State of crypto 2025 by a16z. And a closer look at what they’re not telling you.

Andreessen Horowitz (a16z) recently released its State of Crypto 2025 report, declaring that this year marks the moment crypto has officially gone mainstream. It’s a flashy, data-heavy presentation designed to signal triumph: adoption is up, infrastructure is ready, institutions are joining, and the future looks tokenized. But behind the polished visuals and aggressive growth curves lies a much more complex story.

Let’s break down the report through a critical lens and look at what’s left unsaid, what’s overstated, and where the crypto space still faces major challenges.

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Inflated metrics and overhyped adoption

The report celebrates a massive user base, citing 716 million global crypto holders and 40–70 million active users. But a deeper look reveals contradictions.

The number of truly active onchain participants, those making actual transactions, has declined year-over-year by 18%. This undermines the narrative that usage is booming. Many of those 716 million may simply hold a few tokens on centralized exchanges or via custodians, doing little more than checking the price every now and then.

Similarly, the report touts $46 trillion in stablecoin transaction volume in the past year. But once adjusted to remove internal exchange movement and known wash trading, the figure drops to around $9 trillion. That’s still big, but it’s an important reality check. Inflated numbers make for better headlines, but they can mislead about real adoption and usage.

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The silences are louder than the headlines

While the report highlights all the positives, it’s striking how little attention is paid to the negative side of crypto’s evolution.

There's no serious discussion of NFTs, once a central narrative. The collapse of trading volumes and widespread abandonment of NFT-based games or metaverse experiments is ignored. Instead, the report vaguely refers to a "shift toward collecting."

Likewise, the explosion of memecoins, over 13 million launched in 2025 alone, is treated as a fun fact, not a red flag. These tokens often exist only to pump and dump. The report doesn’t mention how many of those ended in rug pulls, failed launches, or outright scams.

This selective storytelling matters. It’s easier to claim crypto is maturing if you skip the parts where it’s still chaotic, speculative, or outright toxic.

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Centralization wrapped in decentralization branding

a16z brands itself as a backer of open, decentralized infrastructure, but some of the projects it champions raise serious questions.

Take Solana, lauded in the report for its low fees and high throughput. True, but Solana has faced repeated outages and still has much of its staking power concentrated in a few validators. That’s not exactly a model of decentralization.

Or look at Worldcoin, cited as proof that decentralized identity is here. It may be biometric and blockchain-based, but it's also controversial, centralized in decision-making, and riddled with privacy concerns.

There’s a disconnect between the ideals the report claims to support (open networks, user control, censorship resistance) and the real-world examples it highlights (centralized control, heavy investor backing, opaque governance).

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The token economy is still a mirage in many areas

The report frames tokens as the new building blocks of the internet. But it skips over the fundamental weakness in most token models: they don’t actually do anything useful.

Outside a few exceptions like Ethereum gas or governance staking in a handful of protocols, most tokens are purely speculative. They’re more like early equity coupons than functional tools. Many DAO tokens lack real power. DePIN networks (like decentralized storage or computation) often fail to attract sustained demand beyond investor-subsidized bootstrapping.

And while the report mentions the rise of tokenized real-world assets (RWAs), it glosses over the fact that much of that activity is experimental or limited to institutions, not everyday users.

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Over-engineering the tech, underestimating the UX

One of the report’s strongest claims is that the infrastructure is finally ready. Transaction throughput is up, gas fees are down, bridges are more stable, and ZK tech is real. All of that is true.

But the assumption seems to be: “If you build it, they will come.” That’s a mistake.

Most users still find crypto confusing and risky. Wallet UX remains unintuitive. Concepts like bridging, staking, slashing, or L2 settlement are not friendly to average users. The report celebrates builders, but never asks why more users aren’t using the tools they’ve built.

For mass adoption, infrastructure isn't enough. You need design thinking, safety nets, onboarding flows, and trust layers. The report is silent on that.

Let’s pause here and ask: what would a real path to mainstream crypto look like?

It might not start with more TPS or new zkVMs. Instead, it could focus on:

• Reliable, simple wallets that grandma can use
• User-controlled recovery without seed phrase anxiety
• DeFi products that don’t require a spreadsheet to understand
• Clear consumer protections and fallback options when things go wrong

None of that is in the report.

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The AI + Crypto fusion: vision or vaporware?

The most futuristic section of the report imagines AI agents interacting with smart contracts, paying for API access, and participating in onchain markets. That’s fascinating, and likely inevitable, long-term.

But today? It’s vaporware.

There are no meaningful products doing this at scale. There’s no mention of the latency issues, cost of onchain execution for micro-interactions, or the real bottlenecks in building verifiable, autonomous AI behavior. It’s presented as a “next frontier,” but it mostly serves to piggyback on AI hype.

The crypto + AI story is appealing. But without real interfaces, real products, or real demand, it’s mostly just narrative.

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The missing layer around governance and regulation

The report briefly references U.S. policy improvements, and yes, there have been promising signals (like the GENIUS and CLARITY acts). But it doesn’t grapple with the complexity of global regulation, nor the ongoing legal grey zones that scare away builders and investors alike.

Worse, there’s no meaningful reflection on crypto governance. Who controls updates to L2 rollups? Who governs protocol treasuries? How does power shift as protocols grow?

Crypto claims decentralization, but increasingly relies on multisigs, councils, and backroom decisions. That tension needs more attention than a paragraph in a glossy PDF.

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In сonclusion

The a16z State of Crypto 2025 report is a powerful snapshot of how VCs and founders want the world to see crypto: matured, scalable, inevitable.

But under scrutiny, it reveals a landscape that’s still messy, contradictory, and in transition.

It’s a useful document, not as a map of where we are, but as a manifesto of what the crypto elite want us to believe. For builders, designers, and skeptics alike, the challenge is to cut through the narrative and ask: what are the real problems we still need to solve before crypto can genuinely serve billions of people?

Because it’s not solved yet, not even close.

And yet, signs of genuine decentralization do exist — outside the spotlight. Platforms like ThorSwap now allow anyone to swap BTC to ETH, USDT, or even XRP natively, across chains, without custodians or KYC. No layers, no wrappers, no wrapped tokens. Just real assets moving freely. That’s the spirit of crypto: not in the branding, but in the protocol.