Crypto On-Chain Activity Hits New Highs Amid Price Stagnation

Bitwise reports a surge in on-chain activity despite stagnant prices in late 2025. Ethereum and layer-two transactions reached new highs, with decentralized trading volumes sometimes matching or exceeding centralized exchanges. The total stablecoin market cap surpassed $300 billion in Q4.

Market Dynamics

Ethereum activity increased significantly.
Decentralized exchange volumes surged.
Stablecoin supplies expanded notably.

Despite ETH's price falling by 29% in Q4, Bitwise suggests the disparity between rising on-chain fundamentals and declining prices could signal a bear-market bottom, similar to early 2023 trends.

Insights and Predictions

Matt Hougan of Bitwise compares current conditions to early 2023, suggesting potential for a future rebound.
Tom Lee predicts a challenging year due to tariffs and political tensions impacting risk appetite.

DeFi and Market Health

DeFi is central to the Q4 narrative, with increasing fund inflows into crypto firms.
Infrastructure firms report rising revenues amidst muted trading volumes.
Ten indicators suggest market health, including transaction counts and regulatory progress.

The Clarity Act and a new US Federal Reserve chair could influence policy affecting risk assets. Bitwise views Q4 as a period of behind-the-scenes improvement, potentially setting up a stronger 2026.