Entering 2025, the cryptocurrency market was once brightly optimistic when Donald Trump — the president seen as 'friendly to crypto' — officially took office. Investors hoped for a 'new spring' for digital assets, especially with the Trump administration promising many loosening and supportive policies.
However, the reality in Q1 2025 was harsher than ever: DeFi fell into crisis, altcoins plummeted heavily, and memecoins 'shattered' just weeks after their explosion. A quarter full of losses marked an early disillusionment for those hoping for a strong bull run.
DeFi 'evaporated' 48 billion USD: Ethereum suffered the most damage.
Data from CoinGecko shows that the total value locked (TVL) in #defi decreased by 27.5%, equivalent to 48.9 billion USD in just three months. The total market TVL plummeted from 177.4 billion USD (end of Q4 2024) to 128.6 billion USD by the end of Q1 2025.
Ethereum — the largest DeFi ecosystem — is the hardest-hit victim, losing 35.4% of its TVL, from 112.6 billion USD down to 72.7 billion USD. The price $ETH also 'vanished' from 3,336 USD to just 1,805 USD, erasing all gains made throughout 2024.
Other prominent ecosystems like Solana and Base also did not escape the general downtrend, losing 23.5% and 15.3% TVL, respectively.
A rare bright spot is BeraChain — an emerging blockchain that has grown strongly to 5.2 billion USD, ranking among the top 6 largest DeFi platforms globally.
Trading volumes on CEX and DEX also plummeted.
In addition to TVL, spot trading volume on centralized exchanges (CEX) also dropped sharply by 16.3%, down to just 5.4 trillion USD in Q1 2025.
In the DEX space, Solana continues to hold a dominant position, accounting for 39.6% of the total on-chain trading volume, maintaining its leading position since the end of 2024.
Political memecoins: From expectation to disaster.
Just before Trump took office, a wave of political memecoins exploded, led by tokens like TRUMP, MELANIA, and LIBRA (inspired by Argentine President Javier Milei). The community flocked to the pump.fun platform to create and 'ride the wave' of these tokens.
However, the joy was short-lived. LIBRA collapsed after a rug-pull, leaving investors empty-handed and triggering a wave of skepticism across the entire memecoin market. The number of new tokens created on pump.fun sharply declined, indicating a widespread cautious sentiment.
Bitcoin remains strong during the crisis.
Although Bitcoin also could not escape the general market impact and performed worse than gold or US Treasury bonds in Q1 2025, the dominance rate of BTC surged to 59.1%.
This is a clear sign that investors are withdrawing from risky assets like altcoins and returning to Bitcoin as a safe haven. BTC remains the backbone of the entire market, at least during periods of high volatility.
Trump is friendly, but crypto does not operate on slogans.
The expectation that the Trump administration's friendliness would blow new winds into the market quickly faded. Internal factors such as weak liquidity, negative market sentiment, and fraud in DeFi completely dominated price movements.
The total market capitalization of crypto has evaporated by 633.5 billion USD, dropping from a peak of 3.8 trillion USD at the beginning of the year to the lowest level in three years. Clearly, political slogans are not enough to revive a market starving for real value and transparency.
Lessons from Q1 2025: Crypto needs value, not just expectations.
The first quarter of 2025 serves as a costly reminder to the entire market that:
Friendly policies do not equate to a bull run.
DeFi is not yet robust enough to withstand a trust shock.
Memecoins are merely speculative tools, easily turning into financial traps.
Bitcoin remains the most sustainable choice in times of instability.
Contacting the crypto market and Binance users:
The decline of DeFi and altcoins in Q1 2025 serves as a warning to users on Binance:
You should diversify your portfolio.
Prioritize high liquidity and stable asset foundations like BTC.
Be cautious when participating in trend-driven tokens or those lacking real value.
Binance always provides analytical tools and risk alerts to help investors make smarter decisions, even in turbulent times like the present.
Risk warning:
The cryptocurrency market always carries significant volatility. The information in this article should not be considered investment advice. Please carefully consider and research before making decisions. Crypto is not suitable for everyone — investing could lead to total loss of capital.