CryptoCompare Asset Report – January 2023: Ordinals Sees BTC Block Size, Hashrate And Network Difficulty Reach All-Time Highs

It was a strong start to the year for the cryptocurrency markets, with Bitcoin (BTC) leading the rest of the market with a 39.9% increase to $23,130. Layer-1 blockchain native tokens like Solana (SOL) and Cardano (ADA) outperformed heavily, returning 58.9% and 140%, respectively. Other assets not included in this report proved to be the biggest gainers, such as Aptos – the recently launched layer-1 blockchain – which returned 386% in the first month of the year.

Despite the strong January performances, BTC remains the only covered asset with significant positive returns at 12.9% over the last three months. ETH has remained rangebound during this period, and while ADA and SOL performed strongly in January, they are still recovering from their significant falls in price in November, caused by the collapse of FTX.

The full report is accessible here. The data used in this report was collected up to Feb 9th.

Key takeaways:

• Ordinals – a controversial new protocol deployed on Bitcoin which enables NFTs to be inscribed on Bitcoin transactions – has taken the Bitcoin blockchain by storm. As a result, 7-day average transactions reached 313k, the highest since February 2021, block size recorded an all-time high of 2.20 MB on the 6th of February and the average hash rate (per month) rose 10.3% to 275.4mn TH/s, resulting in the highest electricity intensive month for the Bitcoin network in its history.
• News surrounding Ethereum’s upgrades has caused a surge in the price of Liquid Staking Derivatives (LSDs), including FXS, LDO and RPL. The three tokens have witnessed a significant increase of 286%, 239% and 208%, respectively, from the beginning of January to the 7th of February.
• In January, the Total Value Locked (TVL) on the Cardano blockchain rose 49.9% to $99.0mn, recording the first TVL increase in six months. This was the highest recorded TVL on the Cardano network since August 2022. January was the best-performing month for Cardano since August 2021, as its price rose 58.9% to $0.39.
• The aggregate market capitalisation of Bitcoin, Ethereum, Cardano and Solana rose 39.0% to $662bn, the largest market capitalisation figure since July 2022. While Solana’s market capitalisation grew at the fastest pace in January, it remains the smallest asset – being 65.9% of the market capitalisation of Cardano, compared to 118% at its peak.

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Bitcoin Community Divided Over On-Chain NFT OrdinalsOrdinals – a controversial new protocol deployed on Bitcoin which enables NFTs to be inscribed on Bitcoin transactions – has taken the Bitcoin blockchain by storm and revived the debate as to whether the Bitcoin blockchain should be used for functions other than financial transactions.

As a result, 7-day average transactions reached 313k, the highest since February 2021, block size recorded an all-time high of 2.20 MB on the 6th of February and the average hash rate (per month) rose 10.3% to 275.4mn TH/s, resulting in the highest electricity intensive month for the Bitcoin network in its history.

Bitcoin Block Size Reaches All Time High

Liquid Staking Derivative Tokens Soar in January News surrounding Ethereum’s upgrades has caused a surge in the price of Liquid Staking Derivatives (LSDs), including FXS, LDO and RPL. The three tokens have witnessed a significant increase of 286%, 239% and 208%, respectively, from the beginning of January to the 7th of February.

Liquid Staking Derivative Tokens Outperform Market

Bitcoin Only Covered Asset To Record Positive Growth Over 3 Month PeriodSolana was one of the best-performing assets in January, returning 140% and closing the month at $23.9. With an opening price of $36.9 on the 6th of November, the token is still recovering from its decline caused by the fall of FTX. Despite this, SOL crossed its 50-day moving average at the start of January and is nearing its 200-day moving average, which closed the month at $26.1.

SOL Rebounds and Nears 200-Day Moving Average

Cardano TVL Sees First Increase in 6 MonthsIn January, the Total Value Locked (TVL) on the Cardano blockchain rose 49.9% to $99.0mn, recording the first TVL increase in six months. This was the highest recorded TVL on the Cardano network since August 2022. January was the best-performing month for Cardano since August 2021, as its price rose 58.9% to $0.39.

Cardano TVL Rises for the First Time in Six Months

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The information provided by this report does not constitute any form of advice or recommendation by CryptoCompare. Any redistribution of charts appearing in this Review must cite CryptoCompare as the sole provider and creator.