2025 Cryptocurrency Market Divergence: Why Are the Most Profitable Industries Also the Most Disappointing?

Introduction | Market Truths Revealed by a 100,000-Word Report

By the end of 2025, Messari released its annual report, The Crypto Theses 2026, which goes beyond mere market review. This in-depth analysis, spanning 100,000 words and requiring 401 minutes to read, points to a seemingly contradictory but real phenomenon:

Despite ongoing institutionalization, continuous infrastructure development, and record-high capital scales, market participants’ sentiment has plummeted to historic lows.

Using the Crypto Fear & Greed Index as a measure, November 2025 saw a drop to 10, in the “Extreme Fear” zone. But this time, the market did not exhibit the typical features of past crises—no exchange collapses, no systemic credit crashes, no core narrative bankruptcies. So, where does the real problem lie?

The Most Profitable Industry Is Being “Replaced”

A stark contrast in the Messari report hits hard:

If you participate in crypto asset allocation from a Wall Street office, 2025 is the best year in recent memory.
If you stay up late on Telegram and Discord hunting for Alpha, it might be the most painful year.

The same market presents two parallel worlds. This is not just a bull-bear switch; it signifies that the industry generating the most profits is experiencing a generational shift among participants.

The core reason: Market reward mechanisms have changed, but most participants are still using old participation methods.

In multiple past cycles, the implicit assumption in crypto markets was: as long as you work hard, get in early, and are aggressive enough, you can earn excess returns. But 2025 broke this assumption for the first time systemically:

• Most assets no longer command a premium just for “telling stories”
• High volatility no longer automatically translates into high returns
• Growth in L1 ecosystems cannot directly drive token appreciation

As a result, many participants develop a false impression: If I haven’t made money, the entire industry must be broken.

But the reality is quite the opposite— the industry is becoming more like a mature financial system, rather than a machine constantly generating speculative bonuses.

Macro Background: Why Now?

To understand the market changes in 2025, we must start from a larger context—the global government debt crisis.

Messari emphasizes a crucial chart: over the past 50 years, government debt-to-GDP ratios in major economies have shown an almost irreversible upward trend:

• Japan: 236.7%
• USA: 120.8%
• France: 113.1%
• UK: 101.3%
• China: 88.3%
• India: 81.3%
• Germany: 63.9%

This is not a failure of individual governance but a common outcome across different systems, political structures, and stages of development.

When debt grows faster than economic output, the system can only maintain stability through three means: inflation, prolonged low real interest rates, or financial repression. Whichever path is chosen, the costs ultimately fall on savers.

This is the meaning behind Messari’s most restrained yet weightiest statement: “When debt grows faster than economic output, the costs fall most heavily on savers.”

In 2025, more and more people are realizing this for the first time. They discover:

• Working hard ≠ preserving wealth
• Saving behavior itself is continuously shrinking
• Asset allocation becomes significantly more difficult

Market sentiment collapse is not caused by the crypto industry itself but by a shaken confidence in the entire financial system. The crypto market is simply the first to perceive this impact.

Misreading Cryptomoney: It Doesn’t Promise High Returns

This is a point Messari repeatedly emphasizes but is easily misunderstood. The core value of cryptocurrencies is not “promising higher returns,” but rather:

• Rules are predictable and not subject to arbitrary changes by a single institution
• Assets can be self-custodied
• Value can be transferred across borders without permission

In short, it offers not a “money-making tool,” but: in a world of high debt and low certainty, it re-empowers individuals with monetary sovereignty.

This also explains why extreme pessimism in sentiment actually indicates that more and more people are realizing the true problems of the old system.

BTC’s Victory: Not Because It Won, But Because It Was Chosen

After confirming the structural change in the market, a question arises: Why is only BTC regarded as “real money”?

Messari’s answer is exceptionally clear: BTC is no longer in the same competitive dimension as other crypto assets.

Money is not a technical issue, but a consensus issue

This is the first key to understanding BTC’s victory. “Money is a social consensus, not a technical optimization problem.” — Money is not about “who is faster,” “who is cheaper,” or “who has more features,” but about who is long-term, stably regarded as a store of value.

