Bitcoin

Ethereum

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<p><strong>Before diving into January 2026 in Review, check out a couple of recently released reports from Reflexivity Research:</strong></p><ul><li><a href="https://cdn.prod.website-files.com/64f99c50f4c866dee943e165/698503b34f1057fd3db481ee_LayerTwo%20Labs%20CUSF%20V1%20Reflexivity%20Report.pdf" rel="noopener noreferrer nofollow">LayerTwo CUSF V1</a></li><li><a href="https://cdn.prod.website-files.com/64f99c50f4c866dee943e165/691b208f671a120a21864125_RR%200G%204.pdf" rel="noopener noreferrer nofollow">0G and On-Chain AI</a></li><li><a href="https://cdn.prod.website-files.com/64f99c50f4c866dee943e165/69149235ec6ea46adf3667cc_Bitlayer%202.pdf" rel="noopener noreferrer nofollow">Bitlayer and YBTC</a></li><li><a href="https://cdn.prod.website-files.com/64f99c50f4c866dee943e165/68ee30e1a073418df407fcc3_Sonic-Report.pdf" rel="noopener noreferrer nofollow">Sonic’s US Expansion</a></li></ul><h2 id="strong-executive-summary-strong"><strong>Executive Summary</strong></h2><p>January 2026 combined institutional and regulatory momentum with nonstop product iteration across wallets, decentralized finance (DeFi), and stablecoin rails.</p><p>On market structure, exchange-traded fund (ETF) filing activity remained active, and the NYSE advanced plans tied to 24/7 U.S. equities trading and a tokenized securities platform, reinforcing the push toward always-on markets and tokenized access.</p><p>Stablecoins continued widening as connective tissue, spanning state-backed issuance, stablecoin payouts via major payments partnerships, brokerage funding rails, and new on-chain “cash” primitives.</p><p>At the same time, a busy month of incidents and responses kept security and operational resilience in focus, with several notable exploits, an Ethereum Virtual Machine (EVM) chain pause after a $7 million exploit, and follow-on disclosures that ranged from contract losses to customer-data issues and major theft activity.</p><p>The through-line was clear: Distribution is improving quickly, product surfaces are expanding, and the ecosystem continues strengthening its operational playbook as it scales.</p><h2 id="strong-market-sentiment-strong"><strong>Market Sentiment</strong></h2><img src="https://academy-public.coinmarketcap.com/optimized-uploads/9da1e5780f284e859fb06825acc79aad.png"><p>Sentiment softened into the month-end. The Fear &amp; Greed Index finished January at 26 (Fear), matching the monthly low (26). The month was not uniformly risk-off: The index averaged 40 and reached a high of 54, but the rebound faded, and the month closed in a defensive posture.</p><h2 id="strong-etf-flows-strong"><strong>ETF Flows</strong></h2><p>ETF flows reinforced the late-month shift toward caution. Spot Bitcoin (<a href="https://coinmarketcap.com/currencies/bitcoin/" rel="noopener noreferrer nofollow">BTC</a>) ETFs ended January with a large net outflow, and the sharpest drawdown days were clustered late in the month. Spot Ethereum (<a href="https://coinmarketcap.com/currencies/ethereum/" rel="noopener noreferrer nofollow">ETH</a>) ETFs were also net negative, with outflows concentrated in a few vehicles and partially offset by one standout inflow product.</p><h3 id="spot-bitcoin-etf-flows-january-net-1-605b">Spot Bitcoin ETF Flows (January net: -$1.605B)</h3><img src="https://academy-public.coinmarketcap.com/optimized-uploads/432939d47dff4f918aa64c1b6fc85e25.png"><p>Spot Bitcoin ETF flows in January were a classic strong start, weaker finish. The month opened with sizable creations — $471 million on Jan. 2 and $697 million on Jan. 5 — then saw another burst of demand mid-month, led by Jan. 13 (+$754 million) and Jan. 14 (+$841 million). After that, the tone flipped decisively as outflows became more frequent and larger, culminating in a major washout on Jan. 29 (-$818 million) and another heavy bleed on Jan. 30 (-$510 million).</p><p>Net-net, the complex finished the month at -$1.605 billion, with the bulk of the red ink driven by FBTC (-$842 million) and GBTC (-$450 million), alongside smaller drawdowns in ARKB (-$151 million) and IBIT (-$137 million). A handful of smaller funds stayed positive, including EZBC (+$22 million), BTCO (+$11 million), BTCW (+$8 million), BRRR (+$6 million), and HODL (+$3 million), but their gains were nowhere near enough to offset the late-month risk-off wave.