Institutional Growth, AI, and DeFi
The cryptocurrency market began in 2025 with strong momentum, reaching a peak market value of $3.76 trillion on January 7.
The surge was driven by the U.S. government’s pro-Crypto policy, including discussions about national crypto protected areas, Stablecoin regulations and tax benefits for digital assets.
However, the market faced a downturn later this month, triggered by DeepSeek’s AI breakthrough, which raised concerns about overvalued U.S. tech stocks and broader market corrections.
Despite these volatility, several major cryptocurrencies accounted for a large amount of gains, while some others fell due to liquidity and shifts in investor sentiment.
Best and underperforming assets
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Excellent performance:
- XRP (+47.8%): Increased network activity by decentralized exchange (DEX).
- Solana (SOL, +24.7%): The rise in DEX trading volume and Memecoin speculation attracted liquidity.
- Bitcoin (BTC, +11.7%): Institutional interests are growing regarding the discussion of Bitcoin included in national reserves.
- ChainLink (link, +9.6%): Adoption of its Oracle services in multiple blockchain networks increased.
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Poor performance:
- Ethereum (ETH, -8.2%): Liquidity flows to Solana’s growing Defi ecosystem affects ETH’s performance.
- Avalanche (Avax, -9.3%): Increased short selling pressure leads to bearish outlook.
- BNB (-3.57%) and TRX (-6.26%): Investors favor higher growth assets like Solana.
Institutional adoption and encryption ETF
One of the most important developments in February was the rise in interest in exchange-traded funds (ETFs) for cryptocurrencies other than Bitcoin and Ethereum.
After former SEC chairman Gary Gensler left, 47 active Crypto ETF documents appeared, covering 16 different asset classes. It is believed Binance’s February study.
Solana’s continued dominance in DEFI and DEX trading
Solana’s rapid growth in trading volumes in diversified financing (DEFI) and DEX remains a key trend worth paying attention to. For four consecutive months, Solana surpassed Ethereum in DEX activities, marking a major shift in the Defi landscape.
According to January, Solana-based DEX had transaction volumes of more than $258 billion, more than 200% higher than Ethereum’s $86 billion in January, according to January Encrypted Street.
Memecoin speculation has largely driven the surge, with tokens like $TRUMP and Melania generating billions of dollars in transaction volume. In addition to Memecoins, Defi platforms like Jupiter, Raydium and Pump.Fun have seen strong engagement, which has strengthened Solana’s position as a leader in the Defi space.
Cryptocurrency Market Trends February: Institutional Growth, AI and Defi
Regulatory development and market sentiment
February will be shaped by ongoing regulatory discussions about stablecoins and tax policies. Legislators are currently debating new compliance requirements for Stablecoin issuers and potential tax exemptions for digital assets issued in the U.S. These policy decisions may affect investor behavior and long-term market stability.
In addition, the US Treasury Department has proposed new regulations for the DEFI platform, which classifies some brokers as brokers if they provide trading front-end services.
Although custodial brokers must comply this year, the Defi platform must meet the new standards by 2027. This shift could reshape how decentralized platforms work and identify future adoption trends.
