Bitcoin rose to $126,000 in 2025, and Ethereum edged to close $5,000, however this was a difficult yr for cryptocurrency markets.
And lots of initiatives in the layer 1 (L1) blockchain ecosystem skilled widespread declines.
The widespread sell-off noticed a number of high-profile networks publish steep losses, this coming regardless of some main wins.
Key amongst these are regulatory developments, institutional curiosity and broader ecosystem progress.
A yr of ache for prime L1 tokens
Sui, Avalanche, and TON suffered the most extreme drawdowns amongst prime L1s.
Primarily, it’s a results of investor warning amid shifting capital flows towards extra established or area of interest narratives.
Information from Fortress Labs has outlined the broad underperformance of L1 tokens all through 2025.
Whereas some privacy-focused or legacy chains held floor, the majority confronted vital strain.
Notable declines included Hyperliquid (HYPE) down 6.5%, Ethereum (ETH) 15.3%, and Solana (SOL) 35.9%.
The sharpest drops got here from newer high-throughput networks.
Sui (SUI) fell 67.3%, Avalanche (AVAX) 67.9%, and TON 73.8%. These losses occurred in opposition to a backdrop of strong on-chain exercise in some circumstances, similar to rising complete worth locked and transaction volumes.
Nevertheless, market sentiment favoured selective allocation, with capital rotating away from speculative L1 bets.
Elements contributing to the downturn included competitors from Layer 2 scaling options, delayed adoption in key sectors like gaming and DeFi, and broader risk-off behaviour in altcoins.
Smaller L1 chains, specifically, misplaced site visitors to extra mature ecosystems, exacerbating worth strain.
BNB and TRON bucked the development
Amid the L1 sector’s struggles, Binance Coin (BNB) and Tron (TRX) stood out as uncommon outperformers.
The BNB token has posted beneficial properties of simply over 18% YTD, having gone parabolic as the worth hit a brand new all-time excessive above $1,300.
TRON additionally confirmed resilience, with slightly below 10% return in 2025.
BNB’s resilience stemmed from its deep integration with the Binance ecosystem, the world’s largest cryptocurrency alternate.
Key strengths embrace deflationary tokenomics via common coin burns, which cut back provide and assist worth stability, alongside utility in buying and selling payment reductions, staking, and governance inside Binance Good Chain.
The chain’s excessive exercise benefited from institutional partnerships and expansions into DeFi and NFTs, as did digital asset treasury methods.
These developments and different elements may form the BNB worth outlook in 2026.
TRX, equally, demonstrated stability pushed by Tron’s dominance in stablecoin transfers and low-cost transactions.
Memecoin exercise and the community’s concentrate on high-throughput purposes, significantly in content material sharing and decentralized leisure, helped bulls.
Nevertheless, Tron’s income explosion, fueled by USDT dominance, supplied a buffer for consumers as volatility hit friends.in opposition to market volatility.
Market outlook: Sectors to look at in 2026
Regardless of the 2025 downturn for a lot of L1 tokens, broader crypto narratives painted a extra nuanced image.
In line with CoinGecko’s current evaluation of worthwhile crypto sectors in the previous yr, privateness cash and real-world asset cash confirmed outstanding traction.
Actual World Property (RWA) emerged as the top-performing sector with common returns of practically 186% year-to-date.
Driving this uptick has been tokenization of conventional property like Treasuries and personal credit score. Apparently, the L1 class as an entire ranked second with round 80% common beneficial properties.
Privateness cash similar to Zcash and Monero exploded to push the section into the inexperienced.
One other sector that witnessed notable beneficial properties is the “Made in USA” section, which boasted about 30% YTD as of December 26, 2025.
Nevertheless, Memecoins, AI tokens, DePIN and GameFi are all on observe to finish the yr in the purple.
Heading into 2026, analysts anticipate a cautiously optimistic setting for cryptocurrencies.
Anticipated rate of interest cuts may improve liquidity for danger property, whereas advancing tokenization and stablecoin adoption might bolster infrastructure performs.
For L1 tokens particularly, differentiation via specialised use circumstances may spur restoration.
In the meantime, institutional inflows, regulatory readability, and renewed concentrate on fundamentals might favour established cash.
