January 2024 | Greythorn Monthly Market Update

February 2, 2024

Opening Remarks

Welcome to the inaugural edition of the Greythorn Market Update. In an era where crypto matters more than ever, it’s essential to make an extra effort to ensure our readers remain well-informed about the evolving world of digital assets and blockchain technology.

At Greythorn, we’re committed to providing monthly updates, offering deep insights into the latest developments in the crypto markets and their intersection with the broader macroeconomic landscape.

Each edition will feature crucial metrics, in-depth analysis of adoption trends, shifts in market sentiment, updates on regulatory changes, and the latest news. Additionally, we’ll explore the evolving role of cryptocurrencies on the global stage, helping you stay ahead in this dynamic sector.

Bitcoin Analysis

January marked a notable period for Bitcoin, with significant developments and fluctuations:

Strong Start to the Year

Bitcoin had an impressive beginning in January. On the evening of January 1st, the price began to surge, reaching over $45,800 by January 2nd. This level hadn’t been seen since April 2022, prior to the Terra ecosystem collapse and subsequent market turmoil.

Bitcoin’s 15th Anniversary

January 3rd was a milestone for Bitcoin, celebrating the 15th anniversary of mining the first Bitcoin, known as the Genesis Block or Block #0. This unique block, not linked to any preceding block, was generated by the Bitcoin protocol itself, marking the start of the blockchain. It also introduced 50 new bitcoins as a mining reward, symbolising the beginning of the Bitcoin journey.

This anniversary also served as a moment to reflect on Bitcoin’s ongoing innovation. The ecosystem saw accelerated developments, such as the introduction of Ordinals, fostering marketplaces for Bitcoin-based NFTs, and potential data storage applications. Advances in Bitcoin’s layer-2 solutions like Lightning and the potential of Bitcoin becoming a multi-asset network through Taproot Assets were also notable.

January Performance Overall

Even after the strong start of the year, Bitcoin’s performance in January was somewhat erratic, with the price moving sideways.

By January 8th, rumours about the SEC’s imminent approval of the first US Bitcoin spot ETF began circulating. It was suggested that BlackRock had prepared $2 billion from existing Bitcoin holders for this new ETF. However, on January 10th, an unusual event occurred when the SEC’s account was reportedly hacked, leading to a false announcement about the approval of several Bitcoin ETF listings.

Despite the confusion, the official confirmation from SEC Commissioner Hester Peirce came on January 11th. This prompted the anticipated “sell the news” event; however, the market remained in the sideways trading range that has been established since the start of December up to the present day.

ETF Launches and Market Impact

Following these events, BlackRock’s IBIT saw over $1 billion in volume on its first day, with several other ETFs like Fidelity’s FBTC, ARK/21 Shares’ ARKB, and Bitwise’s BITB also performing well. Including GBTC, a total of $4.3 billion was traded. Even WisdomTree’s BTCW, though less prominent, outperformed most new ETFs.

Source: Eric Balchuna

Contrary to some expectations, Bitcoin’s price did not surge following these developments. This was partly attributed to the already mentioned “sell the news” pressure and the likelihood that not all GBTC outflows were reinvested in Bitcoin, either in spot or through the ETFs. Many speculators, who had previously invested in GBTC, likely took profits, contributing to the subsequent price slump.

During this period, Ethereum began outperforming Bitcoin for the first time in a while. This shift was largely driven by crypto portfolio rotation from Bitcoin to Ethereum, amid speculation about upcoming Ethereum ETFs.

As the excitement around the ETFs subsided, Bitcoin’s price initially stagnated and then dropped, falling below $39,000 — a level not seen since early December. This downturn was primarily driven by GBTC exits. As investors began redeeming their holdings, significant outflows were observed from GBTC, with the steepest daily outflow recorded on the 22nd, totalling $640 million.

Despite these challenges, Bitcoin’s price showed resilience towards the end of January. The rate of GBTC outflows began to decrease, and by the 25th, they had reduced to $394 million. This slowdown, though still significant, marked the lowest outflow since the ETF launch day and indicated a potential stabilisation in the market.

Source: BitMEX Research

In conclusion, January was a pivotal time for Bitcoin, and as we look ahead, several important factors could shape the market. The US government is planning to sell a significant amount of seized Bitcoin, which could introduce some selling pressure. At the same time, the SEC has delayed a few Ethereum spot ETF proposalsFTX has sold roughly $1 billion worth of GBTC. Adding to the mix, there are reports that around 200,000 BTC from the Mt. Gox bankruptcy is set to be distributed over the next few months.

However, it’s also essential to recognize the growing interest in the market, with key metrics showing increased activity. Not to be overlooked is the upcoming Bitcoin halving, due in about half a year, which historically has signalled the start of a bull market. These developments combined suggest that the coming months will be both challenging and exciting for Bitcoin holders.


