Research View - Did the January effect happen in 2020?

January 2020 began with Proof of Keys on January 3rd, an event supported by Binance.

In traditional markets, there is a calendar effect named “January Effect”: security prices are supposed to increase in January at a faster pace than in any other month. Believably, in equity markets, the impact of this calendar effect is said to be strengthened on small to mid-cap stocks.

In January, the market displayed positive gains across most cryptoassets, with the total market cap rising from $193 billion to $255 billion, with Bitcoin’s dominance remaining in the 65-66% territory. Specifically, the altcoin marketcap moved from $61 billion to $86 billion, an increase by ~+40%.

Looking at the details of price movements for specific names, DASH and ZCoin (XZC), two mid-cap cryptoassets, stood out as an illustration of this calendar effect as they exhibited respective monthly price increases of +181.5% and +179.7%.

In Binance derivatives markets, not less than 8 new trading contracts were added to the exchange. Once again, it should unlock new trading opportunities for traders and offer additional tools for risk management from the perspective of miners. The aggregated cumulative open interest is now around $271 million (as of January 31st).

Regarding project fundamentals, Ethereum activated its Muir Glacier upgrade, through a hardfork at block 9,200,000 (January 2nd). Block times for Ethereum came down from over 17 seconds on January 1st to around 13 seconds for the end of the month, according to Etherscan. This hardfork delays once again the “difficulty bomb” by 4 million blocks to provide additional time for ETH’s full transition to PoS.

Other altcoin developments include:

  • Ethereum Classic (ETC) had its own fork (“Agharta”), which improved the interoperability with the Ethereum.

  • For ZCoin-holders, the window for users to convert zerocoins to Sigma ended on January 20th.

  • The Aave Protocol (LEND) was launched on January 9th with new features such as Flash Loans, aTokens, and perpetual loans. Furthermore, this new protocol relies on ChainLink (LINK) for price oracle data.

  • Bancor (BNT) successfully completed its multi-chain airdrop of ETHBNT, which was supported by Binance and distributed to all users. For more on ETHBNT and other Bancor Relay tokens, please read more here.

  • Kyber Network (KNC) announced plans for a new token economics system: Katalyst.

Crypto spot markets

Table 1 - Overview of the largest assets by market cap (EOM - January 2020)



Monthly price change (%)

Average daily Binance volume (USDT)

Monthly daily avg. volume change (%)

Marketcap (EOM - USD)



381.6 M


170 B



75.4 M


20 B



36.8 M


10 B

Bitcoin Cash


77.4 M


6.9 B



35.4 M


4.3 B



26.0 M


2.8 B



39.0 M


3.9 B



7.5 M


1.2 B



12.9 M


1.4 B



8.6 M


1.3 B

Table 2 - Monthly top 3 gainers on in January 2020


Monthly change (%)




Table 3 - Monthly top 3 losers on in January 2020


Monthly change (%)




Chart 1 - Bitcoin monthly trading dominance on

Bitcoin Monthly Trading Dominance

Sources:, Binance Research.

As a reminder, we defined Bitcoin trading dominance, such as:

“Bitcoin trading dominance represents the respective volume contribution from Bitcoin trading, with BTC as a base currency, relative to the total spot volume on a platform (e.g., Binance) over a period of time.”

Sources:, Binance Research.

Bitcoin trading dominance broke below the 40% mark in January (38.17%), a symbolic decrease (-2.31%) from December. Meanwhile, the Bitcoin market dominance decreased from ~ 68% to ~ 65%.

Table 4 - New CEX listings in January 2020



Pair asset(s)

Listing date

Origin Protocol




Token Club


Three new assets were listed on the platform in January 2020. Worth noting, DREP was added following its community coin win.

On-chain markets on Binance DEX


In January, Binance DEX displayed minor activity with only 1 new pair being listed, with a new asset listed (NOIZB). As of January 31st 2019, Binance DEX offered 122 pairs for trading.

Table 5 - New DEX stablecoin pairs in January 2020



Pair asset(s)

Listing date



Chart 2 - Daily volume on the Binance DEX since August 2019 (USD million)

daily volume DEX

Sources: Binance DEX, Binance Research.

As illustrated in chart 2, the daily volume in January on the Binance DEX remains quite low, with a median of $0.8 million (MoM change of -$0.1 million).

Derivatives markets

Binance Futures began the new decade by expanding its product offerings. In January, Binance Futures introduced 8 new pairs, increasing its total crypto futures offerings to 11 products.


These new asset offerings are expected to provide additional trading opportunities for all crypto-derivatives traders and opportunities for miners to hedge.

Table 6 - New product offerings on Binance Futures in January



Maximum leverage

January 6th


January 8th


January 9th


January 15th


January 16th


January 17th


January 20th


January 31st


Sources: Binance Futures, Binance Research.

In January, volume on Binance Futures displayed a +85% month-on-month increase, with $56 billion traded across its perpetual contract markets. On January 14th, the platform recorded one its highest single-day volume, with over $3.5 billion worth of perpetual contracts traded as crypto markets rallied. During the month, Binance Futures displayed a daily average of $1.7 billion worth of contracts traded.

Chart 3 - Daily volume traded on BTC/USDT's perpetual contract (in USD billion)

daily volume perpetual

Sources: Binance Futures, Binance Research.

Chart 4 - Daily volume traded on ETH/USDT and BCH/USDT perpetual markets (in USD million)

daily volume altcoin perpetual

Sources: Binance Futures, Binance Research.

Binance Futures saw its open interest reached the $200 million mark and has maintained it ever since. Since the start of the year, its open interest grew 98% from $137 to $271 million as of 31st January. BTCUSDT’s perpetual markets remained the most invested contract, dominating 75% of its total open interest. Collectively, open interest across altcoin perpetual markets has grown from under USDT 20 million on January 1st to USDT 75 million: an expansion by more than 250% in a single month.

