market Cap
Rather than comparing raw TVL across blockchains, we analyze TVL growth adjusted for native gas token price appreciation. This adjustment isolates real ecosystem growth from mere token price inflation — a crucial distinction when assessing true network adoption.
Year-to-date, TVL growth has outpaced overall crypto market capitalization by 24%. Notably, newer ecosystems like TON, Aptos, Sui, and Base are leading this expansion. These networks are in high-growth phases, attracting developers and users with improved scalability and lower transaction costs.
This trend suggests that capital is not just chasing price rallies but flowing into platforms demonstrating utility and innovation.
On-Chain Activity: Fees and User Engagement
To gauge real usage, we compare May’s average daily active addresses with daily fees or revenue, both measured in standard deviations from January–April averages.
Key findings:
- Solana and Tron were exceptions — most networks saw declining fees in May.
- Ethereum L2s, particularly Arbitrum, experienced a surge in active addresses following the EIP-4844 upgrade, which drastically reduced rollup transaction costs.
- Cardano and Binance Smart Chain saw smaller fee reductions relative to declines in wallet activity, indicating weakening user engagement despite cost stability.
This divergence highlights that lower fees alone don’t guarantee adoption — compelling applications are equally important.
What’s Driving Ethereum Transaction Fees?
We analyzed spending across Ethereum’s top 50 contracts, responsible for over 55% of year-to-date gas fees.
Post-Dencun upgrade (March 2025):
- Rollup-related fees dropped from 12% to under 1% of total network fees thanks to blob transactions.
- MEV-driven activity rose from 8% to 14%, reflecting increased sophistication in block construction.
- Direct user transaction fees climbed from 20% to 36%, now the largest fee category.
Although ETH became inflationary after mid-April due to reduced staking rewards, rising market volatility and demand for high-value block space could offset inflationary pressure — especially during periods of strong on-chain activity.
Ethereum L2 Ecosystem Soars
Ethereum Layer-2 networks have seen explosive growth: TVL increased 2.4x year-to-date, reaching $9.4 billion by end-May.
As of early June:
- Arbitrum: 33% of L2 TVL
- Blast: 24%
- Base: 19%
The Dencun upgrade’s introduction of blob storage on March 13 significantly reduced data availability costs. As a result, even as TVL and transaction volumes hit all-time highs, total network fees declined — a win for scalability and user affordability.
This efficiency gain reinforces Ethereum’s position as the foundational settlement layer for scalable decentralized applications.
Bitcoin Supply Dynamics Signal Maturity
We define active BTC supply as coins moved within the past three months. This metric typically dips after local price peaks, indicating reduced turnover.
In early April, active supply peaked at 4 million BTC — the highest since H1 2021 — before falling to 3.1 million by early June. Meanwhile, the dormant supply (BTC untouched for over a year) remained stable.
👉 See how long-term holders are influencing Bitcoin's supply squeeze.
This pattern suggests short-term speculative fervor has cooled. However, consistent holdings by long-term investors signal enduring confidence in Bitcoin’s store-of-value narrative — a hallmark of market maturity.
Technical and Market Structure Trends
Cryptocurrency Correlations With Macro Assets
Using a 90-day rolling window, Bitcoin returns show moderate correlation with major macro indicators:
- U.S. equities
- Commodities
- Broad U.S. dollar index
Notably, correlation with gold remains relatively weak — reinforcing BTC’s role as a distinct asset class rather than a pure digital gold proxy.
Ethereum’s correlation with the S&P 500 (0.37) is nearly identical to Bitcoin’s (0.36), suggesting both assets respond similarly to macro sentiment. While BTC/ETH correlation dipped slightly from 0.85 in March to 0.81 in May, cross-crypto correlations remain high — typical during consolidation phases.
Liquidity Remains Strong Despite Pullback
Total average daily trading volume (spot + futures) for Bitcoin and Ethereum declined 34% from March’s peak of $111.5 billion to $74.6 billion in May. However, May’s volume still exceeded every month since September 2022 — except March 2023.
Spot Bitcoin volume surged post-ETF approval in January:
- Centralized exchange (CEX) spot volume rose 50% from December ($5.1B → $7.6B).
- Spot Bitcoin ETFs accounted for $1.2B daily, representing 14% of global spot volume.
This shift confirms ETFs are channeling institutional capital into crypto while enhancing market depth and transparency.
CME Bitcoin Futures: Institutional Footprint Grows
CME Bitcoin futures open interest (OI) has grown 2.2x since年初, rising from $4.5B to $9.7B. From early 2023 to mid-2025, it’s up 8.1x ($1.2B → $9.7B).
We attribute much of this growth to basis trading following the approval of spot Bitcoin ETFs. These products allow traditional brokers to execute arbitrage strategies entirely within regulated U.S. markets.
Perpetual contract OI also rose — from $9.8B to $16.6B — yet CME now accounts for ~30% of total Bitcoin futures OI (up from 16% in early 2023). This expanding share reflects rising institutional participation via compliant venues.
CME Ethereum Futures Gain Traction
CME ETH futures OI is nearing all-time highs. Still, perpetual contracts dominate — representing 85% ($12.1B)** of total ETH OI as of June 1, compared to just **8% ($1.1B) for CME.
Two catalysts drove recent OI spikes:
- The Dencun upgrade on March 13
- The SEC’s approval signal for spot Ethereum ETFs (via 19b-4 filing)
Traditional fixed-term futures on centralized exchanges remain popular and now rival CME’s ETH OI in size — showing strong demand for regulated expiry products ahead of potential ETF launches.
Isolating CME Basis Trading Impact on BTC ETF Flows
Normalizing CME Bitcoin OI against total spot ETF market cap reveals that much of the early ETF inflow was driven by hedged basis strategies.
After ETF approval:
- BTC held in ETF trusts grew by ~200,000 BTC by March 13 (Day 43), indicating directional buying.
- Since then, holdings have fluctuated between 825K–850K BTC, only breaking out strongly in late May.
This stabilization suggests the initial wave of arbitrage-driven demand has settled. The subsequent breakout may reflect growing organic investor interest — a positive sign for sustainable demand.
Frequently Asked Questions
Q: What does TVL growth outpacing market cap indicate?
A: It suggests that real economic activity — not just speculation — is driving value into blockchains. Networks like Base and Arbitrum are seeing adoption due to lower costs and better UX.
Q: Why did Ethereum L2 fees drop despite higher usage?
A: The Dencun upgrade introduced blob transactions, reducing data storage costs for rollups by over 90%. This allowed L2s to scale efficiently without passing high fees to users.
Q: How do CME futures reflect institutional interest?
A: Rising open interest on regulated U.S. exchanges like CME signals growing participation from traditional finance players who prefer compliant instruments over offshore derivatives.
Q: What does stable dormant BTC supply mean?
A: Long-term holders aren’t selling, even during price rallies. This "HODLing" behavior reduces circulating supply and can support price resilience over time.
Q: Are ETFs changing crypto liquidity?
A: Yes. Spot Bitcoin ETFs have added $1.2B in daily trading volume and attracted institutional capital that previously avoided crypto due to custody or regulatory concerns.
Q: Could an Ethereum ETF boost CME futures?
A: Likely. Just as Bitcoin ETFs increased CME BTC OI, a spot ETH ETF could accelerate institutional adoption of CME Ethereum derivatives through similar basis trading strategies.
👉 Explore the future of regulated crypto investing with next-gen financial tools.