Layer-1 Tokens Show Negative Trends in 2025
- Castle Labs reports negative trends for Layer-1 tokens in 2025.
- Bitcoin BTC +0.13% and BNB BNB +2.46% Chain gained relative market strength.
- Institutional focus shifts to BTC and ETH, affecting L1s.
Castle Labs released data indicating most Layer-1 tokens experienced negative performance in 2025, with notable declines in HYPE, ETH, and SOL, except for gains in BNB and TRX.
This trend reflects a shift in capital towards Bitcoin, Ethereum ETH +0.35% , and profit-generating protocols, impacting Layer-1 projects’ market standing and investor sentiment.
Castle Labs reports that major Layer-1 tokens are experiencing negative performance year-to-date. This reflects changes in the crypto markets, with tokens like ETH and SOL registering significant declines in 2025.
Key players such as Ethereum Foundation and Solana SOL +0.10% Labs face challenges as market dynamics shift. The focus now turns towards Bitcoin, Ethereum, and other revenue-generating protocols showing more resilience.
The report indicates a noticeable rotation of capital and users from many Layer-1 ecosystems to Bitcoin and BNB Chain. This has created considerable repercussions for lesser-capitalized tokens.
“The market has shifted to rewarding revenue-generating protocols, especially stablecoin issuers and derivatives platforms,” notes an analyst from OAK Research.
Despite declining metrics, platforms like BNB Chain show growth, providing an interesting contrast. The institutional preference for primary cryptocurrencies seems to dictate recent investment behaviors.
Historical data suggests a trend where Layer-1 tokens experience depreciation notwithstanding strong developer communities. Strong tech development continues, though tokenomics and market factors influence price metrics negatively.