Chart 5 - Open interest on Bitcoin perpetual contract in January (in USDT million)

open interest BTC perpetual contract

Sources: Binance Futures, Binance Research.

Chart 6 - Total open interest in perpetual markets in January (in USDT million)

total open interest in perpetual markets

Sources: Binance Futures, Binance Research.

With the expansion of new trading pairs, we decided to create a new indicator called Bitcoin’s Open Interest dominance.

“Bitcoin Open Interest dominance is defined as the respective contribution from Bitcoin’s open interest relative to the total open interest on a derivatives platform (e.g., Binance Futures) over a defined period of time (e.g., daily)."

Sources: Binance Futures, Binance Research.

Chart 7 - Bitcoin’s open interest dominance in January (daily)

open interest dominance

Sources: Binance Research.

Without surprise, Bitcoin’s open interest dominance went down as 8 new futures contracts were added. As of January 31st, Bitcoin’s open interest dominance stood out at 73% (vs. 88% as of January 1st).

Finally, volume on perpetual contract markets continues to dominate spot markets, in a similar fashion to previous months (see chart below).

For most of January, perpetual contracts contributed 70% of total daily volume on the exchange (i.e., spot + derivatives). Although in the last two weeks, the spot market’s contribution to the total exchange volume picked up as investors preferred to buy underlying assets.

Chart 8 - Volume breakdown between futures vs. spot markets in January 2020

volume breakdown futures vs. spot

Sources: Binance Futures, Binance Research.

Borrowing and lending markets

Borrowing and lending markets remained extremely active in January. No additional asset was supported, but one new pair was added on January 17th for margin trading: BUSD/USDT.

Two fixed lending products were offered in January, ERD, and USDT, with both 30-day terms filled in full capacity. More uniquely, the ERD tokens will be deployed for the Elrond Pre-Staking program, where they will earn the yield directly on-chain via smart contract.

In addition, two additional fixed lending products will be offered in early February.

Table 7 - New fixed lending products

Digital Asset

Term to Maturity

Total Subscription Cap

Individual Cap

Annualized Interest Rate

Lot Size

Interest Per Lot at Maturity

30 days

10,000,000 BUSD

2,000,000 BUSD


100 BUSD

0.49315 BUSD


30 days

10,000,000 USDT

2,000,000 USDT


100 USDT

0.45205 USDT

These two products supplement the existing offer for flexible deposits for BTC, BUSD, USDT, and BNB.

As of January 31st 2019, 29 assets supported were supported for margin trading on Binance. For a list of all supported assets and trading pairs for margin trading, please refer to the website.

Staking markets

Staking markets are important from the perspective of all crypto-participants, as illustrated in our recent report, and bring additional returns for long-term holders.

Binance Staking offers passive rewards for many cryptoassets supported by Binance.


Staking yields vary greatly amongst stake-able assets, with expected yields ranging from 1% (NEO) to as high as 20% (ALGO). Rates also vary from month to month, so please check the full list of individual product pages.

Binance Staking provides zero-fee staking rewards, allowing users to get access to high yields, with the added capacity of being able to trade cryptoassets.

To learn more about Binance’s staking offerings, please visit the Binance Staking page.

Chart 9 - Expected yields (%) for assets supported for staking on

expected yields

Sources: Binance Staking, Binance Research.

As of February 2nd 2019, staking services are currently supported for 15 cryptoassets, with two new assets being added in the month of January: LOOM and THETA.

Estimated yields for LOOM stand at roughly 10%, which is higher than the yield of two-week on-chain stakes (5%). This is achieved as Binance split its locking of stakes across different reward rates, with stakes as long as 1 year (for 20% yield), suggesting long-term belief and support of the project. Users who still prefer to hold their own custody of their LOOM in their Trust Wallets or other non-custodial wallets may still earn rewards directly through the LOOM Staking portal but would receive less than holders on Binance.

With thanks to the THETA Network team, THETA holders will also get their pro-rata share of an additional 1 million THETA airdrop program shared by stakers during the first two months of THETA staking on Binance. Thus, users will earn additional THETA tokens in addition to their TFUEL staking rewards.

As announced with Binance’s support of Harmony (ONE) mainnet, January’s ONE staking rewards will be paid out with next month’s payout, providing another mainnet-supported staking Launchpad project for Binance.

Views from Binance Trading

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New Year, New Hope

While December disappointed many with the failed arrival of a Santa rally, the “January Effect” made up for this disappointment as BTC shot up from $7,200 at the beginning of the month to almost $9,500 at the end of the month. BTC dominance lowered from as high as 69% to 66%, showing that the altcoin market also had a nice rally. This has all increased the anticipation of a potential alt-season, or at least a mini alt-season, giving many traders hope for the first time in months.

The beginning of the month saw a high number of buy flows for mid to low cap alts, definitely at a higher rate than what the desk sees typically. This ended up being a good forecast for the month to come as the altcoin markets continued to pick up. In the middle of the month, as BTC continued to pick up steam, there were more alt-sell flows into BTC. When the price of Bitcoin rises sharply, altcoins often suffer as traders wish to add more BTC into their portfolio, resulting in a sell-off across the market.

Two-way altcoin flows declined near the end of the month, as traders seemed to realize that many altcoins were performing as well as if not better than BTC, potentially halting more altcoins sell flows. There appeared to be a debate about whether this altcoin rally and decrease in BTC dominance could be a sign of a more significant trend, as traders seemed more reticent in trading alts. Despite this hesitancy, there were some ETH buy flows, mainly when ETH was below $170. It will be interesting to see if BTC stabilizes in February and if altcoins can continue to make ground against BTC.