Internet Computer's Recent Surge: Is This a Sustainable Bull Case?

The Internet Computer (ICP) has surged in 2025, fueled by optimism around blockchain infrastructure adoption and DeFi momentum. But as the crypto market grapples with volatility and security risks, investors must ask: Is this bull case sustainable?

Blockchain Infrastructure Adoption: A Foundation for Growth

The Internet Computer's appeal lies in its unique architecture, which positions it as a scalable, user-friendly alternative to Ethereum and Solana. While specific DApp growth metrics for ICP remain sparse, the broader blockchain ecosystem shows a clear shift toward infrastructure that prioritizes scalability and developer flexibility. For instance, Polygon's DeFi lending TVL hit $192.88 billion in Q3 2025, surpassing Ethereum, as projects like Aave and Lido dominate lending and staking markets, according to a
Coinotag report. This trend underscores the importance of infrastructure that supports high-throughput, low-cost transactions-a niche where ICP's "canister" smart contracts could thrive, as noted in a
Defiant analysis.

However, DApp engagement across the sector has declined by 22.4% in Q3 2025, with SocialFi and AI DApps losing traction, according to a
Coinotag report. This suggests that while infrastructure adoption is growing, user retention remains a challenge. For ICP to sustain its bull case, it must demonstrate not just technical scalability but also a compelling ecosystem of applications that drive consistent user activity.

DeFi Momentum: TVL Growth and Institutional Interest

DeFi TVL reached a record $237 billion in Q3 2025, driven by institutional flows into stablecoins and real-world asset (RWA) tokenization, according to a
Coinotag report. Bitget Wallet's stablecoin TVL surged 523% in Q3, reflecting a growing appetite for transparent, onchain yields, according to a
Coinedition report. While ICP's direct contribution to this TVL is unclear, its focus on decentralized governance and interoperability aligns with the sector's shift toward institutional-grade solutions.

Ethereum and Solana remain dominant, with Ethereum's TVL at $119 billion and Solana's at $13.8 billion, according to a
Yahoo Finance report. However, Solana's 33% TVL decline highlights the fragility of ecosystems reliant on speculative assets like memecoins. ICP's emphasis on long-term, utility-driven DeFi projects-such as tokenized real estate or cross-chain lending-could position it as a more resilient alternative.

Challenges: Security Risks and Market Volatility

The DeFi sector's growth is shadowed by significant risks. In November 2025 alone, rug pulls and exploits caused a $12 billion TVL drop, according to a
Lookonchain report, with the Balancer protocol losing $128.6 million in a single incident, according to a
Wral report. These events erode investor confidence and highlight the need for robust security frameworks-a domain where ICP's "threshold cryptography" and decentralized governance could offer advantages.

Moreover, while DeFi TVL grew 41% in Q3 2025, daily active wallets fell by 22%, indicating a shift from retail to institutional participation, according to a
Coinotag report. This trend could limit ICP's growth if it fails to attract a broad user base. Cardano's struggles, with a TVL of just $262 million despite its potential, serve as a cautionary tale about the importance of user adoption, according to a
CryptoBasic report.

Conclusion: A Bull Case with Caveats

The Internet Computer's surge is rooted in its infrastructure strengths and the broader DeFi TVL boom. However, sustainability hinges on three factors:
1. User Retention: ICP must build a sticky ecosystem of DApps that drive consistent engagement.
2. Security: Proactive measures against exploits and rug pulls are critical to maintaining trust.
3. Institutional Adoption: Partnerships with stablecoin platforms and RWA tokenization projects could unlock new TVL streams.

While the bull case is plausible, investors should monitor ICP's ability to address these challenges. The DeFi landscape is evolving rapidly, and only those chains that balance innovation with resilience will thrive.