In January, the price of most cryptocurrencies tumbled, with BTC dropping over 20% and ETH over 30% in a continued decline from all-time highs seen in November of last year. Over the decline, Bitcoin’s share of total assets held in cryptocurrency investment products rose to 69.5%.
According to CryptoCompare’s latest Digital Asset Management Review, macro sentiment around risk-assets has been the leading narrative in the markets, as following a record 7% CPI inflation figure coming out from the U.S. in December 2021 investors expect significant tapering of quantitative easing from central banks.
The report details that assets under management for cryptocurrency investment products tumbled 25.1% from $58.6 billion to $43.9 billion, while average daily trading volumes fell 14.5% to $481 million. It adds that Bitcoin-based products saw their assets under management drop 23.3% to $29.9 billion, while Ethereum products and products backed by other assets saw more significant declines of 29.2% and 29.9% respectively.
As a result, BTC products gained market share, going from 67.8% to 69.5% in January.
According to the Digital Asset Management report, the third week of December was the first week since August where digital asset products saw outflows, with the trend carrying on into January. Bitcoin products have experienced the largest outflows with a weekly average of $49.3 million.
Notably, some products saw inflows. Solana-based products, the report notes, saw inflows of $2.4 million a week on average. Similarly, most products saw their trading volumes tumble, although physically-backed BTC products saw their volumes grow.
As CryptoGlobe reported, analysts at JPMorgan led by Nikolaos Panigirtzoglou have revealed they see Ethereum, the second-largest cryptocurrency by market capitalization, losing market share to rivals like Solana when it comes to non-fungible tokens (NFTs).
In a note shared with clients, the analysts wrote that Ethereum’s volume share of non-fungible token trading fell from 95% at the start of 2021 to 80% as a result of the high transaction fees seen on the cryptocurrency’s network.
As for Bitcoin, analysts at JPMorgan have also recently lowered their long-term bitcoin price target of $150,000 to $38,000 after the price of the flagship cryptocurrency dropped from a $67,000 all-time high to a $34,000 low before recovering.
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