Bitcoin and Solana Surge in January, Ethereum Lags Behind: JPMorgan

Bitcoin (BTC) and Solana (SOL) have surged in January 2025, while Ethereum (ETH) has lagged behind, according to a report by JPMorgan. The report highlights the divergent performance of these cryptocurrencies, with Bitcoin and Solana posting significant gains while Ethereum struggled to maintain its momentum.

Bitcoin gained 9.29% in January, reaching an all-time high of $109,000 on Jan. 20, fueled by optimism surrounding Trump's crypto-friendly stance following his inauguration. However, on-chain data showed a mixed picture, with the number of transactions, active wallets, and new wallets declining. Despite this, Bitcoin mining revenue dipped slightly, and transaction fees plunged 48%. The average hashrate remained steady, with mining difficulty decreasing amid notable volatility throughout the month.



Solana, on the other hand, soared 22.3% in January, fueled by strong on-chain growth and development. The cryptocurrency's expanding ecosystem and strategic partnerships contributed to its positive performance. Solana's strong on-chain growth directly correlated with its price performance, highlighting the importance of network fundamentals in driving market sentiment and price action.

Ethereum, however, posted a modest 1.28% decline in January despite network growth. U.S. spot Ether ETF inflows plummeted 95%, dropping from over $2 billion in December to just $101.15 million in January, signaling waning investor interest. Ethereum's underperformance relative to Bitcoin was reflected in the Bitcoin-to-Ethereum market capitalization ratio, which rose 11% month-over-month, suggesting that investors favored Bitcoin over Ethereum.



Key events like the FOMC meeting, the SEC's new crypto working group, and the EU's MiCA regulations influenced market dynamics, highlighting the growing role of regulatory frameworks in shaping crypto's future. The SEC's new crypto working group, established under the new U.S. administration, aimed to provide clarity on crypto policies and forge a less obstructed pathway for crypto in the U.S. This announcement contributed to the boost in crypto sentiment, driving Bitcoin to an all-time high in January 2025.

Institutional investors, such as MicroStrategy, continued to show confidence in crypto's long-term potential by aggressively acquiring Bitcoin. U.S. spot Bitcoin ETFs saw a 6.7% increase in inflows to $4.8 billion in January 2025, signaling sustained interest in the asset class. This institutional support, coupled with the positive regulatory developments, contributed to the overall bullish sentiment in the crypto market during the month.

In conclusion, Bitcoin and Solana's strong performance in January 2025, coupled with Ethereum's underperformance, highlights the diverse factors influencing cryptocurrency markets. Regulatory shifts, on-chain metrics, and network activity all play crucial roles in shaping the performance of these digital assets. As the crypto market continues to evolve, investors should stay informed about these key factors to make well-informed decisions.