Crypto Market Recap: January 2025

Market Dynamics Poised for the Next Move

The overall market capitalization of the crypto market reached a local peak by January and has since entered a sideways trend, fluctuating between $3.23T and $3.72T. Meanwhile, trading volumes have remained relatively high and stayed at levels comparable to those seen in November and December 2024.Sustained high trading volumes indicate that interest in cryptocurrencies remains strong.

Overall, after a significant surge following Trump’s victory, the market has moved into a consolidation phase as investors await further actions from the new administration.

Bitcoin Braces for Further Regulatory Developments

Bitcoin's price not only reflects but also contributes approximately 60% to the overall crypto market cap. As a result, Bitcoin's price patterns follow a similar trend, fluctuating between $92,000 and $105,000.

One of the key factors that could impact Bitcoin’s price in the future is whether the U.S. will establish a Bitcoin Reserve and, if so, how large it will be. Additionally, several U.S. states are discussing the creation of their own Bitcoin reserves. You can find a list of these states and their current status in the infographic below.

Beyond the U.S., other countries are also beginning to take clearer positions on Bitcoin and cryptocurrencies. Christine Lagarde, President of the European Central Bank, recently stated: "Reserves have to be liquid, secure, and safe," adding that Bitcoin does not meet these criteria due to its volatility and potential risks associated with money laundering and illicit activities.

As a result, among the world's largest economies, the U.S. remains the leading pro-crypto country. However, much of its stance has so far been rhetorical, as there hasn't been enough time to implement concrete measures. Nonetheless, the first steps in this direction have been taken with the signing of the executive order titled “Strengthening American Leadership in Digital Financial Technology,” aimed at supporting crypto and blockchain technology.

Ethereum: Weakness or a Buying Opportunity?

Meanwhile, Ethereum is going through a rough patch, which became particularly evident in early January when its price fell below $3,000.

Looking at Ethereum’s price relative to Bitcoin, the yellow line on the chart indicates a persistent downtrend since 2022, with $ETH approaching its historical low against BTC.

Several factors contribute to Ethereum’s weak price performance, which can be categorized into different layers of depth:

• Lack of popularity on Twitter due to poor price action.

• Failure to capture major narratives in this cycle, such as memecoins and AI agents.

• Internal conflicts within the Ethereum Foundation, which have now become public.

• Losing ground to Solana in various key metrics.

On the other hand, some investors see this as an opportunity to accumulate $ETH at an attractive price. For instance, World Liberty Financial recently started accumulating Ethereum, which is now the largest position in its portfolio. As of January 24th, they hold almost 56M ETH along with 14.7M stETH, which accounts for nearly $240M.

Blockchain Metrics Highlight Solana's Growing Dominance

When discussing Ethereum, it's worth expanding the conversation to other blockchains. Referring back to the infographic above, an important takeaway is that, aside from stablecoins, World Liberty Fi primarily holds just three assets: $ETH, $WBTC, and $TRX.

The inclusion of $TRX in the portfolio can be explained by its steadily growing price trend, its dominance in stablecoin transfers, and its strong revenue generation. TRON remains one of the most profitable blockchains while maintaining one of the lowest Price-to-Revenue multiples in the industry, a topic we previously explored in our deep dive into the TRON ecosystem.

Notably, in January, Solana surpassed Ethereum in revenue due to the launch of the $TRUMP token, which drove significant trading volume, increased on-chain transactions, and boosted overall blockchain revenue.

As seen in the chart, Solana also took the lead in trading volume in January, surpassing Ethereum by a factor of three.

When it comes to active addresses, due to the same reason behind increased onchain usage, Solana showed over 6.3M daily average active addresses in January. Near also saw a surge in activity, securing second place in active addresses for January. TRON rounds out the top three, however, it’s number of active addresses is close to the average of 2024, which is driven by the large amount of stablecoin-transferring bots.

$TRUMP Token Draws New Users to Crypto

One of the key reasons for Solana’s leading position in onchain metrics was the launch of the $TRUMP token. It brought a significant influx of new users into the ecosystem, for whom it became the first crypto investment. This can be observed in the age of wallets holding $TRUMP and MELANIA — 46.5% of these wallets did not exist before the token’s launch.

Arguably, the launch of $TRUMP was the most high-profile crypto event of January 2025. Unlike other memecoins, this token carries a unique significance—it is tied to the sitting U.S. president. It’s possible that one of the token’s underlying purposes was to gauge sentiment within the crypto community toward Trump. In this sense, its market capitalization could be seen as an informal approval rating of his actions in the crypto space.

AI Agents: A Fading Trend?

Another major narrative in the crypto community right now is AI agents. However, January was a bearish month for this sector, with the total market capitalization of AI-agent tokens dropping 44%.

There has also been a noticeable decline in daily active wallets on the Virtuals Protocol following its peak in early January. Sentiment around AI-agents has shifted toward pessimism, as many projects turned out to be scam and failed to deliver their products. Instead, a significant portion of AI-agent tokens has turned out to be just memecoins with some “AI” wrapper rather than genuine tech project.

Top Crypto Projects Leading in Key Metrics

Looking at other crypto projects and sectors, we highlight the top performers of January across key metrics: revenue, user growth, and TVL expansion.

Half of the top revenue-generating projects do not have tokens, reinforcing the idea that a project capable of generating substantial income may not need one. Additionally, for two of the top revenue leaders, their token (a stablecoin) is the project’s core product rather than a speculative asset.

Among token-based projects, the leading revenue generators are DEXs that have solidified their dominance within specific ecosystems:

• PancakeSwap – BNB Chain

• Aerodrome – Base

• Raydium – Solana

• Uniswap – Ethereum and EVM Chains

Another crucial metric is the number of active users over the past 30 days, where Raydium Finance dominates by a significant margin. This surge is driven by the boom in memecoin trading on Solana and its partnership with pump.fun. Following Raydium, Uniswap remains a consistent leader, while Jupiter, another Solana-based DEX, secures the third spot.

When looking at Total Value Locked growth, the top performers are primarily projects built on Solana, Ethereum, and TON Chain. The leading category, which drove the TVL expansion, is liquid restaking. It continues to attract significant capital inflows despite the narrative has been around for almost two years now.

Conclusion

In January, the cryptocurrency market reached a plateau, awaiting further actions from the Trump administration. While Bitcoin shows strength, Ethereum displays relative weakness. The influence of Donald Trump on the crypto market is significant, as evidenced by the fact that the launch of the $TRUMP token was the most high-profile event in January, attracting many newcomers to the crypto space.

Solana continues to expand its dominance over Ethereum in the blockchain sector, and the potential launch of an ETF on Solana in 2025 could further strengthen this trend. At the same time, the AI agents sector has seen a shift towards FUD. The market is once again hungry for fresh narratives, which are evolving at an accelerating pace in the crypto space.

The future prospects of the market will largely depend on U.S. policies toward cryptocurrencies and the emergence of new narratives within the crypto market itself.