  • SEC’s Tumultuous Month: Account Hack and Official Approval of 11 Spot Bitcoin ETFs.
  • Ethereum’s Vitalik Buterin Unveils Updated Roadmap, Focusing on Scalability and Decentralization.
  • Significant Rise in Retail Bitcoin Adoption: Over 6,000 Global Retailers Now Accept Bitcoin.
  • Ark Invest Continues to Reduce Holdings in Coinbase, Selling Over $50 Million in Shares.
  • Record Highs for CME Bitcoin Futures Indicating Growing Institutional Interest.
  • Expansion in Asian Crypto Market: Around Ten Hong Kong Firms Exploring Spot Crypto ETFs.
  • Fox Corporation Collaborates with Polygon Labs to Launch Blockchain Media Platform Verify.
  • Bitcoin Surpasses Silver, Becoming the Second Largest U.S. ETF Commodity Asset.
  • SEC Delays Decision on Fidelity’s Ethereum ETF, Extending Review Period to March.
  • Donald Trump Vows to Block CBDC Issuance if Re-elected as U.S. President.
  • South Korea Reconsiders Crypto Tax Policy and Assesses Spot Bitcoin ETF Viability.
  • Crypto Ownership Skyrockets Globally to 580 Million Users, Reports Crypto.com.
  • Tesla Maintains Its Bitcoin Holdings Unchanged in Q4 Financial Report.
  • Polymer Labs Secures $23 Million Funding for Ethereum Layer 2 Network Development.
  • Crypto Exchange OKX Announces Closure of Mining Pool Services by Late February.
  • Ripple Co-founder’s Personal XRP Accounts Compromised in $113 Million Hack.
  • Celsius Network Commences $3 Billion Payout Post Chapter 11 Bankruptcy Emergence.
  • Hong Kong Authorities Investigate Worldcoin over Data Privacy Concerns.
  • Ethereum’s Dencun Upgrade Goes Live on Sepolia Testnet, Aiming to Lower Fees and Enhance Scalability.
  • Solana Reaches Multi-Year High in Monthly Transaction Volumes, According to The Block Data.

On-Chain Analysis

  • ETH tends to perform well from January to May. However, this trend might change due to increasing competition from Layer 2 solutions and rivals such as SOL and TIA. Also, Glassnode’s Ethereum Short-Term Holder sentiment indicator has become optimistic, the first such shift since November 2021, possibly driven by Ethereum ETF speculation and stronger market conditions.
Source: Daan Crypto TradesGlassnode
Source: Daan Crypto TradesGlassnode
  • In 2023, the Web3 sector saw a notable surge in funding for AI projects, reaching $298 million, effectively doubling the total investment in AI over the past seven years. Also, AI Cryptocurrencies Outperform Other Sectors In 2023. OLAS Research here.
Source: Binance Research
Source: Grayscale
  • Sui has recently shown remarkable growth with surges in Total Value Locked (TVL) and trading volume, ranking 12th in TVL and 9th in weekly trading volume. It has notably drawn $50 million in capital from Ethereum, becoming a leading destination for liquidity.
Source: WormholeDeFiLlama
Source: WormholeDeFiLlama
  • During bull market corrections, drawdowns typically fall between 25% to 35%. According to Glassnode’s data, the current cycle has had fewer drawdowns than past cycles. So, there’s no need to panic if we enter into one!

Also, Bitcoin’s risk level, previously at 0.6 amid the ETF event and GBTC outflows, has dropped but stays over 0.5, signalling moderate risk. Typically, Bitcoin is in the low-risk zone, rarely in medium (0.4–0.6) or high-risk (0.6–1) areas.

Source: Glassnode
Source: Into The Crypto Verse
  • Pudgy Penguins continues to lead the NFT market, hitting new all-time highs this week, with Lil Pudgies also seeing a significant rise. In addition, Cool Cats has made a strong comeback, with a 46% increase in its floor price over the last week.

Macro Analysis

  • At the beginning of June, the US manufacturing sector experienced a decline, continuing its almost two-year downturn. There was a significant decrease in manufacturing output and jobs, while costs for materials and transportation increased sharply, leading to higher selling prices. For the full report, click here. Despite these challenges, the US economy is still predominantly driven by the services sector, underlining ongoing inflation concerns.
  • Expectations for interest rate cuts began to shift at the start of the month. The probability of a rate cut in the next months became less likely compared to previous weeks, according to CME futures. To track this, visit this website. This shift in expectations was confirmed yesterday when Federal Reserve Chairman Powell announced that interest rates would stay the same. The Fed stressed the importance of being more certain about reaching its 2% inflation target before contemplating any rate cuts, highlighting their careful strategy in the face of a complex economic environment.
  • Furthermore, economic and job market data indicate that controlling inflation could be tougher than expected. The job market remained robust this month, showing a significant reduction in job cuts. In Europe, inflation seems to be on the rise, as seen in the substantial increase in Germany’s year-on-year CPI index in December and, despite the slowdown in manufacturing, the US economy has not shown signs of entering a recession.
Source: Investing.com
Source: Bloomberg
Source: Bloomberg
  • Also, the housing market in the US continued to struggle, with existing home sales for December marking the worst year since 1995. This slump in the housing market was another sign of the complex economic environment.
  • Finally, we must acknowledge the ongoing geopolitical tensions: the continuous war in Ukraine, strengthening ties between Russia and North Korea, escalating conflicts in the Middle East, and increasing skirmishes in the South China Sea.

Closing Remarks

As we delve into 2024, it’s becoming evident that this year holds brighter prospects for crypto, particularly when compared to the challenges of 2023. Despite some concerns in the broader economic landscape, the crypto sector is embarking on a new phase of growth, a trend that’s obvious to anyone paying attention. The recent approval of ETFs is a significant milestone, signalling a renewed global willingness to embrace the potential of crypto to create meaningful impact.

To keep up with the latest trends and developments in the crypto market, I encourage you to connect with Greythorn. We are deeply engaged in the crypto industry, constantly sharing our insights and perspectives on various crypto sectors and the overall direction of the industry. For further information and to stay in the loop, here are the various ways you can reach out to us:

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