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A significant portion of fee revenue in the blockchain industry is flowing to decentralized finance (DeFi) applications and wallets rather than the network layer itself, Cointelegraph reported. This trend suggests that the focus of investors and developers may also be shifting toward the application layer. According to an analysis by Jamie Coutts, a crypto market analyst at Real Vision, DeFi apps are now generating five times the fee revenue of the blockchains they operate on. Cointelegraph explained that if this trend continues, a greater share of fees will be allocated to DeFi apps such as wallets, decentralized exchanges (DEXs), and other protocols, leaving less revenue for the underlying blockchain networks.

Purchases of ETH by U.S. spot Ethereum ETFs this week have outpaced the cryptocurrency's new supply, Cointelegraph reported, citing data from Farside Investors. The funds recorded approximately $474.6 million in net inflows for the week, driven by rising demand as institutional investors increase their ETH exposure. On-chain data further supports this trend, with the number of active Ethereum addresses over the past 30 days increasing by 53% month-over-month. Daily transactions also hit a new all-time high of 2.9 million on Jan. 16. From a technical perspective, Cointelegraph noted that ETH is forming a symmetrical triangle pattern on its daily chart. A breakout above the upper resistance line could see the asset recover to $4,500, with the potential for a further rally to $5,500.

Steven McClurg, CEO of crypto asset management firm Cannery Capital, has stated that Ripple (XRP) is poised to lead the trend in real-world asset (RWA) tokenization. Speaking on a podcast, McClurg noted that while XRP was not a primary personal interest of his in the past, he has observed significant development in the XRP Ledger (XRPL) over the last two years, CryptoBasic reported. He assessed that during this time, XRPL has proven its utility in traditional finance, positioning XRP to become a leading token for the RWA trend. McClurg also predicted that if Bitcoin's rally fails this year, its price could fall to between $60,000 and $70,000. He added that XRP has greater upside potential and could reach as high as $5, even if it rallies independently of Bitcoin.

Investor sentiment in the Bitcoin options market is unstable, with traders remaining cautious about downside risk, according to on-chain analytics firm Glassnode. The firm explained that implied volatility (IV) across all maturities is gradually contracting, indicating a slowdown in demand for hedges against sharp price movements. While short-term volatility still reacts to spot prices, it is being suppressed by sell-offs during rallies. Glassnode noted that skew, the difference in IV between call and put options, is sending mixed signals. The 25-delta skew still favors put options, which are bets on a price decline, but short-term skew is neutral, and long-term skew is tilted toward the upside. This suggests a growing demand for bullish bets over simple downside hedging. The firm also observed trend-following behavior, with a concentration of call option purchases when BTC surpassed $95,000. However, Glassnode concluded that overall sentiment remains fragile, as traders are reluctant to sell put options, showing that caution about downside risk persists despite recent price increases.

New York State is advancing legislation to impose criminal penalties on cryptocurrency companies that operate without a license. Manhattan District Attorney Alvin Bragg and New York State Senator Zellnor Myrie have introduced the new bill, dubbed the CRYPTO Act, according to Decrypt. The legislation would shift the state's enforcement from its current focus on civil penalties to criminal charges for unlicensed operations. The bill also includes provisions for escalating punishments based on the severity of the violation, particularly for firms that handle more than $1 million in crypto assets annually.

Binance has announced it will list SPORTFUN/USDT and AIA/USDT perpetual futures. The SPORTFUN contract will launch at 1:45 p.m. UTC today, followed by the AIA contract at 2:00 p.m. UTC. Both contracts will support up to 20x leverage.

The cryptocurrency market this year will be characterized more by structural shifts than by price volatility, according to a new report from Kraken. The exchange noted that the market is undergoing fundamental changes in its distribution structure, driven by macroeconomic uncertainty, a rigid market framework, and a shift in cycles led by institutional capital. While Bitcoin remains a key indicator of market risk, the pathways for demand, liquidity, and risk transmission have evolved. Specifically, U.S. spot Bitcoin ETFs and companies holding digital asset treasuries (DATs) have become major variables in price formation. These entities generated $44 billion in net demand last year, but the market price did not react as strongly as anticipated because long-term holders supplied the market with their holdings, dampening the immediate upward price reaction seen in previous cycles, The Block reported. Despite these structural changes, Kraken stated that the macroeconomic environment remains a key factor. Moderate U.S. economic growth, persistent inflation, and a slow pace of monetary easing are limiting the upside potential for risk assets. For cryptocurrencies to rebound, a recovery in institution-led momentum is essential. The report highlighted that net inflows into ETFs slowed last year compared to the prior year, and DAT companies have found it more difficult to issue new shares due to shrinking premiums. A clear risk-on momentum is needed for the market to move higher.

