The total cryptocurrency market capitalization reached its highest level in over two months on Jan. 13 after breaking above the $900 billion mark on Jan. 12.
While the 15.5% year-to-date gain sounds promising, the level is still 50% below the $1.88 trillion crypto market cap seen before the Terra-Luna ecosystem collapsed in April 2022.
Crypto markets total capitalization, USD. Source: TradingView
“Hopeful skepticism” is probably the best description of most investors’ sentiment at the moment, especially after the recent struggles of recapturing a $1 trillion market capitalization in early November. That rally to $1 trillion was followed by a 27.6% correction in three days and it invalidated any bullish momentum that traders might have expected.
Bitcoin (BTC) has gained 15.7% year-to-date, but a different scenario has emerged for altcoins, with a handful of them gaining 50% or more in the same period. Some investors attribute the rally to the U.S. Consumer Price Index (CPI) data released on Jan. 12, which confirmed the thesis that inflation was continuing to drop.
While the macroeconomic conditions might have improved, the situation for cryptocurrency companies seems gloomy. New York-based Metropolitan Commercial Bank (MCB) announced on Jan. 9 that it would close its crypto-assets vertical, citing changes in the regulatory landscape and recent setbacks in the industry. Crypto-related clients accounted for 6% of the bank’s total deposits.
On Jan. 12, the U.S. Securities and Exchange Commission (SEC) charged cryptocurrency lending firm Genesis Global Capital and crypto exchange Gemini with offering unregistered securities through Gemini’s “Earn” program.
A final blow came on Jan. 13 after Crypto.com announced a new wave of staff layoffs on Jan. 13, reducing the global workforce by 20%. Other crypto exchanges that recently announced job cuts in the last month include Kraken, Coinbase and Huobi.
Despite the dreadful newsflow, the macroeconomic tailwinds favoring risk assets ensured that only UNUS SED (LEO) closed the first 13 days of 2023 in the red.
Weekly winners and losers among the top 80 coins. Source: Nomics
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