Our monthly crypto overview for January:
- The crypto markets corrected significantly to kick-start the year.
- Bitcoin and Ether dropped by 20.64% and 31.58%, respectively.
- The top outperformer last month was Cosmos.
- Regulatory uncertainty is weighing on the markets.
Crypto Market Overview January
The first month of the year didn’t bring a turnaround in crypto investor sentiment. Following the correction in December, the crypto markets moved another leg lower in January, with several leading cryptocurrencies dropping by over 30% since the start of the year.
Regulatory uncertainty coming out of the U.S. combined with a proposed ban on crypto mining in the E.U. have pushed cryptocurrency prices lower in January.
Moreover, 2021 was a record year, with almost every major cryptocurrency hitting a new all-time high. Following such an incredible bull market, past crypto market cycles suggest that we may be entering a period of consolidation and strategic accumulation at lower price levels.
Crypto Performance Overview January
In January, the crypto asset markets were red across the board.
The two leading cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH), dropped by -20.64% and -31.58%, respectively. In a similar vein, leading Layer-1 blockchains Cardano, Terra, and Avalanche dropped by 21.98%, 40.19%, and 34.05%, respectively.
The only notable outperformer among the top crypto assets was FTX Token (FTT). The exchange token closed the month 8.88% higher following the announcement of a new web3-focused venture capital fund launched by the leading crypto derivatives exchange.
Stocks performed similar to crypto assets, with the S&P 500 Index losing -6.39% in January. U.S. Treasuries, measured by the S&P U.S. Government Bond Index, are lower by -1.48%.
The precious metal Gold (XAU) managed to retain its value in January, closing the month de facto unchanged (+0.12%).
Institutional Interest in Crypto
New York-based asset manager WisdomTree Investments announced plans to launch a crypto trading app targeting retail investors. The investment firm wants the new crypto app, called WisdomTree Prime, to “provide a core suite of savings, payments and investment” services while avoiding a focus on “trading and speculation.”
U.S. hedge fund Brevan Howard has reportedly made numerous key hires for its new crypto asset unit. The hedge fund is planning to invest directly in crypto and is building a digital asset division called BH Digital.
Bitcoin on Balance Sheets
Once again, El Salvador added more Bitcoin to its treasury. On January 21, President Nayib Bukele announced the purchase of an additional 410 BTC by the Central American nation’s treasury. El Salvador now holds at least 1,801 bitcoins, which amounts to around $68 million.
The Brazilian city Rio de Janeiro announced that it plans to allocate 1% of its treasury to Bitcoin and is also exploring discounts to tax payments made with Bitcoin.
About Iconic Funds
Iconic Funds is the bridge to passive and actively-managed exposure to crypto. Iconic Funds, via its subsidiaries, offers crypto asset ETP’s, diversified index funds, and alpha-seeking strategies for investors.
Our mission is driving the adoption of crypto assets. As the bridge for investors to gain exposure to Crypto Assets, Iconic’s licensed and regulated vehicles offer investors a menu of investment choices ranging from passive index exposure to actively-managed strategies. Iconic Funds removes the technical risks of crypto investing by offering investors trusted and familiar means to invest in crypto at industry-leading low costs.
The marriage of state-of-the-art technology, innovative investment products, and uncompromising professionalism places Iconic at the vanguard of crypto asset management.
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Iconic in Press
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Recent Research Reports
- How did portfolios perform during the pandemic? ➡ Download here
- Analyzing the Primary Value Drivers of Leading Cryptocurrencies ➡ Download here
- How Effective are Common Investment Strategies with Bitcoin? ➡ Download here
- Investigating the Myth of Zero Correlation Between Crypto Currencies and Market Indices ➡ Download here
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