</p><h3 id="spot-ethereum-etf-flows-january-net-343m">Spot Ethereum ETF Flows (January Net: -$343M)</h3><img src="https://academy-public.coinmarketcap.com/optimized-uploads/51681bc11ce4414ea37ea2a3533ece1d.png"><p>Spot Ethereum ETF flows in January were volatile, with early strength giving way to persistent late-month selling pressure. The month began with solid inflows, then quickly flipped into a multi-day drawdown from Jan. 7 through Jan. 9, including a sharp -$159.2 million on Jan. 8.</p><p>Flows stabilized and rebounded mid-month, highlighted by consecutive strong sessions plus a late-month pocket of demand on Jan. 26 (+$117 million). Still, heavier red prints dominated the back half, with notable outflows on Jan. 20 (-$230 million), Jan. 21 (-$287 million), and a weak finish on Jan. 30 (-$252.9 million), leaving the category down -$343 million for the month.</p><p>By fund, the drag was concentrated in ETHA (-$326 million), with additional net outflows from ETHE (-$95 million) and FETH (-$72 million), partially offset by ETH (+$139 million) and smaller positives in ETHW (+$12 million) and EZET (+$2 million).</p><h2 id="strong-macro-backdrop-strong"><strong>Macro Backdrop</strong></h2><p>Macro stayed in the background for most of January, but it set the tone for risk assets.</p><p>U.S. December inflation came in line on headline and slightly softer on core, with the Consumer Price Index (CPI) at 2.7% year-over-year (2.7% expected) and core CPI at 2.6% YoY (2.7% expected). The month’s key policy marker followed late in January, when the Federal Reserve held rates unchanged at 3.75%.</p><h2 id="strong-regulation-and-institutional-adoption-strong"><strong>Regulation and Institutional Adoption</strong></h2><p>Institutional and policy developments in January were broad-based, spanning ETF filings, market-structure moves toward 24/7 access, compliance regimes going live, and continued expansion of licensing and regulatory frameworks across key jurisdictions.</p><p>Market structure headlines extended beyond crypto. The New York Stock Exchange outlined work on a tokenized securities platform and plans aimed at enabling 24/7 trading of U.S. equities. In parallel, Nasdaq and CME Group highlighted deeper partnership work tied to crypto index products, reinforcing the steady push to package crypto exposure in familiar formats.</p><p>Across Asia, South Korea moved to reopen the corporate channel for crypto and advanced a tokenized securities framework in a key legislative hearing. Elsewhere, Vietnam opened crypto exchange licensing, Belarus authorized “cryptobanks,” and Dubai tightened stablecoin rules while banning privacy tokens. Another forward-looking policy signal came from Japan, where the timeline now points toward the approval of its first crypto ETFs in 2028.</p><p>Valour, a subsidiary of DeFi Technologies, added a clear regulated access milestone in late January, receiving approval from both the Financial Conduct Authority (FCA) and the London Stock Exchange and beginning to offer select yield-bearing crypto exchange-traded products (ETPs) to UK retail investors on the LSE starting Jan. 26.</p><p>The approved retail lineup consists of 1Valour Bitcoin Physical Staking and 1Valour Ethereum Physical Staking, extending earlier LSE availability that was limited to professional investors and allowing UK retail investors to access BTC and ETH exposure with a yield component through traditional brokerage accounts.</p><p>This UK rollout builds on Valour’s earlier yield-bearing product work from May 15, 2024, when Valour and the Core Foundation launched a yield-bearing Bitcoin ETP and described how yield is incorporated into the product: Bitcoin is allocated to the Core network’s validator set, and the yield is credited to the ETP’s net asset value (NAV) on a daily basis. That launch also highlighted Core as the underlying network (Bitcoin-powered, EVM-compatible, using Satoshi Plus consensus), framing the structure as a way to gain yield exposure without requiring investors to sell or actively trade their BTC holdings.</p><p>Institutional expansion also showed up through corporate initiatives and capital markets positioning, including UBS planning to offer crypto services to clients, Ledger’s plans for a $4 billion IPO, and CertiK’s IPO ambitions. On the retail-fintech side, Robinhood signaled plans to roll out tokenized trading and DeFi features, underscoring continued convergence between consumer brokerages and on-chain rails.</p><h2 id="strong-stablecoins-payments-and-on-chain-finance-rails-strong"><strong>Stablecoins, Payments, and On-Chain Finance Rails</strong></h2><p>Stablecoins kept widening across payments, trading access, and settlement infrastructure. January included a state-backed stablecoin rollout to the public, stablecoin payouts via a major payments partnership, and a report that Fidelity plans to launch a stablecoin soon. Funding rails also expanded with Interactive Brokers enabling 24/7 funding using USD Coin (<a href="https://coinmarketcap.com/currencies/usd-coin/" rel="noopener noreferrer nofollow">USDC</a>).