The cryptocurrency market fell sharply in January due to global economic pressures and weak investor appetite. The US Federal Reserve’s (Fed) continuation of its tight monetary policy, trade tensions and overvaluation signals in the stock markets played a decisive role on cryptocurrencies. While many major cryptocurrencies, especially Bitcoin and Ethereum, have lost value, only areas such as prediction markets and tokenization of real-world assets have shown strength. This process, driven by US-based economic developments, once again revealed the fragile nature of the sector.
Macroeconomic Pressures and the Decline in Major Cryptocurrencies
In the last week of January, the Fed announced that it would continue its tight monetary policy by keeping the policy rate constant between 3.5 and 3.75 percent. The Fed, which did not signal any relaxation as inflation remained above the target level, caused a rapid sales wave in risky assets. In the 48 hours after the announcement, Bitcoin lost 7.3 percent, falling from $90,400 to $83,383. The cryptocurrency market has again shown its high sensitivity to monetary policy.
In the same period, high customs tariffs implemented by the US administration put pressure on global trade. As of January, the average tariff rate rose to 14 percent, the highest level since 1946. According to Yale Budget Lab’s projections, these policies have the potential to slow down economic growth and increase unemployment in 2026. The global uncertainty environment caused the capital directed to cryptocurrencies to decrease.
Overvaluation indicators in stock markets also strengthened the risk perception. The fact that the Buffett Indicator reached 205 percent and the price-earnings ratio of the S&P 500 reached 29 brought up the possibility of a possible correction. Bitcoin, whose correlation with US markets has increased, lost 10 percent in value in January, recording its fourth consecutive monthly decline. Ethereum It fell for the fifth consecutive month, falling by 17.7 percent, and faced the risk of losing its second place among stablecoin projects.
Blockchain Activity, Alternative Sectors and New Growth Areas
Despite the decline in the overall market, remarkable activity was observed in some Blockchain networks. Memecoin activities gained momentum in the Solana ecosystem and security token launches exceeded the 45 thousand level. Increasing transaction volume and number of active addresses increased the revenues of the network. The TRON network strengthened its leadership in stablecoin transfers by exceeding the 100 million active address threshold. BNB Chain broke a record in the number of monthly active users despite the decline in transaction volume.
In the altcoin market, the general picture remained weak. While the total market value of the 100 largest altcoins decreased to 740 billion dollars, the Altcoin Season Index remained in the 20-30 band. Although some mid-cap projects performed strongly, many major altcoins suffered significant depreciation. The contraction in liquidity and investors’ turning to safe assets increased the pressure on altcoin projects.
Among the most notable areas of January were prediction markets and the tokenization of real-world assets. Trading volume on platforms such as Kalshi and Polymarket reached record levels. It is also backed by tokenized US bonds, commodities and private credit products. RWA market increased to 23.7 billion dollars. The rise in gold and silver prices has accelerated interest in tokenized commodity products. Companies like Paxos and Tether reported record inflows in this space and attracted institutional capital to the sector.
