In January, the cryptocurrency market extended its decline to a fourth consecutive month, driven by macroeconomic shocks and policy uncertainty surrounding tariff developments, the U.S. government shutdown, and the incoming Fed Chair. Looking ahead, markets are increasingly focused on near-term macro clarity following an extended period of muted performance.
The U.S.-Japan long-term yield spread fell below the crucial 1% level, historically linked to significant Bitcoin price pressure. This narrowing spread signals reduced returns on Yen carry trades, prompting large position unwinds and liquidity tightening in risk assets. Despite this stress, net yen short positions remain below 2024 levels, suggesting the current impact on Bitcoin may be less severe than past episodes.
Altcoin markets have structurally narrowed, with assets outside the top 10 now accounting for just ~7.1% of total crypto market capitalization, well below prior expansion phases. Capital has remained concentrated in large-cap majors, and stablecoins, reinforced by institutional ETF inflows and a more macro-driven environment. Despite a larger overall market, the investable altcoin universe has contracted, with fewer assets sustaining scale and liquidity as token proliferation fragments attention and flows.
Ethereum daily transactions climbed to new highs of near ~3M in mid-January following the Fusaka upgrade, supported by steady growth in daily active addresses (exceeding 1M) and sustained stablecoin usage. Elevated on-chain activity continues to be underpinned by Ethereum’s role as the primary settlement layer, with stablecoin market capitalization holding around US$160B since September 2025.
Crypto card usage surged over fivefold in 2025, dominated by Visa’s 84% market share, and now reaching US$115M in January 2026. Though still small compared to traditional card volumes, blockchain neobanks offer lower costs and higher yields, positioning them for strong growth in the hybrid fiat-crypto market.
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