Data speaks: Capital flows over three years

From December 1, 2022, to November 2025:

• BTC increased by 429%
• Market cap grew from $318 billion to $1.81 trillion
• Entered the top ten globally

More importantly, relative performance: BTC dominance (BTC.D) rose from 36.6% to 57.3%. In a cycle where “theoretically, altcoins should be skyrocketing,” capital continued to flow back into BTC. This is not a coincidence in market trends but a reclassification of assets by the market.

According to the latest data, the current BTC price is $92.16K (as of January 12, 2026), with a market share of 55.98%, a significant increase from a year ago.

Institutional consensus: ETFs, Dats, and reserves

Messari’s evaluation of ETFs seems restrained but is extremely weighty. Bitcoin ETFs are not just “additional buying pressure”; they fundamentally change who is buying, why they are buying, and how long they can hold:

• ETFs turn BTC into a compliant asset
• Dats (Digital Asset Vaults) embed BTC into corporate balance sheets
• National reserves elevate BTC to a “strategic asset” level

When BTC is held by these institutional roles, it is no longer a “high-volatility asset that can be discarded at will,” but becomes a monetary asset that must be held long-term and cannot afford mistakes.

Once money is treated this way, it’s hard to go back.

The “boring” nature of BTC itself is a strength

This may be the most counterintuitive point:

• No application-layer stories
• No narrative rotations
• No ecosystem explosions
• Not even “new things”

But precisely because of this, it perfectly embodies all the characteristics of “money”:

• Does not rely on future promises
• Does not need growth narratives
• Does not require teams to deliver continuously

It only needs to not make mistakes. In a high-debt, low-certainty world, “not making mistakes” itself becomes a scarce asset.

The Dilemma of Layer 1: Positioning, Not Competition

Once BTC’s monetary status is established, an unavoidable question arises: What is left of Layer 1?

The brutal reality revealed by market cap distribution

By the end of 2025, the entire crypto market cap is about $3.26 trillion:

• BTC: $1.80T
• Other L1s: about $0.83T
• Remaining assets: less than $0.63T

Approximately 81% of crypto assets are valued by the market as “money” or “potential money.”

This means the valuation of L1s is no longer based on “application platforms,” but on “whether they qualify as money.”

The divergence between data and valuation

Excluding anomalously high revenue cases like TRON and Hyperliquid, the data is stark:

L1s’ overall revenue continues to decline, but valuation multiples keep rising:

• 2021 P/S: 40x, annual revenue $12.3B
• 2022 P/S: 212x, annual revenue $4.9B
• 2023 P/S: 137x, annual revenue $2.7B
• 2024 P/S: 205x, annual revenue $3.6B
• 2025 P/S: 536x, annualized revenue $1.7B

This is a divergence that cannot be reasonably explained by “future growth.”

The lesson from Solana: Ecosystem explosion ≠ Doubling of returns

SOL is one of the few L1s that outperformed BTC in 2025. But Messari highlights a devastating fact:

• SOL ecosystem data grew 20-30 times
• Price only outperformed BTC by 87%

As of January 12, 2026, SOL’s price is $143.01, with a 24-hour increase of +5.04%. Yet, even so, its relative performance remains far below the growth in ecosystem data.

To achieve significant excess returns over BTC, L1s need ecosystem explosions at a magnitude level. This is not “not enough effort,” but that the return function has been rewritten.

The dilemma of Layer 1

Before BTC’s clear monetary status, L1s could tell stories of “becoming money in the future,” and the market was willing to pay premiums for this possibility.

Now that BTC is solidified, the market is no longer willing to pay the same premium for “being the second money.” So L1 faces a tougher question: If you’re not money, then what are you?

Losing the “monetary narrative” protection means all valuations must now accept reality constraints.

Conclusion: The Dialogue Between Sentiment and Structure

The market sentiment in 2025 does not stem from systemic failure but from a misalignment of participant identities and market reward mechanisms.

This is a sober realization, not a collapse. The market is telling everyone:

• Sentiment collapse ≠ industry failure
• Increased pain ≠ loss of value
• Old participation methods ≠ forever valid

The most profitable industries are undergoing a profound restructuring. Those who can recognize this change and adjust their participation identities and strategies accordingly will gain an advantage in the next cycle. Those still clinging to old logic will only feel increasing confusion.

Messari’s report essentially answers a fundamental question: In an era where monetary systems are continually failing, what truly qualifies as “money”? The market’s answer lies in data, capital flows, and shifts in market share.