In January 2023, BTC recovered its losses of the past six months with a big monthly-level positive, standing strongly at $20K and becoming the best performing asset of 2023, with the total crypto market cap back at $1T and Crypto surpassing Amazon with a total market cap of $1.04T, ranking seventh in the global risk asset class behind Google.

# Bitcoin

BTC's market cap returned to $440 billion, accounting for 42.4% of the Crypto market and ranking 17th in the global risk asset class. Compared to gold with a market cap of $12.73T, BTC still has nearly 30 times more room; ETH's market cap reached $190 billion, accounting for 18.5%, and together with BTC it accounted for 60.9% of the overall Crypto market cap.

Looking at the cost of arithmetic power BTC's price is supported by the fact that BTC's price has been hovering back and forth around the cost of mining for months and now has the beginnings of a breakout, which has historically been accompanied by bear markets bottoming out.

# Ethereum

Ethereum is experiencing its second deflation since the merger as the total number of ETH tokens has fallen by 4624 since last year's Merge, which blocked the issuance of around 161W additional ETH tokens, reducing ETH's original annualised inflation rate of 3.53% to -0.01%.

More than 16.46m ETH participated in the pledge of the Ethernet beacon chain, with a pledge rate of 13.66% and more than 510K pledged nodes. Lido pledged more than 4.81m tokens, accounting for 29.25% of the pledge, firmly on top of the LSD block.

Over 5.80m ETH were involved in DeFi lockups, with a lockup rate of over 4.83%.

The total number of ETH burned in January based on the EIP1559 proposal was 63,735, of which 18k were destroyed in the NFT block, 17.6K in the DeFi block, nearly 1.4K in MEV and 1.8K in L2.

The total market cap of ETH ecosystem is $444.8 billion, of which the market cap of ETH tokens is $193.9 billion, the total market cap of Erc20Token is $229.4 billion, and the total market cap of NFT assets on Etherchain is $21.5 billion.

# AltChains

Overall on-chain activity has recovered, BNB is still the most active public chain with an average daily active address of around 750K, BTC has an average daily active address of around 600K, Polygon has an average daily active address of around 400K, Ethereum has an average daily active address of around 330K, Arbitrum has seen a significant increase in active addresses on its chain and has reached around 50K, Aptos has seen a six-fold increase in price in the past The price of Aptos has doubled sixfold in the past month, but the number of daily active addresses on its chain has not changed much and remains under 20K.

The market value of on-chain locked assets reached $55.673 billion this month, with Ethereum's on-chain TVL of $32.9 billion, or 59.22%; BNBChain's on-chain TVL of $6.33 billion, or 11.36%; Tron's on-chain TVL of $5.19 billion, or 9.32%; and Arbitrum's on-chain TVL of $1.69 billion, surpassing the assets on the Avalanche chain, coming in fourth place.

# Volume & Inflows

January 2023 saw Crypto return to $100 billion in average daily volume across the network, with Dex's cumulative chain-wide volume of $70.6 billion for the entire month, still less than the one-day level of network-wide volume. defillama data shows $2.9 billion of all Dex chain-wide volume on February 1st, with a Volume(Dex)/Volume(Cex) ratio of 7.57%.

Net inflows to exchanges in January exceeded $25 billion, with Binance capturing $22.4 billion in Inflows alone, accounting for nearly 90% of the overall market share, OKX in second place with $1.24 billion in inflows, and all other exchanges with less than $1 billion in net asset inflows.

So far, the heat in the market has been more on the price volatility of low-cap assets, with on-chain activity figures still in the bottom region and volume at bearish levels, with significant rotation in the AltCoins section, which is a sign of a lack of liquidity.

Data source citation：

https://defillama.com/

https://ultrasound.money/

https://coinmarketcap.com/

https://dune.com/hildobby/eth2-staking

About Basics Capital

Basics Capital is a global blockchain industry fund focusing on the primary market to fuel the development of early-stage application layer projects, with investments from over 30 countries and regions worldwide, including Southeast Asia, the Middle East, Europe, the US, Canada, Australia, Vietnam and Russia, covering Wallet, NFT, DeFi, GameFi, DID, SocialFi and LaunchPad, covering various segments of the application layer.