</p><p>Crypto-native teams continued shipping stablecoin designs and commodity-linked variants, adding new surfaces for cash-like assets inside ecosystems. Notable launches included Jupiter’s JupUSD (<a href="https://coinmarketcap.com/currencies/jupusd/" rel="noopener noreferrer nofollow">JupUSD</a>), a T-bill-backed stablecoin (ctUSD), and multiple gold-linked or gold-adjacent products (Scudo and thGOLD).</p><p>On the commerce and creator side, Google announced the Universal Commerce Protocol, and Rumble and Tether announced a crypto wallet aimed at the creator economy.</p><h2 id="strong-security-incidents-and-operational-risk-strong"><strong>Security Incidents and Operational Risk</strong></h2><p>Security and reliability were a defining constraint throughout January, with a steady drumbeat of hacks, breaches, outages, and emergency interventions.</p><p>The largest exploit disclosure came from Truebit Protocol (claimed $26 million exploited). Saga paused its EVM chain after a disclosed $7 million exploit, while SwapNet’s router exploit resulted in $17 million in user losses. Additional protocol-level exploits included Makinafi ($4.1 million) and Aperture Finance ($4 million). A smaller exploit earlier in the month was disclosed in a post by DarrenCamas regarding Ipor ($369,000).</p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/84de193d3d3747b2afaba1e3eeeec207.png"><p>Operational risk showed up through network instability as well, including Starknet downtime and Sui going down for roughly an hour before being fixed. Post-incident responses ranged from recovery and redistribution efforts, such as Sonic Labs partially recovering and redistributing funds tied to the Beets exploit, to venue-level interventions like Paradex announcing a rollback after mass liquidations.</p><p>Net-net, January reinforced that even as distribution improves and institutional rails expand, execution risk at the application and venue layer remains a first-order market constraint.</p><h2 id="strong-defi-products-tokenomics-and-incentive-design-strong"><strong>DeFi Products, Tokenomics, and Incentive Design</strong></h2><p>Product velocity stayed high across wallets, lending, and infrastructure. The month featured new consumer and trading surfaces (Jupiter Mobile v3, Phantom prediction markets), new lending iterations (Ranger Earn, Superlend v2, Hyperlend’s HPL Genesis and later HPL token introduction), and infrastructure updates like Fibre Blockspace and the TIP-20 standard introduction.</p><p>Token holder value mechanisms moved closer to center stage and, importantly, became more contested. January included explicit buyback initiatives, including fee-driven buybacks and buyback activity updates; Optimism (<a href="https://coinmarketcap.com/currencies/optimism-ethereum/" rel="noopener noreferrer nofollow">OP</a>) token buybacks; and a live proposal to burn 300 million WOO.</p><p>At the same time, the month captured the tension behind these levers through debate around potentially stopping buybacks and backlash-driven sale-term changes. Governance also leaned into value routing, highlighted by an Aave proposal framing how Aave “wins” and pushing toward distribution of non-protocol revenue to token holders.</p><p>The net effect was a month where value capture was treated less like a theoretical debate and more like an operating decision that communities revisit in real time.</p><h2 id="strong-deep-dives-strong"><strong>Deep Dives</strong></h2><h3 id="prediction-markets-go-distribution-first">Prediction Markets Go Distribution-First</h3><p>Prediction markets showed up repeatedly in January, but the real story was distribution. Phantom brought prediction markets directly into the wallet, framing them as a new way to discover and trade real-world events and cultural moments inside the same app people already use to swap tokens.</p><p>The flow is designed to be as lightweight as possible: Browse curated markets across categories, take a binary Yes or No position, size the trade, and fund it with tokens already in-wallet, including CASH (<a href="https://coinmarketcap.com/currencies/cash/" rel="noopener noreferrer nofollow">CASH</a>). A live chat attached to every market adds a social layer, turning each event into a shared venue where users can read the room and react as odds and live updates change.