The Audi F1 team has named crypto lending firm Nexo as its official crypto partner, Wu Blockchain reported. The two companies plan to launch global digital campaigns and premium fan experience programs.

Liquidity for spot Bitcoin ETFs has not yet recovered, according to an analysis by Mignolet, a crypto analyst and CoinNess Content Creator (CC). The analyst noted that Fidelity's FBTC and Ark Invest's ARKB, two ETFs that most directly influence Bitcoin's price, have seen stagnant inflows. FBTC has not surpassed its high from March 2024, while ARKB has been in a downtrend since July 2024. Mignolet pointed out that this trend is similar to the stock price pattern of Strategy, which failed to rebound for a year after hitting a new high in November 2024, signaling a significant weakening of liquidity. The analyst stated that the level of liquidity many expect has not yet returned. While BlackRock's IBIT trades are mostly conducted over-the-counter (OTC) and do not directly drive up the price, Mignolet argued that the price would likely have fallen more sharply without IBIT's buying pace. However, the analyst warned that IBIT's liquidity has also weakened. Although short-term inflows could resume, the overall trend remains negative. If there is insufficient demand to absorb OTC sales, this supply could flood the spot market.

The Eastern European nation of Moldova plans to enact a comprehensive cryptocurrency law this year in compliance with the European Union's Markets in Crypto-Assets (MiCA) regulation, CoinDesk reported. Moldovan Finance Minister Andrian Gavrilita said the government is working with regulators to create a legal framework that allows citizens to hold and trade crypto assets. However, he clarified that the legislation will not go as far as recognizing cryptocurrencies as a means of payment. Gavrilita added that while it is uncertain if the law will be introduced next month, it represents a commitment to the EU and that banning crypto is not an option.

Christopher Wood, Global Head of Equity Strategy at U.S. investment bank Jefferies, has removed a 10% Bitcoin allocation from the firm's model portfolio, Bloomberg reported. The decision was reportedly driven by concerns that advances in quantum computing could threaten Bitcoin's long-term security and weaken its function as a store of value for institutional investors.

Bitcoin could collapse within seven to 11 years due to a declining security budget, according to Justin Bons, co-founder of European crypto investment fund Cyber Capital. He argued that Bitcoin's security model relies on miner rewards from block subsidies and transaction fees. However, the four-year halving cycle structurally reduces revenue from these subsidies. To maintain current security, Bons stated that Bitcoin's price would need to double every four years or sustain extremely high fees, both of which he considers unrealistic in a competitive market. As miner revenue falls, he warned the network will become vulnerable to major attacks, potentially starting within the next two to three halving cycles. Bons noted that while an attack might cost millions of dollars, the potential profit could be in the hundreds of millions or billions, creating a significant incentive for attackers.

Digital Wealth Partners (DWP), a registered investment advisory firm specializing in digital assets, has entrusted digital asset fund Two Prime with the management of $250 million in BTC, CoinDesk reported. The outlet noted that the partnership is a sign of the maturing cryptocurrency investment landscape.

Sela Network has announced plans to address the risks of dependency on social media platforms through its decentralized, node-based web access infrastructure. The announcement follows a recent policy change at X, where Head of Product Nikita Bier stated that apps offering financial rewards for posting on the platform are no longer permitted under its API terms. X immediately blocked access for such services, directly impacting the operations of businesses that relied on its API. Sela Network is positioning its infrastructure as an alternative that does not depend on any single social API, explaining that it provides an environment where development teams do not have to risk their entire business on one platform.

Decentralized artificial intelligence (AI) agent project Infinity Ground (AIN) has launched its AIN staking service. Users can stake their tokens for five different periods, ranging from one to 24 months, to earn annual yields of 10% to a maximum of 40% depending on the duration. The project stated that stakers will also be eligible for future airdrops from projects incubated by Infinity Ground and can participate in joint incentive programs with ecosystem partners. Rewards are weighted based on the staking period and amount. The service is built on the BNB Chain, ensuring compatibility with major wallets and ecosystem infrastructure.

