DeFi Tokens Skyrocket in 2025, Leaving Legacy Coins (LTC, BCH, XMR) in the Dust
Move over, boomer coins—DeFi is eating crypto's lunch.
While Bitcoin maximalists were busy arguing about store-of-value narratives, decentralized finance tokens quietly staged a 2025 bull run that's rewriting the playbook. The numbers don't lie: Ethereum-based DeFi blue chips are posting triple-digit gains while Litecoin, Bitcoin Cash and Monero struggle to keep pace.
Yield farmers are laughing all the way to the (non-custodial) bank.
What's fueling the divergence? Smart money's chasing programmable yield, not digital gold 2.0. Liquidity mining incentives and composable protocols create flywheels that make staking rewards on legacy chains look like savings account interest. Meanwhile, privacy coins face regulatory headwinds while BCH's 'peer-to-peer electronic cash' vision gets outsprinted by instant settlement layers.
The brutal truth? In crypto's Darwinian ecosystem, utility beats nostalgia every time. Just ask the hedge fund managers now allocating more to governance tokens than BTC—though they'll still call it a 'hedge' to justify those management fees.
Changing behavior patterns
Crypto markets are cyclical by nature. They run without interruption 24 hours a day against a backdrop of high volatility and low liquidity which can create an emotional trading environment. In previous cycles, altcoins often moved in unison, rising as bitcoin consolidated and dropping en masse when it rose or fell.
This time, however, seems different, possibly due to the increased participation of institutions in the the industry. The rise in DeFi tokens can be attributed to increasing institutional interest in ether (ETH), which could pave the way for a search for yield with firms battling to secure the highest returns.
The same can be said for layer-2 networks. As institutions run into the Ethereum blockchain's issues with latency and efficiency, they may consider networks like Arbitrum that allow liquidity to flow from decentralized exchanges to staking protocols at a fast rate. That network's ARB token is up 15% in the past 24 hours.
Not so sanguine
Still, Petr Kozyakov, CEO at payments firm Mercuryo, said the rise in altcoins will be short-lived.
"While altcoins are also in the green with ethereum spiking past the $3,000 mark, the underlying ‘orange pill’ narrative remains steadfastly in place," he said. "Bitcoin’s growing status as a store of value is one that more and more big players and institutions are simply unable to ignore."
That's not a narrative that finds much support from Arthur Hayes, the BitMEX founder turned fund manager.
“Get ready for a monster alt season,” he told his followers on X after predicting that ETH WOULD reach $10,000 this cycle.
If Hayes’ prediction holds true, bitcoin could face short-term difficulty as liquidity will inevitably flow into the altcoin market as traders attempt to capture speculative gains. This could also be a hammer blow to the old-school crypto coins, which all lack major catalysts for a boost.
