2025 Crypto Inflows Reach $47B With Ethereum Leading Growth

Ethereum ended 2025 with $4.2 billion in net inflows, making it the top-performing blockchain. The network saw a total of $64.5 billion in inflows and reduced target by 5% to $60.3 billion in outflows. This performance was driven by DeFi liquidity returning to Ethereum's main network.

Arbitrum and other Layer 2 platforms experienced outflows as investors moved liquidity back to Ethereum. By late December, L2 chains represented just 13.5% of Ethereum's ecosystem economy. This shift highlighted the network's role as a central hub.

Stablecoin activity reinforced Ethereum's centrality in the crypto ecosystem. Major stablecoin issuers maintained primary liquidity, with bridging to L2s used for efficiency but not for final settlements.

Why Did This Happen?

Ethereum's dominance in 2025 was attributed to its robust infrastructure. The network's extensive bridge ecosystem enabled seamless asset transfers between chains. This infrastructure made it an attractive destination for DeFi liquidity, even as L2 solutions expanded.

Gas fees dropped to record lows in 2025, enhancing Ethereum's usability. While L2 solutions processed over 93% of transactions, Ethereum's Layer 1 retained the majority of liquidity. This dynamic allowed Ethereum to attract significant inflows, even as other chains competed for DeFi activity.

How Did Markets Respond?

Bitcoin ended 2025 down 6%, trading at $88,242. This marked the cryptocurrency's first yearly loss since 2022. Analysts attributed the decline to macroeconomic pressures and volatility around the October 10 liquidation event. Despite this, Bitcoin is expected to see a 2026 rebound driven by ETF inflows.

XRP ETFs attracted $1.15 billion in cumulative net inflows by late 2025. These funds recorded a 29-day inflow streak, indicating consistent institutional interest. XRP's price, however, did not respond to this inflow activity, trading at $1.86.

What Are Analysts Watching Next?

Analysts are closely monitoring Ethereum's long-term dominance in the DeFi space. The network's ability to maintain liquidity and attract high-value settlements is seen as a key factor in its continued growth.

Bitcoin's performance in early 2026 is expected to hinge on ETF inflows. Citi Research projected a base-case target of $143,000 for Bitcoin in 2026. This forecast was based on the assumption of $15 billion in ETF inflows and broader adoption.

Regulatory clarity and institutional participation are also being watched as potential catalysts for crypto adoption in 2026. The U.S. SEC's streamlined approval process for crypto ETFs has reduced barriers to entry. This development could lead to more products launching in the coming months.

Real-world assets (RWAs) also showed significant growth in 2025. Tokenized U.S. Treasurys and commodities accounted for $19 billion in distributed asset value. This trend is expected to continue as more institutions explore RWAs for diversification.

XRP ETF inflows have demonstrated the potential for altcoin adoption through regulated products. The funds' ability to attract institutional capital despite price volatility highlights their appeal. Analysts are watching to see if other altcoins can replicate this success.