Ethereum makes a comeback leading Q3: DeFi sees strong recovery, tokenization of RWA becomes a new growth engine

According to the latest industry report, Ethereum will reclaim its leading position in the digital asset market in the third quarter (Q3) of 2025, leading a strong recovery in the crypto market. This rise is mainly attributed to investors' renewed enthusiasm for Decentralized Finance (DeFi) and the rapid emergence of tokenization of real-world assets (RWA). Throughout Q3, the total value of the global crypto market increased by over $500 billion, marking significant growth for the second consecutive quarter and signifying that the crypto market has entered a new phase driven by utility and innovation.

Market Dominance Shifts: Ethereum Leads the Rise, Bitcoin's Dominance Declines

· Change in pattern: This rebound is different from the past where Bitcoin usually leads the rise; Ethereum and other large-cap altcoins have taken center stage. The price of Ethereum has risen strongly throughout the quarter, setting a new all-time high before a slight correction in late September.

· Capital Flow: Report analysts point out that the key drivers essential for the rise of Ethereum include: ETF demand, increasing institutional interest in tokenized assets, and the recovery of corporate finance department activities. This shift in capital flow marks a broader structural transformation occurring within the digital asset ecosystem.

DeFi Strong Comeback: TVL Surge Revives Investor Confidence

· Trading Activity: After two quarters of trading stagnation, trading activity in both centralized and decentralized exchanges significantly increased in Q3. The most notable aspect is the resurgence of DeFi protocols, whose total value locked (TVL) surged, indicating that investors' confidence in decentralized lending, staking, and yield generation platforms has been restored.

· Positive ecosystem: DeFi platforms based on Ethereum, such as Aave, MakerDAO, and Lido Finance, have recorded significant inflows of funds, helping to restore momentum across the entire industry. At the same time, a new wave of altcoins has emerged, many of which leverage Ethereum's infrastructure to build innovative financial applications, further enhancing the vitality of the Ethereum ecosystem. Additionally, the expansion of stablecoin market shares like USDe, as well as previously lesser-known projects breaking into the top 30 by market capitalization, indicate that investor interest is surpassing Bitcoin and Ethereum, achieving broader diversification.

The Rise of RWA: Linking Traditional Finance with Decentralized Ecosystem

· Core growth point: The highlight of the report is the surge in demand for tokenization of real-world assets (RWA). RWA is the digital representation of traditional financial instruments such as stocks, bonds, and real estate.

· Bridging Role: Protocols like Ondo Finance and Backed Finance have garnered significant attention from investors by bringing interest-bearing assets on-chain. These projects enable investors to gain real-world income streams within a decentralized ecosystem, successfully bridging the gap between traditional finance (TradFi) and Decentralized Finance.

· Ethereum's Core Position: Analysts describe this trend as a key milestone in the maturation process of the crypto market. Given that most RWA protocols are built on the Ethereum network, the integration of tokenization of real-world assets has become a key growth driver for the Ethereum ecosystem. Therefore, Ethereum is now positioned as a pillar of an ever-expanding tokenized economy, poised to redefine the trading, ownership, and management of traditional assets in the digital age.

Market Dynamics Shift: Crypto Assets Move Towards Independence and Maturity

· Risk Diversification: Despite Ethereum's strong performance, Bitcoin's market dominance has significantly declined throughout Q3. This indicates that funds are clearly being reallocated towards alternative opportunities, including Decentralized Finance, RWA, and emerging blockchain sectors.

· Asset Independence: The report also found that Bitcoin has decoupled from the S&P 500 index for the first time for over a year. This suggests that cryptocurrencies are gradually evolving into an independent asset class, with reduced influence from traditional market fluctuations.

· Miner performance: Despite losing focus, Bitcoin miners continue to perform strongly. Hashrate has reached a new historical high, and ETFs focused on miners have also recorded solid quarterly returns. However, the dominant narrative of Q3 belongs to Ethereum—a network driving innovation and capital inflow in an increasingly diversified market.

Conclusion

This report focusing on the performance of the crypto industry in Q3 showcases a crypto industry defined by innovation, diversification, and structural transformation. Investors are starting to favor platforms and assets that offer practical applications and sustainable returns, rather than pure speculation. Ethereum, with its large developer base and established ecosystem, is leading the wave of DeFi recovery and the rise of RWAs. As network upgrades and tokenization trends continue to advance, Ethereum's role is expected to further enhance, collectively driving a more balanced and mature crypto market landscape.

Disclaimer: This article is for informational purposes only and does not constitute any investment advice. The cryptocurrency market is highly volatile, and investors should make cautious decisions.