The cryptocurrency market experienced a mixed performance in June 2025, characterized by overall growth tempered by risk aversion in the Decentralized Finance (DeFi) sector. The 5th time this year, total market capitalization increased by 10%-plus. As DeFi took a slight dip, there were other altcoins that got beat down pretty bad. The Non-fungible Token (NFT) space saw extreme activity in some sectors. Whether friend or foe, this burst signals the pace and breadth of change in the digital asset ecosystem.

The total cryptocurrency market capitalization increased by 2.62% during the month of June, showing that investors are still committed to the asset class. The stablecoin market saw a 2.57% growth, confirming this encouraging trend. This growth was driven by the United States’ adoption of the GENIUS Act, which offers regulatory clarity for stablecoins. All sectors did not feel those same tailwinds.

DeFi Faces Headwinds

The DeFi sector experienced a 14.02% decline in Total Value Locked (TVL) from the month prior. During this most recent contraction, investors exhibited the highest degree of risk aversion yet. After the past few years of regulatory uncertainty spooked by a cocktail of geopolitical tension, supply chain uncertainty, regulation. Much of DeFi’s future depends on what happens outside of it. In particular, the efficacy of the regulatory rulemaking process in the U.S. is key.

Cardano (ADA) suffered the largest drop in the DeFi ecosystem, with a loss of 16.5%. The crash is reportedly due to the SEC depositing their decision on the Grayscale ETF again. Further, the deployment of the Chang hard fork has been delayed. Tron even began to falter in the highly competitive DeFi space compared to Ethereum’s displayed strength and resilience.

In spite of the general DeFi bearish trend, several projects were able to counter that trend. HYPE showed the strongest performance of the month with a 24.7% jump. Its leading market share in the Decentralized Exchange (DEX) space contributed to this increase. To add fuel to the fire, Lion Group Holdings announced a $2 million dollar token purchase.

Immutable Leads NFT Surge

Though DeFi battled significant headwinds, Immutable missed none of that magic, skyrocketing 215% on NFT home soil. While not directly under the DeFi umbrella, this expansion paints a picture of just how connected everything in the greater digital asset space has become. Speculation, particularly around the success of the upcoming game Guild of Guardians, which will be built on Immutable, fueled sales across the top NFT collections.

The Ethereum yields caused quite a stir in the NFT space. They’re luring in naive investors desperate to find ways to profit from their newly-found digital assets. Immutable’s success and the attractiveness of Ethereum yields are adding a strong gravitational pull to Ethereum. This change is spurring demand for NFTs as the tangible investment opportunity in the digital asset realm.

External Factors Influence Market Sentiment

As the cryptocurrency market’s reaction to events in June 2025 highlights, external shocks play a crucial role in determining market sentiment. Geopolitical tensions and regulatory decisions, particularly in the United States, continue to exert considerable influence on the trajectory of both DeFi and the broader crypto market. The passage of the GENIUS Act was a big win for the often volatile stablecoin market. Yet, unexpected hold-ups in the approval process crippled Cardano.

These external factors not only raise industrywide challenges but underscore the unique risks and uncertainties that come with investing in digital assets. Investors need to be more attentive than ever and proactively shift their strategies as the market landscape and regulatory environment continue to change.