Is Bitcoin benefiting from the January effect?

January 30, 2023

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Block 1: Important News

Amazon Accelerates Entry into Cryptosphere

Amazon It reportedly plans to launch a digital asset service specifically based on NFTs. This project will focus primarily on his NFT applications related to blockchain-based video games.

coin base have fined 3.3 million euros

The Dutch Central Bank (DNB) imposed this fine for operating in violation of local anti-money laundering and anti-terrorist financing laws between November 2020 and August 2022. DNB, Coinbase Europe Limited, late registration. Coinbase said he has until March 2 to appeal the fine, which is based on the time it took to obtain registration.

Porsche: off of the NFT collection

big setback for Porsche For the launch of the NFT collection. The luxury car brand launched his collection of 7,500 NFTs with mixed success, with just 25% of his NFTs sold in 48 hours.Price set at 0.911 ethereum See the brand’s 911 model (around $1350). Due to community dissatisfaction, Porsche suspended his NFT creation process (Mint) and reduced the amount of his NFTs in circulation. The reasons for the failure are too high prices and poor communication. The roadmap wasn’t clear and potential investors didn’t know why they should buy this NFT or what the specific use cases associated with it would be. Porsche seems he went a little too fast in Web3 Adventure.

39% Increase in Cryptocurrency Adoption by 2022

By 2022, the number of cryptocurrency holders will reach 425 million. Crypto.com reports that the cryptocurrency ecosystem continues to attract new users despite difficult market conditions and a fear-inducing macroeconomic environment. By January 2022, he will have 306 million cryptocurrency holders worldwide. In December, that number increased by 39%, he reached 425 million. The end of the year showed a particularly sharp increase.

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Number of cryptocurrency holders in the world

crypto dot com

Block 2: Crypto Analysis of the Week

teeth Bitcoinand more broadly, is the cryptocurrency market benefiting from the so-called “January effect”? Unique It’s a month.

The exact cause of the January effect is not known. But we have some ideas. The end of December marks the end of the financial year and is an important time for fund managers, investors, and banks for regulators. As such, a lot can happen at the end of December that could indirectly affect trading behavior in January.

Perhaps one of the most important factors is the tax loss harvest. For retail investors, it may be worthwhile to sell the loss-making securities before the end of the year and thereby realize a tax loss. So the theory suggests that yield stocks with little momentum, or stocks that have been hit literally like 2022, may do well in January as they recover from the December tax sale. doing.

As for Bitcoin, the rally early in the year was part of a broader trend in financial markets that has seen the most risky and ultra-speculative stocks clearly rally. Take memetic stocks (stocks of companies that are frequently talked about on social networks), stock prices sometimes rise dramatically as a result of crowds. Round Hill MEME ETFincluding stocks such as AMC, robin hood When game stop, among others. Just like Bitcoin, he rose 22% at the beginning of the year and lost more than 60% after the 2022 massacre.Kathy Wood can also be seen Ark Invest Innovation The fund is up 25% year-to-date.

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Bitcoin appears to be benefiting from a renewed appetite for hyper-risk in traditional finance, as evidenced by the surge in these speculative stocks since early January. The house gives the impression that 2023 hopes to look more like 2021 than 2022. Considering how tough 2022 is going to be for just about any kind of investment, it makes sense that this time he’ll have a more pronounced January effect. As it relates to Bitcoin and cryptocurrencies, it’s wise to wait a little longer before selling Bearskin outright.

Block 3: Tops & Flops

Cryptocurrencies from a capitalization perspective
(click to enlarge)