The first quarter of 2025 marked a turning point for blockchain markets. As price swings lost their pull and users prioritized cost-efficiency, behavior across networks like Ethereum, TRON, and Bitcoin began to reflect a clear shift toward practicality.
This report looks at blockchain activity in Q1 2025 through three key lenses—on-chain engagement, wealth distribution, and user behavior—to highlight where utility is growing and where old assumptions are falling away. From Ethereum’s slowdown to TRON’s steady rise as a stablecoin hub and a broader move toward simpler chains like Bitcoin and Litecoin, the market is clearly realigning around function over hype.
Key Takeaways
- Ethereum usage dropped sharply as volatility and fees deterred active use amid signs of retail capitulation.
- TRON solidified its role as a low-cost settlement layer for stablecoins.
- Deposit address reuse patterns suggest diversification toward Bitcoin, Litecoin, and even DASH.
- Wealth distribution metrics indicate a modest shift toward decentralization on Ethereum.
Ethereum: Market Volatility Erodes On-Chain Activity
Ethereum recorded one of its weakest quarters in recent memory. Transaction turnover dropped 24.5% YoY, while USDT-ETH volumes fell by 39% compared to Q1 2024. ETH’s average price declined from $3,437 in Q1 2024 to a low of $1,806 in Q1 2025, reflecting not just devaluation but collapsing volatility—typically the lifeblood of Ethereum’s on-chain dynamics.
Our market data also revealed a notable flattening in Ethereum’s Gini coefficient from 0.6573 in January to 0.6603 in April. This stall in wealth centralization coincided with a 64% price drop, the February Bybit hack, and U.S. macroeconomic pressures. The result: whales offloaded, retail holders capitulated, and some degree of redistribution followed. While the share of ultra-large holders declined slightly in number, their portion of total supply increased to 74.97%, which underscores a consolidation trend.
Sentiment data supported this: retail addresses in the 0.1–1 ETH range dropped in April alone. With Ethereum’s MVRV ratio plunging to 0.58 by April and NUPL hitting -0.86, market signals clearly pointed to deep undervaluation and investor pessimism.
Network activity mirrored this caution. The 30-day moving average of active addresses fell from ~508,000 in February to ~446,000 in April. Passive address liquidation and a slight uptick in new address creation hinted at both capitulation and speculative re-entry, but with little conviction.
Ethereum’s decline is not just a price story but a reflection of users rationally disengaging when cost outweighs utility. As Layer 2s and alternative chains offer cheaper, faster options, Ethereum must increasingly justify its premium.
TRON: The Default Chain for Stablecoin Utility
Over the past year, TRON has quietly established itself as one of the most actively used blockchains in the industry, and not through flashy headlines, but through sustained, data-backed growth. Between early 2024 and mid-May 2025, the network’s average daily transaction volume has nearly doubled. Even more telling, this growth has proven to be sustainable: since February 2025, TRON has consistently processed over 8 million transactions per day, with only a handful of dips.
A core driver behind this scale is TRON’s dominance as the go-to chain for Tether (USDT) transfers. Almost half of all its platform transactions in Q1 2025 were USDT on TRON. In April, over $70 billion in USDT circulated on the TRON network, accounting for more than 99% of the chain’s total stablecoin market cap. This level of concentration is a reflection of how effectively TRON has positioned itself as the cheapest and most reliable option for stablecoin payments.
That utility is translating into broader ecosystem growth. In Q1 2025, TRON saw a 3.5% increase in market cap, reaching $22.7 billion, which demonstrates not only scale but also a sustainable business model.
Yet growth has not been without complexity. TRON’s DeFi TVL in USD terms declined sharply—down 36.7% QoQ to $4.7 billion—as TRX’s price dropped and liquidity shifted to other ecosystems. But that doesn’t tell the whole story. Daily DEX volume actually rose 14.2% QoQ, with SUN V3 commanding nearly 90% of trading activity. What we’re seeing is not a decline in engagement, but a potential rebalancing in how users interact with TRON's DeFi ecosystem, prioritizing transactions and liquidity efficiency over capital lock-up.
Looking ahead, TRON is leaning into productization: gas-free USDT transfers are in development, and the introduction of smart wallets aims to streamline user onboarding and wallet usability. Combined with a growing list of ecosystem partnerships, TRON is actively working to transition from being just a “payments chain” to a mainstream blockchain platform optimized for speed, efficiency, and accessibility.
Address Reuse Data Signals Functional Diversification
Deposit address reuse remains one of the clearest behavioral signals across centralized infrastructures. When addresses are reused frequently, it typically reflects consistent user demand for certain networks—either due to reliability, low fees, or broad acceptance.
Between Q1 2024 and Q1 2025, we observed a 41% drop in overall deposit address reuse across monitored platforms. While this may partly reflect improved wallet hygiene or platform-side changes, the relative shifts between chains reveal a deeper trend: users are diversifying toward functional, cost-efficient rails.
USDT on TRON (USDT-TRX) continues to dominate as the most reused deposit format, but its reuse fell by 33% year-over-year. This decline suggests that while TRON remains heavily used, its once-unquestioned dominance in stablecoin routing is beginning to erode—likely due to fee competitiveness from other networks and increased scrutiny of TRON-based operations.
In contrast, Bitcoin and Litecoin reuse both increased by over 35%, indicating a renewed role for these more established, simpler chains. Their rise reflects a shift toward “good enough” infrastructure: networks that are secure, predictable, and broadly integrated into fiat on/off ramps.
Interestingly, DASH re-entered the top 10 reused formats, marking its first such appearance in several quarters. This niche resurgence points to growing demand for near-instant, low-cost transfers, particularly among privacy-conscious users or small-scale remittance corridors.
The decline in the capitalization of the Binance stablecoin (BUSD) began in early 2023, when its capitalization fell by almost 30%, falling to $16.5 billion. The catalyst was regulatory pressure. In February 2023, the New York State Department of Financial Services (NYDFS) ordered Paxos to completely stop issuing new BUSD tokens. After that, the coin's supply decreased from 16.1 billion to 12.7 billion.
On August 31, 2023, Binance officially announced the end of support for BUSD in February 2024 and sent clients a notice about the need to convert the stablecoin into other coins.
Closing Thoughts
Our Q1 analysis shows that blockchain users are acting with increasing economic rationality. Volatility alone no longer drives engagement. Instead, cost, reliability, and clear use cases are determining behavior.
Ethereum’s long-term potential remains, but it faces increasing pressure to prove its value in a competitive, utility-first market. As liquidity consolidates into fewer hands and smaller players demand better ROI per transaction, platforms that prioritize real-world usability—not just narrative strength—will define the next growth cycle.
In this new phase, blockchain success will hinge not on ideological loyalty or developer ecosystems, but on economic sensibility and practical design.
In short: pragmatism is in, posturing is out. The narratives that once fueled user onboarding—“DeFi revolution,” “Web3 sovereignty,” or “Ethereum as ultrasound money”—are giving way to harder questions: What does this cost me? Will it work every time? Does it solve my real-world problem?
This doesn’t mean Ethereum is out of the game, but it does mean the game has changed. To remain relevant, dominant ecosystems must adopt a service-provider mindset, not just a protocol-first one. Chains that succeed in this era will be those that blend infrastructure credibility with economic ergonomics. Utility is no longer a bonus feature. It’s the minimum requirement.
Investing in cryptocurrencies is associated with financial risks, it is recommended to consult a specialist before making a decision.
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