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In January 2025, the cryptocurrency market peaked at US$3.76T, driven by a rebound from December’s downturn, with contributing factors including potential policy initiatives such as a national crypto reserve and stablecoin regulations. However, late-month momentum faltered as DeepSeek, an emerging AI model, overtook ChatGPT as the most downloaded app, triggering a 2% decline in both U.S. and crypto markets. Early February saw heightened market volatility amid concerns over potential U.S. tariff policies, impacting risk assets globally, including cryptocurrencies. These developments will be discussed in greater detail in the next monthly report.
The change in U.S. administration, led by President Donald Trump and pro-crypto Republicans, along with the departure of former SEC Chair Gary Gensler, has sparked a wave of new crypto ETF filings. Currently, there are 47 active filings in the U.S., spanning 16 distinct asset categories, including memecoins. While renewed optimism for digital asset regulation has driven momentum for token-based ETFs, the new approval framework is still unfolding, leaving timelines uncertain.
The advent of token launchpads and the memecoin mania has led to the creation of over 37M tokens, with projections exceeding 100M by year-end. This growth has fragmented capital, making it harder for tokens to sustain prices and achieve high valuations. The influx of new tokens fuels speculation, reduces attention spans and discourages long-term holding. Despite the surge, most tokens have negligible market capitalization, with the top 100 tokens comprising around 98% of the total crypto market capitalization.
Solana’s DEX volumes have exceeded those of Ethereum every month since October 2024, with volumes in January reaching over 200% higher than those of Ethereum. In fact, in January, the Solana-to-Ethereum DEX volume ratio reached its all-time high of over 300%. Solana's growth has been driven by its leadership in the memecoin and AI agent narratives, with the recent launch of the $TRUMP and $MELANIA memecoins further boosting its performance in January. In the DeFi space, Solana has been one of the few chains that have shown growth in 2025, with major protocols like Jito, Raydium, Meteora, and Pump.fun contributing and maintaining strong fee generation. Notable highlights include Jupiter, a leading DEX aggregator, acquiring the memecoin app Moonshot. Additionally, the announcement of their buyback-and-burn program and the launch of their new Jupnet liquidity aggregation network have drawn significant attention.
Despite a promising start, the DeFAI sector ended January with a -10% return. However, the overall AI narrative dominance remains robust, capturing 44% of Kaito's Narrative Mindshare. AI tokens, fueled by open-source developments, represent the rapid expansion of traditional AI innovation. As the global AI race intensifies, tracking the trading patterns of these globally tradable AI tokens could provide key insights into retail interest and the evolving AI landscape.
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