South Korean law firm Bae, Kim & Lee LLC has outlined the key implications of Google Play's policy to block overseas virtual asset exchange and wallet applications. The firm noted that the policy applies to all overseas crypto businesses not registered with South Korea's Financial Intelligence Unit (FIU), expanding beyond the government's existing blacklist. However, the restrictions do not affect iOS devices, meaning iPhone users can still download and update these apps. The law firm also clarified that virtual asset transfers from domestic exchanges are only restricted for entities on the FIU's blacklist, while transfers to major overseas exchanges and wallets not on the list are expected to remain unaffected.

Belgian bank KBC plans to offer trading services for BTC and ETH starting Feb. 16, Cointelegraph reported. The bank has submitted its registration as a Crypto Asset Service Provider (CASP) to the relevant authorities in compliance with the European Union's Markets in Crypto-Assets (MiCA) regulation.

Belarusian President Alexander Lukashenko has signed a bill allowing for the establishment of cryptocurrency banks, local media outlet BelTA reported. According to the legislation, these crypto banks must comply with the legal requirements applicable to non-bank credit and financial institutions.

South Korea’s Financial Services Commission (FSC) is developing regulations that would hold cryptocurrency exchanges strictly liable for damages from hacking incidents, MTN News reported. The regulator is also considering imposing punitive fines of up to 10% of an exchange's revenue. The proposal has drawn criticism from the industry. An official from the virtual asset sector noted that the 10% fine is more than three times the maximum 3% penalty applied to electronic financial businesses under the amended Electronic Financial Transactions Act, calling the proposed standard excessive for virtual asset service providers.

The South Korean crypto exchange Upbit has announced it will temporarily suspend deposits and withdrawals for Hippo Protocol (HP) starting at 9:00 a.m. UTC on Jan. 28 due to a network upgrade.

Coinbase's decision to withdraw its support for the crypto market structure bill known as the CLARITY Act is a move to stifle competition from security token platform Securitize, according to market research firm Citron Research. Citron stated that Coinbase CEO Brian Armstrong recently expressed concerns about Securitize in a CNBC interview. The research firm highlighted Armstrong's dissatisfaction with regulations on tokenized stocks while simultaneously seeking to protect Coinbase's stablecoin revenue model. Citron argued this reveals a contradictory stance, where Coinbase wants the regulatory clarity the bill could provide but aims to avoid the potential competition it would create. The firm concluded that Coinbase's opposition is not driven by concerns that the bill would harm the crypto industry, but rather by an effort to prevent legislation that could be more favorable to Securitize.

Opposition is growing in South Korea from the ruling Democratic Party, industry, and academia against a proposal to cap major shareholder stakes in cryptocurrency exchanges at 15-20%, ZDNet Korea reported. Within the ruling party, there is a strong consensus that strengthening regulations on unfair trading practices should be prioritized over direct ownership limits. Proponents of this view argue that strictly regulating insider trading, market manipulation, and conflicts of interest would be more effective. Concerns have also been raised that excessive ownership restrictions could stifle industry innovation and deter investment. With calls for caution also emerging from within the Democratic Party's task force on the issue, it is expected that the industry's perspective will be significantly reflected in the party's final draft of the Digital Asset Basic Act.

Bitcoin is approaching a critical inflection point, according to Glassnode analyst Chris Beamish. In a post on X, he noted that the recent BTC rebound is increasing the likelihood that short-term holders (STHs) will return to profitability. Beamish explained that this is typically a prerequisite for a resumption of upward momentum. However, he cautioned that if the recovery fails, the rally could prove to be merely a temporary technical rebound.

Japan's largest credit card company, JCB, has begun testing payments using U.S. dollar and Japanese yen-pegged stablecoins at physical stores, the Nihon Keizai Shimbun reported. For the initiative, JCB is collaborating with banking group Resona Holdings and IT services firm Digital Garage.

Hana Financial Group has formed a consortium of financial institutions to issue a stablecoin, News1 reported. The consortium includes BNK Financial Group, iM Financial Group, Standard Chartered Bank Korea, and OK Savings Bank. The group plans to establish a special purpose company (SPC) through a joint investment to handle the future issuance. This initiative aligns with a plan currently under review by South Korean financial authorities to grant initial issuance rights to consortiums where a bank holds a majority stake of over 50%, a measure intended to ensure market stability.