Cryptocurrency Market in 2025: From Speculative Euphoria to Fundamental Questions About Money

Introduction: How can the market fall when the system isn’t collapsing?

In November 2025, the Crypto Fear & Greed Index reached a level of 10 – a historically extreme signal of fear. However, this time the landscape differs from previous crises. Exchanges haven’t failed, infrastructure hasn’t collapsed, and market capitalization remains stable. The paradox is striking: negative sentiment is occurring in an environment that objectively does not deserve such a rating.

Messari’s annual report, comprising over 100,000 words, offers an unexpected perspective: the breakdown in sentiment does not reflect a true industry collapse. Rather, it is a symptom of deeper structural changes in how the market functions and who has the right to profits.

When a Wall Street capitalist and a Telegram investor live in different worlds

For institutional capital allocators, 2025 is the golden era. ETFs provide access with minimal risk, regulatory frameworks are clarifying, and digital assets are becoming part of standard portfolios. For them, the market is working perfectly.

For participants seeking quick returns, the situation is brutal. The narrative rotation that once generated alphabetic gains has ceased to work. Most altcoins are not even performing well against Bitcoin. The link between engagement and results has broken.

This duality of experience – rather than a decline in the entire system’s value – is the real catalyst for the trust crisis.

Waves of market change: From speculative fluctuations to institutional stability

The breakdown in sentiment does not stem from a specific event but from a fundamental fluctuation in participation models. The system hasn’t changed abruptly – it has changed gradually, and its reward mechanisms have shifted toward long-term holders rather than speculators.

This is not just a normal price correction. It is a moment when most participants realize that their previous strategies – characterized by high volatility, quick rotations, and storytelling – have become unprofitable. The illusion that “if you work hard enough, you’ll earn above average” has fallen apart.

The real problem: The world’s monetary system is slipping out of control

Focusing solely on the dynamics of the cryptocurrency market still doesn’t explain the whole story. Messari, in its report, proposes a different starting point: global public debt is growing faster than economic production.

Data from 2025 shows:

• USA: 120.8% debt-to-GDP ratio
• Japan: 236.7%
• France: 113.1%
• United Kingdom: 101.3%

Regardless of political system or level of development – the same trend is everywhere. When debt exceeds growth, the system must choose between inflation, low interest rates, or financial repression. Always at the expense of savers.

2025 is the moment when more and more people are clearly realizing this for the first time. The illusion that “cash is always safe” or that “hard work will secure savings” begins to crumble.

Bitcoin didn’t win – it was chosen

In this macroeconomic context, Bitcoin’s position shifts from optional to almost obvious. BTC increased by 429% between December 2022 and November 2025, but more important is its relative dominance:

• Bitcoin’s share of market capitalization: from 36.6% to 57.3%
• Its position among global assets: entered the top 10

This is not a coincidence of growth drivers. The market is reclassifying assets – from “high risk, high potential” to “store of value, trustworthy asset.”

When Bitcoin is held by wealth funds, state reserves, and institutional investors, it ceases to be an “asset to be abandoned at any moment” and becomes a strategic resource.

Money is not an engineering problem, but a social consensus

Here, Messari makes a key distinction: money is not the one that is “fastest” or “cheapest,” but the one that is reliably treated as a store of value over time.

Bitcoin wins this race not because it has more functions. It wins because it has the least to “sell”:

• No ecosystem applications
• No technical promises for the future
• No growth narratives
• Simply – stability and predictability

In a world of high debt and increasing uncertainty, “not making mistakes” itself becomes a rare and valuable asset.

Layer 1: When the money narrative already has an answer

If Bitcoin has taken the “money” niche, what remains for Layer 1 blockchains?

Messari’s data is straightforward: 81% of the entire cryptocurrency market capitalization is valued as “money” or “potential money.” This means Layer 1 no longer competes based on technical capabilities to build applications. They compete on whether they can become money.

Most do not pass this test:

• L1 revenues decline: from $12.3B (2021) to just $1.7B (2025)
• Valuation multiples increase: from 40x (2021) to 536x (2025)

This contradiction cannot be explained by “future growth.” It signals that the market has changed its criteria – and L1s remain with their old positioning.

The example of Solana is instructive: the ecosystem grew 20–30 times, but the token outperformed Bitcoin by only 87%. To achieve significantly higher returns, L1s need an explosion of an order of magnitude. This is the new math of the market.

Summary: From sentiment through structure to money

The breakdown in sentiment in 2025 is not irrational fear. It is a rational response to structural changes in the market and the world.

Participants who learned to profit during high volatility and narrative rotation suddenly find themselves in a world where Bitcoin dominates, institutions solidify their position, and the traditional monetary system no longer offers security.

For those who diversify their portfolios, expand their investment horizons, and accept their new role in the market, 2025 is not the end. For those still playing the old game – it is a storm that will destroy their old identity as participants.

This is not a problem with the industry. It is an awakening.