</p><p>Phantom has been growing rapidly by leveraging its existing distribution elsewhere also. They are the top protocol by builder code revenue on Hyperliquid:</p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/5d888c7a264341b2923409e2bf13960d.png"><p>Phantom’s launch also landed during a month when prediction markets pushed further into mainstream channels elsewhere. Polymarket announced a partnership with Dow Jones and The Wall Street Journal, another effort pointed to real estate-focused prediction markets, and TroveMarkets drew attention after reversing an extension announcement that impacted bettors.</p><p>Together, these updates reinforced a category shifting from niche destinations toward broader distribution and media integration, while underscoring how much trust in these markets depends on clear rules and consistent platform decision-making.</p><h3 id="ethgas-realtime-accelerating-ethereum-ux-by-up-to-240x">ETHGas Realtime: Accelerating Ethereum UX By Up To 240x</h3><p>ETHGas Realtime is a block-building sidecar that accelerates Ethereum’s user experience up to 240x, enabling preconfirmations and synthetic block times as fast as 50 milliseconds without compromising security guarantees. The Realtime Builder streams preconfirmations, meaning preliminary state updates, continuously before the next block is finalized, alongside an economic guarantee supporting the broadcasted state.</p><p>Ethereum blocks are produced every 12 seconds, but ETHGas breaks each block into hundreds of intervals so the execution client continuously creates and broadcasts the current state every 50 to 100 milliseconds. Each realtime block includes transactions processed so far plus updated balances and contract states, which apps can query via the ETHGas realtime RPC or other RPC providers that integrate it.</p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/bbd340d0749e4fbd9dcf11f1768638a2.png"><p>Integration is designed to be low friction: Point your app to a Realtime-aware RPC endpoint, or run your own Realtime-aware node using ETHGas’s reth image. The architecture routes realtime state through a WebSocket Proxy to RPC providers, while the final layer-1 block is submitted at the end of the slot via the standard PBS path (builder to relay to validator).</p><h3 id="fuse-energy-native-token-added-to-coinbase-listing-roadmap">Fuse Energy Native Token Added to Coinbase Listing Roadmap</h3><p><strong>How the Energy Network Works</strong></p><p>The Energy Network has been built by Fuse Energy, and the native token of the Network is the Energy Dollar (<a href="https://coinmarketcap.com/currencies/energy-dollar/" rel="noopener noreferrer nofollow">ENERGY</a>).</p><p>The architecture is described as data-first and event-driven. Devices stream real usage data into the network. Fuse reads live wholesale prices, network charges, and system stress to identify when shifting load creates value.</p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/7c754cd32b0b4aee84efbcda2dbcb210.png"><p>Using dispatchable flexibility across connected devices, Fuse bids into energy and grid support markets. After an event settles and the economic value is verified, ENERGY is issued to users in proportion to their measured impact.</p><h2 id="strong-conclusion-strong"><strong>Conclusion</strong></h2><p>January closed with sentiment and ETF flows leaning defensive, but the broader signal set remained constructive. Institutional access continued to broaden through filings and market-structure initiatives, with clear momentum toward 24/7 trading and tokenized securities frameworks that move crypto closer to familiar capital markets plumbing.</p><p>At the same time, stablecoins kept proving out as the most practical rail for real adoption, expanding across payments, brokerage funding, and new issuance models that make on-chain “cash” feel increasingly native.</p><p>On the product side, the month reinforced how quickly consumer and DeFi surfaces are evolving, from wallet-native prediction markets to new lending stacks and infrastructure upgrades aimed at faster, more predictable execution. Security and operations stayed in focus, but the pattern was equally about response and hardening: Recoveries, redistributions, rollbacks, and chain-level interventions showed the ecosystem continuing to build its playbook in public.</p><p>Heading into February, the setup is straightforward: Distribution is compounding, regulated access points are multiplying, and the pace of shipping remains high.</p><p><em>(CMC Research Partner)</em></p>

Reflexivity Research: January 2026 in Review

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