JPMorgan Reports Slower Crypto Ecosystem Growth in January, Despite Market Cap Rise
The crypto ecosystem experienced a slowdown in January, with total trading volume decreasing by 24%, according to a new report from JPMorgan. Despite this decline, the total market capitalization of the sector grew by 8%, reaching approximately $3.4 trillion, the bank said in a research note on Tuesday, citing TradingView data.
The report noted that the market cap growth was primarily driven by Bitcoin (BTC), Solana (SOL), and XRP, while average daily volumes (ADV) showed a broad-based decline across the ecosystem. Despite the overall slowdown, the activity remained significantly higher than before the U.S. election in November.
“We believe the election served as a key catalyst for market movement, with activity and token prices now settling into a post-election equilibrium,” JPMorgan analysts led by Kenneth Worthington wrote.
In terms of specific sectors, decentralized finance (DeFi) and non-fungible tokens (NFTs) saw a more significant downturn, with a noticeable deterioration across various metrics.
On the regulatory front, there have been some positive developments. The new administration under President Trump established a crypto task force, and the controversial SAB 121 accounting rule was rescinded, according to JPMorgan’s report.
