The cryptocurrency industry has grown from a niche experiment into a maturing global market, according to VC Giant a16z’s State of Crypto 2025 report released Wednesday.
“This is the year the world came on-chain,” the authors wrote, describing a feedback loop between prices, innovation, and participation. Bitcoin holds more than half the crypto market cap, while stablecoins rival Visa in volume.
Institutions and Stablecoins Drive Structural Shift
According to the a16z report, this transformation is being fueled by major institutions and stablecoin adoption. Circle’s market cap climbed past $50 billion after its IPO.
BlackRock expanded tokenized money-market funds, and Fidelity began testing a USD-pegged stablecoin. Morgan Stanley plans to add crypto trading on E*TRADE in 2025. They join JPMorgan, Visa, Stripe, and PayPal, which are embedding blockchain rails across payments and asset tokenization.
Monthly Active Crypto Users Growth. Source: a16z
Bitcoin and Ethereum ETFs now hold more than $175 billion in on-chain assets. Publicly traded “treasury companies” such as Strategy Inc. have added billions in reserves, treating digital assets as balance-sheet instruments.
Stablecoins have become the market’s main engine. a16z estimates they processed $46 trillion in transactions last year—more than double PayPal and nearing ACH levels. Issuers like Tether and Circle now rank among the top U.S. Treasury holders, surpassing nations such as Germany and South Korea. Analysts say this could strengthen the dollar as regulatory clarity improves under the GENIUS Act and the upcoming CLARITY Act.
Stablecoin Institutional Adoption. Source: a16z
From DeFi to AI: Crypto’s Expanding Frontier
Decentralized finance now captures roughly 25% of spot trading as users migrate from centralized exchanges. Tokenized real-world assets, including Treasuries and corporate bonds, have exceeded $30 billion, while decentralized infrastructure networks such as Helium demonstrate viable revenue generation.
Blockchain throughput has reached 3,400 transactions per second—approaching credit-card scale. Solana and Ethereum’s layer-2 rollups anchor this performance, supported by advances in zero-knowledge proofs and quantum-resistant encryption.
The report spotlights the rising intersection of AI and crypto—from identity verification (17 million users on Worldcoin) to decentralized compute marketplaces hosting over 420,000 models. a16z says this convergence addresses AI’s centralization risks and opens new token-driven revenue loops: $33 billion in user fees last year produced $18 billion for projects and $4 billion flowing directly to tokenholders.
The firm predicts policy frameworks prioritizing market structure, surging stablecoin adoption, and “AI-crypto” applications anchoring the next era of internet infrastructure.
Disclaimer: For information purposes only. Past performance is not indicative of future results.
