The analysis arm of the world’s largest crypto trade, Binance, has launched a report highlighting insights for the digital asset market in January 2025. It outlined how the crypto market reacted to a number of elements, together with United States coverage narratives, within the first few weeks of the 12 months.
In accordance with Binance Analysis, early January noticed the crypto market cap recuperate from a downturn skilled in December 2024, peaking at $3.76 trillion. This restoration was partly fueled by the change in U.S. administration and potential pro-crypto rules.
ETF Filings Rise in Professional-Crypto U.S. Administration
After his inauguration, U.S. President Donald Trump signed an government order that banned the creation of a U.S. Central Financial institution Digital Foreign money (CBDC) and explored the institution of a nationwide crypto reserve. These elements drove optimistic momentum available in the market till late January, when the emergence of a synthetic intelligence (AI) mannequin, DeepSeek, shook the inventory and crypto markets alike.
DeepSeek grew to become essentially the most downloaded AI app, overthrowing OpenAI’s ChatGPT. This growth triggered heightened volatility that has rolled into February, fueled even additional by issues about U.S. tariff insurance policies.
Whereas the market struggles to recuperate, there was a brand new wave of crypto exchange-traded fund (ETF) filings with the Securities and Alternate Fee (SEC), particularly for the reason that departure of the previous head, Gary Gensler. Binance Analysis revealed that there are at present 47 lively ETF filings in the USA, spanning 16 crypto asset classes, together with meme cash.
Meme Cash and AI Narratives Dominate
Talking of meme cash, Binance Analysis found that the emergence of token launchpads fueled a meme coin mania, resulting in the creation of greater than 37 million property. Analysts predict that at the very least 100 million cryptocurrencies will likely be in circulation by the top of 2025.
Sadly, this huge rise within the variety of cryptocurrencies has divided capital, making it tougher for tokens to maintain costs or attain excessive valuations. The inflow of recent tokens has additionally fueled hypothesis, diminished consideration spans, and discouraged long-term holding. The highest 100 tokens nonetheless account for 98% of the entire crypto market cap. Regardless, some narratives available in the market, just like the decentralized finance AI (DeFAI) sector, stay strong and are attracting extra capital.
In the meantime, Solana’s decentralized trade (DEX) volumes have surpassed these of Ethereum month-to-month since October 2024, with the community main within the meme coin and AI agent narratives. Final month, the Solana-to-Ethereum DEX quantity ratio reached its all-time excessive of over 300%.
