The cryptocurrency market drew attention in January due to the increase in ETF applications, new coin launches, and growth in the DeFAI sector. A report published by Binance Research highlighted the impact of political developments in the U.S. on the market and revealed important data. The change in the U.S. administration and pro-crypto policies contributed to the market’s recovery in the first half of January. However, the launch of the AI-driven DeepSeek model towards the end of the month increased market volatility.
Impact of U.S. Administration Changes on the Crypto Market
Significant changes occurred in the cryptocurrency market with the inauguration of U.S. President Donald Trump in the early weeks of the year. President Trump’s signed decree banning the creation of a Central Bank Digital Currency (CBDC) and plans for a national crypto reserve positively affected the market.
These developments contributed to the total market capitalization of the cryptocurrency market reaching $3.76 trillion at the beginning of January. Notably, a significant increase in ETF applications was observed following the departure of former SEC chairman Gary Gensler. As of January, there are 47 active cryptocurrency ETF applications at the SEC, covering 16 different crypto categories, with memecoins prominently featured.
However, this optimistic atmosphere was shaken by the release of the new AI model, DeepSeek. DeepSeek became the most downloaded AI application, surpassing ChatGPT, and increased volatility in both the stock and cryptocurrency markets.
Memecoin Hype and Growth in the DeFAI Sector
According to Binance Research, the increase in coin launch platforms in January led to a surge in memecoin hype. The report indicated that over 37 million new coins were created throughout the month, with predictions of reaching 100 million different cryptocurrencies by the year’s end.
This rapid growth complicated the distribution of capital and made steady price increases difficult. Currently, 98% of the market’s total capital remains concentrated among the top 100 cryptocurrencies. Investors’ shift from long-term holding strategies to short-term speculation has deepened this fragmentation.
Meanwhile, the DeFAI (Decentralized Finance and Artificial Intelligence) sector continued to grow robustly. The Solana 
$85 (SOL) network has outperformed Ethereum (ETH) 
$1,988 in decentralized exchange (DEX) volume for the fourth consecutive month. Solana’s rise to prominence in memecoins and AI-based projects significantly boosted its transaction volume, with the DEX transaction volume ratio between Solana and Ethereum exceeding an all-time high of 300% in January.
